Is Aircastle (AYR) a Great Value Stock 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.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 Aircastle (AYR). AYR is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 7.40. This compares to its industry's average Forward P/E of 12.11. Over the last 12 months, AYR's Forward P/E has been as high as 11.52 and as low as 7.40, with a median of 8.97.
We also note that AYR holds a PEG ratio of 0.74. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. AYR's PEG compares to its industry's average PEG of 1.19. Over the last 12 months, AYR's PEG has been as high as 1.70 and as low as 0.74, with a median of 0.90.
Investors should also recognize that AYR has a P/B ratio of 0.74. The P/B ratio pits a stock's market value against 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 1.34. Over the past year, AYR's P/B has been as high as 1.04 and as low as 0.74, with a median of 0.84.
Finally, we should also recognize that AYR has a P/CF ratio of 2.81. 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. AYR's current P/CF looks attractive when compared to its industry's average P/CF of 4.32. Within the past 12 months, AYR's P/CF has been as high as 4.10 and as low as 2.80, with a median of 3.26.
Value investors will likely look at more than just these metrics, but the above data helps show that Aircastle is likely undervalued currently. And when considering the strength of its earnings outlook, AYR sticks out at as one of the market's strongest value stocks.