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Are Investors Undervaluing Penske Automotive (PAG) Right Now?
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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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 Penske Automotive (PAG - Free Report) . PAG 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 10.92. This compares to its industry's average Forward P/E of 11.63. Over the past year, PAG's Forward P/E has been as high as 12.95 and as low as 3.82, with a median of 8.70.
Another valuation metric that we should highlight is PAG's P/B ratio of 1.38. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.50. Over the past year, PAG's P/B has been as high as 1.66 and as low as 0.61, with a median of 1.36.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. PAG has a P/S ratio of 0.18. This compares to its industry's average P/S of 0.27.
Finally, we should also recognize that PAG has a P/CF ratio of 7.55. 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. PAG's P/CF compares to its industry's average P/CF of 11.41. Over the past year, PAG's P/CF has been as high as 8.13 and as low as 3.17, with a median of 6.84.
These are only a few of the key metrics included in Penske Automotive's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, PAG looks like an impressive value stock at the moment.
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Are Investors Undervaluing Penske Automotive (PAG) 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 latest value, growth, and momentum trends to underscore 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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 Penske Automotive (PAG - Free Report) . PAG 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 10.92. This compares to its industry's average Forward P/E of 11.63. Over the past year, PAG's Forward P/E has been as high as 12.95 and as low as 3.82, with a median of 8.70.
Another valuation metric that we should highlight is PAG's P/B ratio of 1.38. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.50. Over the past year, PAG's P/B has been as high as 1.66 and as low as 0.61, with a median of 1.36.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. PAG has a P/S ratio of 0.18. This compares to its industry's average P/S of 0.27.
Finally, we should also recognize that PAG has a P/CF ratio of 7.55. 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. PAG's P/CF compares to its industry's average P/CF of 11.41. Over the past year, PAG's P/CF has been as high as 8.13 and as low as 3.17, with a median of 6.84.
These are only a few of the key metrics included in Penske Automotive's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, PAG looks like an impressive value stock at the moment.