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Are Investors Undervaluing Penske Automotive (PAG) Right Now?
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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
Penske Automotive (PAG - Free Report) is a stock many investors are watching right now. PAG is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 8.68, which compares to its industry's average of 10.20. 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 9.23.
PAG is also sporting a PEG ratio of 1.56. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. PAG's PEG compares to its industry's average PEG of 1.72. Over the last 12 months, PAG's PEG has been as high as 8.23 and as low as 1.34, with a median of 3.05.
We should also highlight that PAG has a P/B ratio of 1.48. 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 stock's P/B looks solid versus its industry's average P/B of 1.50. PAG's P/B has been as high as 1.66 and as low as 0.61, with a median of 1.37, over the past year.
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. PAG has a P/S ratio of 0.22. This compares to its industry's average P/S of 0.4.
Finally, our model also underscores that PAG has a P/CF ratio of 8.20. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 11.41. Over the past year, PAG's P/CF has been as high as 9.37 and as low as 3.17, with a median of 7.54.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Penske Automotive is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PAG feels like a great value stock at the moment.
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Are Investors Undervaluing Penske Automotive (PAG) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
Penske Automotive (PAG - Free Report) is a stock many investors are watching right now. PAG is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 8.68, which compares to its industry's average of 10.20. 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 9.23.
PAG is also sporting a PEG ratio of 1.56. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. PAG's PEG compares to its industry's average PEG of 1.72. Over the last 12 months, PAG's PEG has been as high as 8.23 and as low as 1.34, with a median of 3.05.
We should also highlight that PAG has a P/B ratio of 1.48. 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 stock's P/B looks solid versus its industry's average P/B of 1.50. PAG's P/B has been as high as 1.66 and as low as 0.61, with a median of 1.37, over the past year.
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. PAG has a P/S ratio of 0.22. This compares to its industry's average P/S of 0.4.
Finally, our model also underscores that PAG has a P/CF ratio of 8.20. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 11.41. Over the past year, PAG's P/CF has been as high as 9.37 and as low as 3.17, with a median of 7.54.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Penske Automotive is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PAG feels like a great value stock at the moment.