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Is Asbury Automotive Group (ABG) Stock Undervalued Right Now?

Zacks Equity Research
·2 min 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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 an A grade for Value. The stock holds a P/E ratio of 9.74, while its industry has an average P/E of 9.99. Over the last 12 months, ABG's Forward P/E has been as high as 12.94 and as low as 4.06, with a median of 9.15.

Finally, our model also underscores that ABG has a P/CF ratio of 10.05. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 11.41. Within the past 12 months, ABG's P/CF has been as high as 10.65 and as low as 3.53, with a median of 8.

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