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Are Investors Undervaluing Air Transport Services (ATSG) Right Now?

Zacks Equity Research

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality 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 13.21, while its industry has an average P/E of 14.13. Over the past 52 weeks, ATSG's Forward P/E has been as high as 17.89 and as low as 11.41, with a median of 15.33.

Finally, our model also underscores that ATSG has a P/CF ratio of 3.90. 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 12.49. Over the past year, ATSG's P/CF has been as high as 5.40 and as low as 3.52, with a median of 4.36.

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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Zacks Investment Research