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Why This 1 Value Stock Could Be a Great Addition to Your Portfolio

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Zacks Equity Research
·2 min read
In this article:
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  • GPI
    Watchlist

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors.

While you may have an investing style you rely on, finding great stocks is made easier with the Zacks Style Scores. These are complementary indicators that rate stocks based on value, growth, and/or momentum characteristics.

Why Investors Should Pay Attention to This Value Stock

Value investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, and Price/Cash Flow, the Value Style Score identifies the most attractive and most discounted stocks.

Group 1 Automotive (GPI)

Group 1 Automotive, Inc. is one of the leading automotive retailers in the world, with operations primarily located in the United States and the UK. As of Dec 31, 2021, the company's retail network consisted of 147 and 55 dealerships in the United States and the U.K., respectively. Through these dealerships, the firm sells new and used cars and light trucks. Apart from selling new and used vehicles, the company offers vehicle financing and insurance and service contracts. Further, it provides maintenance and repair services, along with sale of replacement parts and aftermarket automotive products.

GPI boasts a Value Style Score of A and VGM Score of A, and holds a Zacks Rank #2 (Buy) rating. Shares of Group 1 Automotive are trading at a forward earnings multiple of 4.3X, as well as a PEG Ratio of 0.3, a Price/Cash Flow ratio of 4.6X, and a Price/Sales ratio of 0.2X.

Value investors don't just pay attention to a company's valuation ratios; positive earnings play a crucial role, too. Five analysts revised their earnings estimate upwards in the last 60 days for fiscal 2022. The Zacks Consensus Estimate has increased $4.60 to $42.48 per share. GPI has an average earnings surprise of 6.6%.

Investors should take the time to consider GPI for their portfolios due to its solid Zacks Ranks, notable earnings and valuation metrics, and impressive Value and VGM Style Scores.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
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