Are These Retail-Wholesale Stocks a Great Value Stocks Right Now?
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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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.
One company value investors might notice is Asbury Automotive Group (ABG). ABG is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 5.61. This compares to its industry's average Forward P/E of 6.27. ABG's Forward P/E has been as high as 14.39 and as low as 5.58, with a median of 10.19, all within the past year.
Investors should also note that ABG holds a PEG ratio of 0.30. 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 PEG compares to its industry's average PEG of 0.32. ABG's PEG has been as high as 0.78 and as low as 0.30, with a median of 0.55, all within the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ABG has a P/S ratio of 0.41. This compares to its industry's average P/S of 0.42.
Finally, investors should note that ABG has a P/CF ratio of 5.75. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. ABG's P/CF compares to its industry's average P/CF of 9.73. Over the past year, ABG's P/CF has been as high as 12.40 and as low as 5.72, with a median of 8.92.
Another great Automotive - Retail and Whole Sales stock you could consider is Penske Automotive Group (PAG), which is a # 2 (Buy) stock with a Value Score of A.
Shares of Penske Automotive Group currently holds a Forward P/E ratio of 7.32, and its PEG ratio is 0.37. In comparison, its industry sports average P/E and PEG ratios of 6.27 and 0.32.
PAG's price-to-earnings ratio has been as high as 11.62 and as low as 7.18, with a median of 8.91, while its PEG ratio has been as high as 2.09 and as low as 0.37, with a median of 1.02, all within the past year.
Penske Automotive Group sports a P/B ratio of 2.02 as well; this compares to its industry's price-to-book ratio of 2.33. In the past 52 weeks, PAG's P/B has been as high as 2.31, as low as 1.39, with a median of 1.88.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Asbury Automotive Group and Penske Automotive Group are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ABG and PAG feels like a great value stock at the moment.
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Asbury Automotive Group, Inc. (ABG) : Free Stock Analysis Report
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