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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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is Air France-KLM (AFLYY). AFLYY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
We also note that AFLYY holds a PEG ratio of 0.44. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. AFLYY's industry currently sports an average PEG of 0.66. Over the last 12 months, AFLYY's PEG has been as high as 1.71 and as low as 0.14, with a median of 0.38.
Another notable valuation metric for AFLYY is its P/B ratio of 2.44. 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 stock's P/B looks attractive against its industry's average P/B of 2.70. Within the past 52 weeks, AFLYY's P/B has been as high as 7.42 and as low as -1.24, with a median of 2.48.
These are only a few of the key metrics included in Air France-KLM's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, AFLYY looks like an impressive value stock at the moment.
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Air France-KLM SA (AFLYY) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).