Are Investors Undervaluing SkyWest (SKYW) Right Now?

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

One company to watch right now is SkyWest (SKYW). SKYW is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 10.04, which compares to its industry's average of 10.19. Over the past 52 weeks, SKYW's Forward P/E has been as high as 14.41 and as low as 8.62, with a median of 11.24.

Another valuation metric that we should highlight is SKYW's P/B ratio of 1.63. 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 attractive against its industry's average P/B of 3.44. Over the past 12 months, SKYW's P/B has been as high as 2.02 and as low as 1.30, with a median of 1.69.

Finally, investors will want to recognize that SKYW has a P/CF ratio of 5.44. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 7.13. Over the past 52 weeks, SKYW's P/CF has been as high as 7.64 and as low as 4.42, with a median of 5.89.

Value investors will likely look at more than just these metrics, but the above data helps show that SkyWest is likely undervalued currently. And when considering the strength of its earnings outlook, SKYW sticks out as one of the market's strongest value stocks.

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This article originally published on Zacks Investment Research (zacks.com).

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