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Should Value Investors Buy Air Lease (AL) Stock?

Zacks Equity Research

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is Air Lease (AL). AL is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 7.60. This compares to its industry's average Forward P/E of 14.03. Over the past 52 weeks, AL's Forward P/E has been as high as 9.41 and as low as 5.35, with a median of 6.54.

Investors will also notice that AL has a PEG ratio of 0.83. 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. AL's industry has an average PEG of 1.28 right now. Over the past 52 weeks, AL's PEG has been as high as 1.09 and as low as 0.61, with a median of 0.80.

Investors should also recognize that AL has a P/B ratio of 0.97. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. AL's current P/B looks attractive when compared to its industry's average P/B of 1.29. AL's P/B has been as high as 0.99 and as low as 0.64, with a median of 0.83, over the past year.

Finally, investors will want to recognize that AL has a P/CF ratio of 4.17. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. AL's P/CF compares to its industry's average P/CF of 7.60. AL's P/CF has been as high as 4.24 and as low as 2.90, with a median of 3.70, all within the past year.

These are just a handful of the figures considered in Air Lease'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 AL is an impressive value stock right now.


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