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

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

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 an A grade for Value. The stock holds a P/E ratio of 17.70, while its industry has an average P/E of 18.71. ATSG's Forward P/E has been as high as 18.22 and as low as 8.64, with a median of 14.77, all within the past year.

Finally, investors should note that ATSG has a P/CF ratio of 6.13. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. ATSG's current P/CF looks attractive when compared to its industry's average P/CF of 16.20. Over the past year, ATSG's P/CF has been as high as 6.30 and as low as 2.33, with a median of 3.65.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Air Transport Services is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ATSG feels like a great value stock at the moment.


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