Are Investors Undervaluing Avianca Holdings S.A. (AVH) Right Now?
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.
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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Avianca Holdings S.A. (AVH). AVH is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 6.27. This compares to its industry's average Forward P/E of 14.30. Over the last 12 months, AVH's Forward P/E has been as high as 56.73 and as low as -25.04, with a median of 5.73.
Finally, investors will want to recognize that AVH has a P/CF ratio of 7.59. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. AVH's P/CF compares to its industry's average P/CF of 13.95. Over the past year, AVH's P/CF has been as high as 7.89 and as low as 0.97, with a median of 1.42.
These are only a few of the key metrics included in Avianca Holdings S.A.'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, AVH looks like an impressive value stock at the moment.
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