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 proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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 value investors might notice is Atlas Air Worldwide Holdings (AAWW). AAWW is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 7.67, while its industry has an average P/E of 15.67. Over the past 52 weeks, AAWW's Forward P/E has been as high as 8.73 and as low as 5.64, with a median of 7.09.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. AAWW has a P/S ratio of 0.71. This compares to its industry's average P/S of 0.74.
Another great Transportation - Air Freight and Cargo stock you could consider is FedEx (FDX), which is a # 2 (Buy) stock with a Value Score of A.
Shares of FedEx currently holds a Forward P/E ratio of 11.49, and its PEG ratio is 0.96. In comparison, its industry sports average P/E and PEG ratios of 15.67 and 1.30.
FDX's Forward P/E has been as high as 17.19 and as low as 10.40, with a median of 13.81. During the same time period, its PEG ratio has been as high as 1.43, as low as 0.87, with a median of 1.15.
FedEx also has a P/B ratio of 2.70 compared to its industry's price-to-book ratio of 9.60. Over the past year, its P/B ratio has been as high as 3.81, as low as 2.38, with a median of 3.16.
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
FedEx Corporation (FDX): Free Stock Analysis Report
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