Is AutoNation (AN) a Great Value Stock Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 AutoNation (AN). AN is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 5.09. This compares to its industry's average Forward P/E of 5.52. Over the past 52 weeks, AN's Forward P/E has been as high as 29.04 and as low as 4.76, with a median of 6.58.
AN is also sporting a PEG ratio of 0.21. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. AN's PEG compares to its industry's average PEG of 0.32. Within the past year, AN's PEG has been as high as 1.23 and as low as 0.19, with a median of 0.27.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. AN has a P/S ratio of 0.27. This compares to its industry's average P/S of 0.33.
Finally, investors should note that AN has a P/CF ratio of 4.12. 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 5.65. Over the past 52 weeks, AN's P/CF has been as high as 8.86 and as low as 3.61, with a median of 5.98.
If you're looking for another solid Automotive - Retail and Whole Sales value stock, take a look at Titan Machinery (TITN). TITN is a # 2 (Buy) stock with a Value score of A.
Additionally, Titan Machinery has a P/B ratio of 1.16 while its industry's price-to-book ratio sits at 2.11. For TITN, this valuation metric has been as high as 2.09, as low as 1.12, with a median of 1.61 over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that AutoNation and Titan Machinery are likely undervalued currently. And when considering the strength of its earnings outlook, AN and TITN sticks out as one of the market's strongest value stocks.
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AutoNation, Inc. (AN) : Free Stock Analysis Report
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