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Are Investors Undervaluing Asbury Automotive Group (ABG) Right Now?

Zacks Equity Research

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is Asbury Automotive Group (ABG). ABG is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.

We also note that ABG holds a PEG ratio of 0.66. 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. ABG's industry currently sports an average PEG of 1.33. Within the past year, ABG's PEG has been as high as 1.09 and as low as 0.47, with a median of 0.60.

These are just a handful of the figures considered in Asbury Automotive Group's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that ABG is an impressive value stock right now.


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