Are Investors Undervaluing Asbury Automotive Group (ABG) 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.
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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality 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 #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 7.96 right now. For comparison, its industry sports an average P/E of 7.99. ABG's Forward P/E has been as high as 8.28 and as low as 4.21, with a median of 6.13, all within the past year.
Investors should also note that ABG holds a PEG ratio of 0.43. 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 industry currently sports an average PEG of 0.70. ABG's PEG has been as high as 0.45 and as low as 0.23, with a median of 0.33, all within the past year.
Another notable valuation metric for ABG is its P/B ratio of 1.72. 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. This stock's P/B looks solid versus its industry's average P/B of 2.40. Over the past year, ABG's P/B has been as high as 1.85 and as low as 1.18, with a median of 1.50.
Finally, investors will want to recognize that ABG has a P/CF ratio of 5.16. 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 stock's P/CF looks attractive against its industry's average P/CF of 6.89. 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.
If you're looking for another solid Automotive - Retail and Whole Sales value stock, take a look at Group 1 Automotive (GPI). GPI is a # 2 (Buy) stock with a Value score of A.
Shares of Group 1 Automotive currently holds a Forward P/E ratio of 6.74, and its PEG ratio is 2.19. In comparison, its industry sports average P/E and PEG ratios of 7.99 and 0.70.
Over the past year, GPI's P/E has been as high as 6.98, as low as 3.66, with a median of 5.02; its PEG ratio has been as high as 2.58, as low as 0.26, with a median of 0.33 during the same time period.
Additionally, Group 1 Automotive has a P/B ratio of 1.57 while its industry's price-to-book ratio sits at 2.40. For GPI, this valuation metric has been as high as 1.60, as low as 0.94, with a median of 1.34 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Asbury Automotive Group and Group 1 Automotive are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ABG and GPI feels like a great value stock at the moment.
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Asbury Automotive Group, Inc. (ABG) : Free Stock Analysis Report
Group 1 Automotive, Inc. (GPI) : Free Stock Analysis Report
