Are Airlines Stocks a Bargain?

In an article from Barron’s, “Airline Stocks Top the List of Barron’s 500 Bargains,” the publication looks at the cheapest stocks among the Barron’s 500 based on low price/earnings ratios. According to the article, “P/E ratios depend on analysts’ sometimes too-rosy forecasts, and don’t measure leverage, but can be a useful guide to spotting undervalued situations.”

This year, American Airlines and United Continental Holdings top the list of 20 companies with the lowest P/E ratios. Looking back, the stocks that topped last year’s list rose an average of 20.7 percent.

Article summary written by U.S. Global Investors.

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Price-Earnings Ratio (P/E Ratio) is determined by dividing the price of the stock by the company’s forecasted earnings per share.