Should Value Investors Buy Copa Holdings (CPA) Stock?

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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 company value investors might notice is Copa Holdings (CPA). CPA is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with P/E ratio of 5.75 right now. For comparison, its industry sports an average P/E of 16.42. Over the past 52 weeks, CPA's Forward P/E has been as high as 7.72 and as low as 5.32, with a median of 6.30.

CPA is also sporting a PEG ratio of 0.30. 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. CPA's PEG compares to its industry's average PEG of 0.84. Over the last 12 months, CPA's PEG has been as high as 0.39 and as low as 0.27, with a median of 0.35.

Another notable valuation metric for CPA is its P/B ratio of 1.83. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 3.46. Over the past year, CPA's P/B has been as high as 3.04 and as low as 1.55, with a median of 1.92.

Finally, investors should note that CPA has a P/CF ratio of 4.71. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. CPA's P/CF compares to its industry's average P/CF of 11.06. Over the past year, CPA's P/CF has been as high as 7.75 and as low as 4.57, with a median of 5.33.

Investors could also keep in mind SkyWest (SKYW), an Transportation - Airline stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.

Shares of SkyWest are currently trading at a forward earnings multiple of 10.13 and a PEG ratio of 0.89 compared to its industry's P/E and PEG ratios of 16.42 and 0.84, respectively.

Over the last 12 months, SKYW's P/E has been as high as 11,210.77, as low as -3,534.23, with a median of 11.34, and its PEG ratio has been as high as 1.84, as low as 0.79, with a median of 0.98.

SkyWest sports a P/B ratio of 1.37 as well; this compares to its industry's price-to-book ratio of 3.46. In the past 52 weeks, SKYW's P/B has been as high as 1.45, as low as 0.57, with a median of 0.89.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Copa Holdings and SkyWest are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CPA and SKYW feels like a great value stock at the moment.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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