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Are Investors Undervaluing Alaska Air Group (ALK) Right Now?

Zacks Equity Research

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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 Alaska Air Group (ALK). ALK is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Investors should also note that ALK holds a PEG ratio of 0.45. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ALK's PEG compares to its industry's average PEG of 0.59. Over the past 52 weeks, ALK's PEG has been as high as 6.21 and as low as 0.33, with a median of 0.69.

Another notable valuation metric for ALK is its P/B ratio of 2.01. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.37. Over the past 12 months, ALK's P/B has been as high as 2.43 and as low as 1.76, with a median of 2.01.

These are only a few of the key metrics included in Alaska Air Group'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, ALK looks like an impressive value stock at the moment.


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