Why Air Transport Services (ATSG) is a long-term growth stock
IRegardless of your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.
With daily Zacks Ranking and Zacks Industry Ranking updates, full access to the Zacks #1 Ranking List, Stock Research Reports, and Premium Stock Screens, the Research Service can help you become a smarter and more confident investor.
Zacks Premium also includes Zacks style scores.
What are Zacks style scores?
Zacks Style Scores are a unique set of guidelines that rate stocks based on three popular investment types and were developed as complementary indicators for the Zacks Ranking. This combination helps investors choose the stocks most likely to beat the market over the next 30 days.
Each stock is assigned a letter grade of A, B, C, D or F based on its value, growth and dynamic qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the higher the score, the better the chance the stock will outperform.
Style Scores are divided into four categories:
Value investors love finding good stocks at good prices, especially before the broader market realizes a stock’s true value. Using ratios such as P/E, PEG, Price/Sales, Price/Cash Flow and many other multiples, the Value Style Score identifies the most attractive and discounted stocks.
While good value is important, growth-oriented investors focus more on a company’s financial strength and health, as well as its future prospects. The Growth Style Score considers forecasted and historical earnings, sales and cash flow to uncover stocks that will experience sustainable long-term growth.
Momentum trading is all about taking advantage of up or down trends in a stock’s price or earnings outlook, and these investors live by the saying “the trend is your friend”. The Momentum Style Score can identify good times to create a position in a stock, using factors such as the one-week price change and the monthly percentage change in earnings estimates.
If you enjoy using all three types of investing, the VGM score is for you. It’s a combination of all Style Scores, and it’s an important indicator to use with Zacks Rank. The VGM score rates each stock based on its shared weighted styles, narrowing down the companies with the most attractive value, the best growth forecasts and the most promising momentum.
How Style Scores Work with Zacks Ranking
The Zacks Ranking is a proprietary stock rating model that harnesses the power of earnings estimate revisions or changes to a company’s earnings forecast to help investors build a successful portfolio.
Investors can count on the success of Zacks Rank, with #1 stocks (Strong Buy) producing an unmatched average annual return of +25.41% since 1988, more than double the performance of the S&P 500. But the model values a large number of stocks, and there are over 200 companies with a strong buy rank, plus another 600 with a #2 (buy) rank, every day.
With over 800 top-rated stocks to choose from, it can certainly feel overwhelming deciding which ones are right for you and your investment journey.
This is where Style Scores come in.
You want to make sure you’re buying stocks with the highest probability of success, and to do that you’ll need to choose stocks with a Zacks #1 or #2 rating that also have A or B style scores. you like a security that is only ranked #3 (Hold), it should also have scores of A or B to ensure as much upside potential as possible.
As mentioned above, the scores are designed to work with the Zacks ranking, so any changes in a company’s earnings outlook should be a deciding factor when deciding which stocks to buy.
For example, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that displays scores of A and B, still has a downside earnings forecast, and a much greater probability than the its share price falls. as well.
So the more stocks you have with a rank of #1 or #2 and scores of A or B, the better.
Stock to Watch: Air Transport Services (ATSG)
Air Transport Services Group is one of the world’s leading providers of aircraft leasing, air cargo transportation and related services. Additionally, this Wilmington, OH-based company is the largest cargo aircraft lessor in the world and operates through numerous subsidiaries.
ATSG is #2 (buy) on the Zacks rank, with a VGM score of A.
Additionally, the company could be a top pick for growth investors. ATSG has a growth style score of B, forecasting year-over-year earnings growth of 19.3% for the current fiscal year.
For fiscal 2022, three analysts have revised their earnings estimate higher in the past 60 days, and Zacks’ consensus estimate has risen $0.10 to $1.98 per share. The ATSG shows an average surprise profit of 12.7%.
With a strong Zacks ranking and top VGM growth and style scores, ATSG should be on the investor shortlist.
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Air Transport Services Group, Inc (ATSG): Free Inventory Analysis Report
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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.