Are Investors Undervaluing Group 1 Automotive (GPI) Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
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.
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.
Group 1 Automotive (GPI) is a stock many investors are watching right now. GPI is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 6.67, while its industry has an average P/E of 7.53. GPI's Forward P/E has been as high as 7 and as low as 3.66, with a median of 5.66, all within the past year.
Another notable valuation metric for GPI is its P/B ratio of 1.52. 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 attractive against its industry's average P/B of 2.15. Over the past 12 months, GPI's P/B has been as high as 1.56 and as low as 0.94, with a median of 1.34.
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. GPI has a P/S ratio of 0.22. This compares to its industry's average P/S of 0.31.
Finally, our model also underscores that GPI has a P/CF ratio of 4.87. 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. GPI's P/CF compares to its industry's average P/CF of 7.08. Over the past 52 weeks, GPI's P/CF has been as high as 4.87 and as low as 2.90, with a median of 3.90.
Rush Enterprises (RUSHA) may be another strong Automotive - Retail and Whole Sales stock to add to your shortlist. RUSHA is a # 2 (Buy) stock with a Value grade of A.
Rush Enterprises is trading at a forward earnings multiple of 12.23 at the moment, with a PEG ratio of 0.82. This compares to its industry's average P/E of 7.53 and average PEG ratio of 0.66.
RUSHA's Forward P/E has been as high as 12.85 and as low as 8.03, with a median of 10.12. During the same time period, its PEG ratio has been as high as 0.86, as low as 0.54, with a median of 0.67.
Rush Enterprises sports a P/B ratio of 1.83 as well; this compares to its industry's price-to-book ratio of 2.15. In the past 52 weeks, RUSHA's P/B has been as high as 1.89, as low as 1.43, with a median of 1.63.
These are only a few of the key metrics included in Group 1 Automotive and Rush Enterprises strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, GPI and RUSHA look like an impressive value stock at the moment.
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Group 1 Automotive, Inc. (GPI) : Free Stock Analysis Report
Rush Enterprises, Inc. (RUSHA) : Free Stock Analysis Report
