Should Value Investors Buy LATAM Airlines Group (LTM) Stock?

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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One stock to keep an eye on is LATAM Airlines Group (LTM). LTM is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 8.88 right now. For comparison, its industry sports an average P/E of 10.70. Over the last 12 months, LTM's Forward P/E has been as high as 9.75 and as low as 6.73, with a median of 8.47.

LTM is also sporting a PEG ratio of 0.40. 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. LTM's PEG compares to its industry's average PEG of 0.50. Within the past year, LTM's PEG has been as high as 0.85 and as low as 0.37, with a median of 0.57.

These are only a few of the key metrics included in LATAM Airlines Group'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, LTM looks 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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