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Is Aircastle (AYR) a Great Value Stock Right Now?

Zacks Equity Research

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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 Aircastle (AYR). AYR is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 8.54, while its industry has an average P/E of 11.88. AYR's Forward P/E has been as high as 9.15 and as low as 5.86, with a median of 8.33, all within the past year.

Investors will also notice that AYR has a PEG ratio of 0.80. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. AYR's PEG compares to its industry's average PEG of 0.96. Over the last 12 months, AYR's PEG has been as high as 0.91 and as low as 0.59, with a median of 0.76.

Another valuation metric that we should highlight is AYR's P/B ratio of 0.86. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. AYR's current P/B looks attractive when compared to its industry's average P/B of 1.24. AYR's P/B has been as high as 0.88 and as low as 0.63, with a median of 0.76, over the past year.

Finally, investors will want to recognize that AYR has a P/CF ratio of 3.06. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 7.56. Within the past 12 months, AYR's P/CF has been as high as 3.26 and as low as 2.23, with a median of 2.67.

These are just a handful of the figures considered in Aircastle's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that AYR is an impressive value stock right now.


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