Should Value Investors Buy Group 1 Automotive (GPI) Stock?
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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Group 1 Automotive (GPI). GPI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 6.55. This compares to its industry's average Forward P/E of 7.16. GPI's Forward P/E has been as high as 7 and as low as 3.66, with a median of 5.71, all within the past year.
Another notable valuation metric for GPI is its P/B ratio of 1.49. 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. GPI's current P/B looks attractive when compared to its industry's average P/B of 2.09. 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 love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. GPI has a P/S ratio of 0.22. This compares to its industry's average P/S of 0.32.
Finally, we should also recognize that GPI has a P/CF ratio of 4.75. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. GPI's current P/CF looks attractive when compared to its industry's average P/CF of 6.48. GPI's P/CF has been as high as 4.87 and as low as 2.90, with a median of 3.90, all within the past year.
If you're looking for another solid Automotive - Retail and Whole Sales value stock, take a look at Rush Enterprises (RUSHA). RUSHA is a # 2 (Buy) stock with a Value score of A.
Shares of Rush Enterprises currently holds a Forward P/E ratio of 8.10, and its PEG ratio is 0.54. In comparison, its industry sports average P/E and PEG ratios of 7.16 and 0.63.
Over the past year, RUSHA's P/E has been as high as 8.57, as low as 5.36, with a median of 6.77; its PEG ratio has been as high as 0.57, as low as 0.36, with a median of 2 during the same time period.
Additionally, Rush Enterprises has a P/B ratio of 1.19 while its industry's price-to-book ratio sits at 2.09. For RUSHA, this valuation metric has been as high as 1.26, as low as 0.95, with a median of 1.09 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Group 1 Automotive and Rush Enterprises are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GPI and RUSHA feels like a great 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
