Is Copa Holdings (CPA) Stock Undervalued Right Now?

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.

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 Copa Holdings (CPA). CPA is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 6.79. This compares to its industry's average Forward P/E of 11.05. Over the last 12 months, CPA's Forward P/E has been as high as 6.96 and as low as 5.19, with a median of 6.04.

We should also highlight that CPA has a P/B ratio of 1.93. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. CPA's current P/B looks attractive when compared to its industry's average P/B of 3.56. CPA's P/B has been as high as 1.95 and as low as 1.38, with a median of 1.70, over the past year.

Finally, investors should note that CPA has a P/CF ratio of 5.10. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 7.41. CPA's P/CF has been as high as 5.14 and as low as 3.65, with a median of 4.27, all within the past year.

If you're looking for another solid Transportation - Airline value stock, take a look at Japan Airlines (JAPSY). JAPSY is a Zacks Rank of #2 (Buy) stock with a Value score of A.

Japan Airlines also has a P/B ratio of 1.36 compared to its industry's price-to-book ratio of 3.56. Over the past year, its P/B ratio has been as high as 1.41, as low as 1.01, with a median of 1.17.

These are only a few of the key metrics included in Copa Holdings and Japan 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, CPA and JAPSY look like an impressive value stock at the moment.

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This article originally published on Zacks Investment Research (zacks.com).

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