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Is Air Transport Services (ATSG) Stock Undervalued Right Now?

Zacks Equity Research
·2 mins read

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One stock to keep an eye on is Air Transport Services (ATSG). ATSG is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 14.04, which compares to its industry's average of 14.05. Over the last 12 months, ATSG's Forward P/E has been as high as 17.89 and as low as 8.64, with a median of 14.88.

Finally, our model also underscores that ATSG has a P/CF ratio of 3.13. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. ATSG's current P/CF looks attractive when compared to its industry's average P/CF of 12.49. ATSG's P/CF has been as high as 4.99 and as low as 2.33, with a median of 4.12, all within the past year.

These are only a few of the key metrics included in Air Transport Services's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, ATSG looks like an impressive value stock at the moment.


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