After an almost 25% rally in the market over the last six months, bargain stocks are hard to come by. Here is one for less than $6 a share that has a rock bottom valuation and solid growth prospects to consider: Air Transport Services (NASDAQ:ATSG)
Air Transport Services Group, Inc., through its subsidiaries, provides aircraft for lease, airline operations, and other related services primarily to the shipping and transportation industries. It leases aircraft to airlines and other customers. The company also provides aircraft, crew, and maintenance services; airlift services; freight transportation and supply chain management services; passenger transportation primarily to the U.S. military; and air charter brokerage services. In addition, it offers aircraft maintenance and modification services; aircraft part sales services; equipment leasing and maintenance services; mail handling services for the U.S. Postal Service; and specialized services for aircraft fuel management and freight logistics (Business Description from Yahoo Finance)
6 reasons to own this stock at $6 a share:
- Insiders have bought over 1mm shares in the last six months.
- The stock is selling at a low five year projected PEG (.93) and is priced at just 20% over book value.
- Earnings are going in the right direction. ATSG earned 62 cents in FY2010, should make 66 cents in FY2011 and analysts project a solid 86 cents in EPS in FY2012.
- The stock looks like it has bottomed, has increasing technical strength and just crossed its 200 day moving average (See Chart)
- The median price target for the 5 analysts that cover this stock is $9 a share, some 50% over current price levels.
- The stock has easily beat earnings estimates the last quarters and is priced at under 7 times forward earnings.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in ATSG over the next 72 hours.