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Should Value Investors Buy Hawaiian Holdings (HA) Stock?

Zacks Equity Research

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.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

One stock to keep an eye on is Hawaiian Holdings (HA). HA is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 8.04, while its industry has an average P/E of 9.22. Over the last 12 months, HA's Forward P/E has been as high as 8.19 and as low as 4.77, with a median of 7.08.

Investors should also recognize that HA has a P/B ratio of 1.35. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 2.63. Over the past 12 months, HA's P/B has been as high as 1.75 and as low as 1.09, with a median of 1.32.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. HA has a P/S ratio of 0.51. This compares to its industry's average P/S of 0.69.

Finally, our model also underscores that HA has a P/CF ratio of 4.15. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. HA's current P/CF looks attractive when compared to its industry's average P/CF of 5.88. Over the past 52 weeks, HA's P/CF has been as high as 4.36 and as low as 2.71, with a median of 3.56.

These are only a few of the key metrics included in Hawaiian Holdings'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, HA looks like an impressive value stock at the moment.

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