Are These Retail-Wholesale Stocks Undervalued 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, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is Asbury Automotive Group (ABG). ABG is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. ABG has a P/S ratio of 0.43. This compares to its industry's average P/S of 0.44.
Finally, investors should note that ABG has a P/CF ratio of 6.24. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 10.19. ABG's P/CF has been as high as 12.40 and as low as 5.70, with a median of 8.02, all within the past year.
Another great Automotive - Retail and Whole Sales stock you could consider is Penske Automotive Group (PAG), which is a # 1 (Strong Buy) stock with a Value Score of A.
Penske Automotive Group is trading at a forward earnings multiple of 7.27 at the moment, with a PEG ratio of 0.36. This compares to its industry's average P/E of 6.73 and average PEG ratio of 0.34.
Over the past year, PAG's P/E has been as high as 11.62, as low as 7.12, 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 0.55 during the same time period.
Furthermore, Penske Automotive Group holds a P/B ratio of 2.17 and its industry's price-to-book ratio is 2.44. PAG's P/B has been as high as 2.31, as low as 1.42, with a median of 1.94 over the past 12 months.
These are only a few of the key metrics included in Asbury Automotive Group and Penske Automotive Group strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, ABG and PAG look like an impressive value stock at the moment.
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Asbury Automotive Group, Inc. (ABG): Free Stock Analysis Report
Penske Automotive Group, Inc. (PAG): Free Stock Analysis Report
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