Are Investors Undervaluing These Retail-Wholesale Stocks 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...
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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 stock to keep an eye on is Lithia Motors (LAD). LAD is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
We should also highlight that LAD has a P/B ratio of 1.93. 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. LAD's current P/B looks attractive when compared to its industry's average P/B of 2.34. LAD's P/B has been as high as 4.63 and as low as 1.86, with a median of 2.97, over the past year.
Finally, we should also recognize that LAD has a P/CF ratio of 7.81. 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 9.78. Over the past year, LAD's P/CF has been as high as 18.69 and as low as 7.54, with a median of 12.24.
If you're looking for another solid Automotive - Retail and Whole Sales value stock, take a look at Penske Automotive Group (PAG). PAG is a # 1 (Strong Buy) stock with a Value score of A.
Shares of Penske Automotive Group currently holds a Forward P/E ratio of 7.60, and its PEG ratio is 0.38. In comparison, its industry sports average P/E and PEG ratios of 6.58 and 0.34.
Over the past year, PAG's P/E has been as high as 11.62, as low as 7.18, with a median of 8.90; its PEG ratio has been as high as 2.09, as low as 0.36, with a median of 0.60 during the same time period.
Penske Automotive Group sports a P/B ratio of 2.08 as well; this compares to its industry's price-to-book ratio of 2.34. In the past 52 weeks, PAG's P/B has been as high as 2.31, as low as 1.39, with a median of 1.92.
These are just a handful of the figures considered in Lithia Motors and Penske 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 LAD and PAG is an impressive value stock right now.
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Lithia Motors, Inc. (LAD): Free Stock Analysis Report
Penske Automotive Group, Inc. (PAG): Free Stock Analysis Report
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