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Are Investors Undervaluing Ashtead Group PLC (ASHTY) Right Now?

Zacks Equity Research

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.

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 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 value investors might notice is Ashtead Group PLC (ASHTY). ASHTY 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 10.54, while its industry has an average P/E of 15.19. Over the last 12 months, ASHTY's Forward P/E has been as high as 15.63 and as low as 8.28, with a median of 11.73.

Investors should also note that ASHTY holds a PEG ratio of 0.48. 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. ASHTY's PEG compares to its industry's average PEG of 0.99. ASHTY's PEG has been as high as 1.04 and as low as 0.43, with a median of 0.71, all within the past year.

We should also highlight that ASHTY has a P/B ratio of 3.67. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 6.45. Over the past year, ASHTY's P/B has been as high as 4.77 and as low as 2.71, with a median of 3.69.

Finally, we should also recognize that ASHTY has a P/CF ratio of 5.42. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. ASHTY's P/CF compares to its industry's average P/CF of 19.73. Within the past 12 months, ASHTY's P/CF has been as high as 10.88 and as low as 4, with a median of 6.26.

These are just a handful of the figures considered in Ashtead Group PLC'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 ASHTY is an impressive value stock right now.


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