Should Value Investors Buy Hawaiian Holdings (HA) 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, 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.
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 Hawaiian Holdings (HA). HA is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 6.76, which compares to its industry's average of 8.98. HA's Forward P/E has been as high as 8.36 and as low as 4.77, with a median of 7.13, all within the past year.
Investors should also recognize that HA has a P/B ratio of 1.28. 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. This company's current P/B looks solid when compared to its industry's average P/B of 2.86. Over the past 12 months, HA's P/B has been as high as 2.42 and as low as 1.23, with a median of 1.54.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. HA has a P/S ratio of 0.43. This compares to its industry's average P/S of 0.63.
Finally, we should also recognize that HA has a P/CF ratio of 3.26. 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 6.36. Over the past year, HA's P/CF has been as high as 5 and as low as 2.71, with a median of 3.69.
Value investors will likely look at more than just these metrics, but the above data helps show that Hawaiian Holdings is likely undervalued currently. And when considering the strength of its earnings outlook, HA sticks out at as one of the market's strongest value stocks.
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