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.
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 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 Allegiant (ALGT). ALGT is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A.
We also note that ALGT holds a PEG ratio of 0.27. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ALGT's industry has an average PEG of 0.51 right now. Within the past year, ALGT's PEG has been as high as 5.12 and as low as 0.10, with a median of 0.29.
We should also highlight that ALGT has a P/B ratio of 1.06. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. ALGT's current P/B looks attractive when compared to its industry's average P/B of 3.15. Over the past year, ALGT's P/B has been as high as 1.77 and as low as 0.59, with a median of 0.95.
Investors could also keep in mind United Airlines (UAL), another Transportation - Airline stock with a Zacks Rank of #2 (Buy) and Value grade of A.
Shares of United Airlines are currently trading at a forward earnings multiple of 8.98 and a PEG ratio of 1.19 compared to its industry's P/E and PEG ratios of 11.43 and 0.51, respectively.
Over the last 12 months, UAL's P/E has been as high as 9.45, as low as 4.45, with a median of 7.52, and its PEG ratio has been as high as 1.40, as low as 0.37, with a median of 1.00.
United Airlines sports a P/B ratio of 2.57 as well; this compares to its industry's price-to-book ratio of 3.15. In the past 52 weeks, UAL's P/B has been as high as 2.95, as low as 1.45, with a median of 2.19.
These are only a few of the key metrics included in Allegiant and United Airlines strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, ALGT and UAL look like an impressive value stock at the moment.
Radical New Technology Could Hand Investors Huge Gains
Quantum Computing is the next technological revolution, and it could be even more advanced than AI.
While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.
Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power .
Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.
See Top Quantum Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Allegiant Travel Company (ALGT): Free Stock Analysis Report
United Airlines Holdings Inc (UAL): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).