Are Investors Undervaluing Group 1 Automotive (GPI) Right Now?
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...
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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is Group 1 Automotive (GPI). GPI is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 6.26. This compares to its industry's average Forward P/E of 7.53. Over the past 52 weeks, GPI's Forward P/E has been as high as 9.67 and as low as 5.67, with a median of 7.67.
Investors should also recognize that GPI has a P/B ratio of 1.95. Investors use the P/B ratio to look at a stock's market value versus 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 2.49. Over the past 12 months, GPI's P/B has been as high as 2.19 and as low as 1.31, with a median of 1.79.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. GPI has a P/S ratio of 0.27. This compares to its industry's average P/S of 0.43.
Finally, our model also underscores that GPI has a P/CF ratio of 5.84. 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. GPI's current P/CF looks attractive when compared to its industry's average P/CF of 10.20. Over the past 52 weeks, GPI's P/CF has been as high as 8.46 and as low as 4.63, with a median of 6.66.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Group 1 Automotive is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GPI feels like a great value stock at the moment.
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Group 1 Automotive, Inc. (GPI): Free Stock Analysis Report
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