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Should Value Investors Buy Aircastle (AYR) Stock?

Zacks Equity Research

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.

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 holds a P/E ratio of 8.71, while its industry has an average P/E of 11.44. AYR's Forward P/E has been as high as 10.10 and as low as 5.86, with a median of 8.56, all within the past year.

Investors will also notice that AYR has a PEG ratio of 0.80. 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. AYR's industry has an average PEG of 1.15 right now. AYR's PEG has been as high as 1.01 and as low as 0.59, with a median of 0.86, all within the past year.

Another notable valuation metric for AYR is its P/B ratio of 0.76. 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 solid versus its industry's average P/B of 1.50. AYR's P/B has been as high as 0.93 and as low as 0.63, with a median of 0.79, over the past year.

Finally, we should also recognize that AYR has a P/CF ratio of 2.64. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 5.67. Within the past 12 months, AYR's P/CF has been as high as 3.71 and as low as 2.23, with a median of 2.94.

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

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