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Should Value Investors Buy Asbury Automotive Group (ABG) Stock?

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Zacks Equity Research
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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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. 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 to watch right now is Asbury Automotive Group (ABG). ABG is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 8.96 right now. For comparison, its industry sports an average P/E of 10.71. Over the past year, ABG's Forward P/E has been as high as 12.94 and as low as 4.06, with a median of 9.37.

Finally, investors will want to recognize that ABG has a P/CF ratio of 10.15. 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 current P/CF looks attractive when compared to its industry's average P/CF of 11.41. ABG's P/CF has been as high as 10.32 and as low as 3.53, with a median of 8.10, all within the past year.

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


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Zacks Investment Research