Should Value Investors Buy Asbury Automotive Group (ABG) Stock?
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, 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 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.
One company value investors might notice is Asbury Automotive Group (ABG). ABG is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 5.68, while its industry has an average P/E of 5.97. Over the last 12 months, ABG's Forward P/E has been as high as 174.50 and as low as 4.57, with a median of 7.82.
We also note that ABG holds a PEG ratio of 0.31. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ABG's industry has an average PEG of 0.49 right now. Over the past 52 weeks, ABG's PEG has been as high as 9.42 and as low as 0.25, with a median of 0.42.
Another valuation metric that we should highlight is ABG's P/B ratio of 2.08. 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. This stock's P/B looks attractive against its industry's average P/B of 2.25. Over the past year, ABG's P/B has been as high as 4.07 and as low as 1.66, with a median of 2.75.
Finally, investors should note that ABG has a P/CF ratio of 5.88. 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. ABG's P/CF compares to its industry's average P/CF of 5.98. Over the past 52 weeks, ABG's P/CF has been as high as 10.46 and as low as 4.75, with a median of 6.91.
If you're looking for another solid Automotive - Retail and Whole Sales value stock, take a look at AutoNation (AN). AN is a # 2 (Buy) stock with a Value score of A.
Shares of AutoNation are currently trading at a forward earnings multiple of 5.81 and a PEG ratio of 0.25 compared to its industry's P/E and PEG ratios of 5.97 and 0.49, respectively.
Over the last 12 months, AN's P/E has been as high as 29.04, as low as 4.99, with a median of 7.91, and its PEG ratio has been as high as 1.23, as low as 0.21, with a median of 0.40.
Furthermore, AutoNation holds a P/B ratio of 3.21 and its industry's price-to-book ratio is 2.25. AN's P/B has been as high as 3.64, as low as 2.24, with a median of 2.99 over the past 12 months.
These are just a handful of the figures considered in Asbury Automotive Group and AutoNation'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 ABG and AN is an impressive value stock right now.
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Asbury Automotive Group, Inc. (ABG) : Free Stock Analysis Report
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