Should Value Investors Buy Deutsche Lufthansa (DLAKY) Stock?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
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.
Deutsche Lufthansa (DLAKY) is a stock many investors are watching right now. DLAKY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 4.72 right now. For comparison, its industry sports an average P/E of 9.67. Over the past year, DLAKY's Forward P/E has been as high as 20.05 and as low as 4.14, with a median of 5.33.
Investors will also notice that DLAKY has a PEG ratio of 0.21. 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. DLAKY's industry has an average PEG of 0.43 right now. Over the past 52 weeks, DLAKY's PEG has been as high as 0.24 and as low as 0.16, with a median of 0.19.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. DLAKY has a P/S ratio of 0.25. This compares to its industry's average P/S of 0.44.
Finally, investors should note that DLAKY has a P/CF ratio of 1.97. 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. This stock's P/CF looks attractive against its industry's average P/CF of 6.13. Within the past 12 months, DLAKY's P/CF has been as high as 4.03 and as low as 1.71, with a median of 2.56.
Investors could also keep in mind Controladora Vuela Compania de Aviacion, B. de C.V. (VLRS), an Transportation - Airline stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Shares of Controladora Vuela Compania de Aviacion, B. de C.V. currently holds a Forward P/E ratio of 29.76, and its PEG ratio is -2.17. In comparison, its industry sports average P/E and PEG ratios of 9.67 and 0.43.
Over the past year, VLRS's P/E has been as high as 6,243.17, as low as -73,021.84, with a median of 9.57; its PEG ratio has been as high as 644.96, as low as -7,543.58, with a median of 0.19 during the same time period.
Furthermore, Controladora Vuela Compania de Aviacion, B. de C.V. holds a P/B ratio of 4.96 and its industry's price-to-book ratio is 3.50. VLRS's P/B has been as high as 8.02, as low as 3.47, with a median of 5.56 over the past 12 months.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Deutsche Lufthansa and Controladora Vuela Compania de Aviacion, B. de C.V. are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, DLAKY and VLRS feels like a great value stock at the moment.
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Deutsche Lufthansa AG (DLAKY) : Free Stock Analysis Report
Controladora Vuela Compania de Aviacion, S.A.B. de C.V. (VLRS) : Free Stock Analysis Report
