Is Asbury Automotive Group (ABG) Stock Undervalued Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is Asbury Automotive Group (ABG). ABG is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
We also note that ABG holds a PEG ratio of 0.42. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ABG's industry currently sports an average PEG of 0.67. Over the past 52 weeks, ABG's PEG has been as high as 0.45 and as low as 0.23, with a median of 0.31.
Investors should also recognize that ABG has a P/B ratio of 1.70. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. ABG's current P/B looks attractive when compared to its industry's average P/B of 2.31. ABG's P/B has been as high as 1.86 and as low as 1.18, with a median of 1.50, over the past year.
Finally, investors should note that ABG has a P/CF ratio of 5.09. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 6.60. Within the past 12 months, ABG's P/CF has been as high as 5.51 and as low as 3.56, with a median of 4.47.
Investors could also keep in mind AutoNation (AN), an Automotive - Retail and Whole Sales stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Shares of AutoNation are currently trading at a forward earnings multiple of 7.81 and a PEG ratio of 0.28 compared to its industry's P/E and PEG ratios of 7.68 and 0.67, respectively.
Over the last 12 months, AN's P/E has been as high as 8.13, as low as 4.47, with a median of 5.79, and its PEG ratio has been as high as 1.99, as low as 0.21, with a median of 0.76.
AutoNation also has a P/B ratio of 3.70 compared to its industry's price-to-book ratio of 2.31. Over the past year, its P/B ratio has been as high as 3.81, as low as 2.10, with a median of 2.91.
Value investors will likely look at more than just these metrics, but the above data helps show that Asbury Automotive Group and AutoNation are likely undervalued currently. And when considering the strength of its earnings outlook, ABG and AN sticks out as one of the market's strongest value stocks.
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Asbury Automotive Group, Inc. (ABG) : Free Stock Analysis Report
AutoNation, Inc. (AN) : Free Stock Analysis Report
