Should Value Investors Buy Air Lease (AL) Stock?
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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Air Lease (AL) is a stock many investors are watching right now. AL is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 6.98, which compares to its industry's average of 12.46. Over the past 52 weeks, AL's Forward P/E has been as high as 9.41 and as low as 1.77, with a median of 6.98.
AL is also sporting a PEG ratio of 0.49. 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 currently sports an average PEG of 0.76. Over the last 12 months, AL's PEG has been as high as 2.94 and as low as 0.19, with a median of 0.77.
Another notable valuation metric for AL is its P/B ratio of 0.62. 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. AL's current P/B looks attractive when compared to its industry's average P/B of 0.92. Over the past year, AL's P/B has been as high as 0.99 and as low as 0.22, with a median of 0.61.
Finally, our model also underscores that AL has a P/CF ratio of 2.53. 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 4.93. AL's P/CF has been as high as 4.24 and as low as 0.90, with a median of 2.48, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Air Lease is likely undervalued currently. And when considering the strength of its earnings outlook, AL sticks out at as one of the market's strongest value stocks.
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