SolarCity Corp (SCTY): Are There More Like It Out There?

An Undervalued Transportation Stock to Buy

While the transportation sector trades at all-time highs, Copa Holdings, S.A. (NYSE:CPA) is a great under-the-radar growing investment in the space. On Tuesday it rose 7.88% after reporting very strong earnings that beat on both the top and bottom line by a wide margin. The company saw both an 18% rise in total revenue and a boost in margins. The Panama-based company continues to expand its horizons and venture out on further flights, including a 6.3% rise in length during the last quarter.

Over the last year, Copa Holdings, S.A. (NYSE:CPA) has increased 68%, yet considering its growth, the company is fairly cheap. The stock trades with a price/sales of 2.60 and at 19 times earnings. Both metrics are slightly greater than the S&P 500. However, Copa Holdings, S.A. (NYSE:CPA) is fundamentally outperforming the growth of the market by a large margin, thus making the stock attractive when considering growth relative to its valuation. In my opinion, Copa Holdings, S.A. (NYSE:CPA) is not expensive, and even after its large gains, I still say to “buy”.

Conclusion

In my book, Taking Charge With Value Investing(McGraw-Hill, 2013), I discuss the art of buying after earnings. For the most part, success is measured by your ability to do two things. First, determine a company’s valuation relative to the broader market compared to growth. Second, read the report and listen to the call first and then look at the stock performance. You can then make a logical investment decision not impacted by emotion. Thus take these two pieces of advice, and I think you will find that your returns will increase when buying after earnings.

The article Are These Stocks a Buy After Earnings? originally appeared on Fool.com and is written by Brian Nichols.

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