Are Investors Undervaluing These Transportation Stocks 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, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.
Atlas Air Worldwide Holdings (AAWW) is a stock many investors are watching right now. AAWW is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 6.19, which compares to its industry's average of 15.35. Over the past 52 weeks, AAWW's Forward P/E has been as high as 51.04 and as low as 5.15, with a median of 6.96.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. AAWW has a P/S ratio of 0.61. This compares to its industry's average P/S of 0.67.
FedEx (FDX) may be another strong Transportation - Air Freight and Cargo stock to add to your shortlist. FDX is a # 2 (Buy) stock with a Value grade of A.
Shares of FedEx are currently trading at a forward earnings multiple of 10.85 and a PEG ratio of 0.90 compared to its industry's P/E and PEG ratios of 15.35 and 1.28, respectively.
FDX's Forward P/E has been as high as 17.19 and as low as 10.40, with a median of 12.73. During the same time period, its PEG ratio has been as high as 1.43, as low as 0.87, with a median of 1.06.
FedEx also has a P/B ratio of 2.59 compared to its industry's price-to-book ratio of 9.86. Over the past year, its P/B ratio has been as high as 3.81, as low as 2.38, with a median of 3.03.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Atlas Air Worldwide Holdings and FedEx are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AAWW and FDX feels like a great value stock at the moment.
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Atlas Air Worldwide Holdings (AAWW) : Free Stock Analysis Report
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