Should Value Investors Buy Group 1 Automotive (GPI) 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.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
Group 1 Automotive (GPI) is a stock many investors are watching right now. GPI is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 6.41, while its industry has an average P/E of 7.31. Over the last 12 months, GPI's Forward P/E has been as high as 6.67 and as low as 3.66, with a median of 4.86.
We should also highlight that GPI has a P/B ratio of 1.48. The P/B ratio pits a stock's market value against 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 2.20. Over the past year, 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. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. GPI has a P/S ratio of 0.21. This compares to its industry's average P/S of 0.33.
Finally, investors should note that GPI has a P/CF ratio of 4.40. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 6.28. Within the past 12 months, GPI's P/CF has been as high as 4.41 and as low as 2.90, with a median of 3.87.
Rush Enterprises (RUSHA) may be another strong Automotive - Retail and Whole Sales stock to add to your shortlist. RUSHA is a # 2 (Buy) stock with a Value grade of A.
Shares of Rush Enterprises currently holds a Forward P/E ratio of 11.53, and its PEG ratio is 0.77. In comparison, its industry sports average P/E and PEG ratios of 7.31 and 0.64.
RUSHA's Forward P/E has been as high as 11.78 and as low as 8.03, with a median of 9.87. During the same time period, its PEG ratio has been as high as 0.79, as low as 0.54, with a median of 0.66.
Additionally, Rush Enterprises has a P/B ratio of 1.77 while its industry's price-to-book ratio sits at 2.20. For RUSHA, this valuation metric has been as high as 1.89, as low as 1.43, with a median of 1.63 over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Group 1 Automotive and Rush Enterprises are likely undervalued currently. And when considering the strength of its earnings outlook, GPI and RUSHA sticks out as one of the market's strongest value stocks.
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Group 1 Automotive, Inc. (GPI) : Free Stock Analysis Report
Rush Enterprises, Inc. (RUSHA) : Free Stock Analysis Report
