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Is Asbury Automotive Group (ABG) a Great Value Stock Right Now?

Zacks Equity Research
·2 mins read

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is Asbury Automotive Group (ABG). ABG is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 8.98 right now. For comparison, its industry sports an average P/E of 11.26. Over the past year, ABG's Forward P/E has been as high as 12.94 and as low as 4.06, with a median of 9.95.

Investors will also notice that ABG has a PEG ratio of 0.67. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ABG's PEG compares to its industry's average PEG of 1.90. Over the past 52 weeks, ABG's PEG has been as high as 1.21 and as low as 0.22, with a median of 0.64.

Finally, we should also recognize that ABG has a P/CF ratio of 9.36. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. ABG's P/CF compares to its industry's average P/CF of 11.41. Over the past 52 weeks, ABG's P/CF has been as high as 9.87 and as low as 3.53, with a median of 7.93.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Asbury Automotive Group is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ABG feels like a great value stock at the moment.


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Zacks Investment Research