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Are Investors Undervaluing These Retail-Wholesale Stocks Right Now?

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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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

Penske Automotive Group (PAG) is a stock many investors are watching right now. PAG is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Another valuation metric that we should highlight is PAG's P/B ratio of 1.88. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. PAG's current P/B looks attractive when compared to its industry's average P/B of 2.05. PAG's P/B has been as high as 2.31 and as low as 1.61, with a median of 1.97, over the past year.

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. PAG has a P/S ratio of 0.3. This compares to its industry's average P/S of 0.44.

If you're looking for another solid Automotive - Retail and Whole Sales value stock, take a look at Sonic Automotive (SAH). SAH is a # 1 (Strong Buy) stock with a Value score of A.

Sonic Automotive sports a P/B ratio of 2.21 as well; this compares to its industry's price-to-book ratio of 2.05. In the past 52 weeks, SAH's P/B has been as high as 2.83, as low as 1.81, with a median of 2.21.

These are only a few of the key metrics included in Penske Automotive Group and Sonic Automotive strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, PAG and SAH look like an impressive value stock at the moment.


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Penske Automotive Group, Inc. (PAG) : Free Stock Analysis Report
 
Sonic Automotive, Inc. (SAH) : Free Stock Analysis Report
 
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