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Should Value Investors Buy America's Car-Mart (CRMT) Stock?

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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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 America's Car-Mart (CRMT - Free Report) . CRMT is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 6.61, which compares to its industry's average of 11.07. Over the past year, CRMT's Forward P/E has been as high as 15.59 and as low as 6.61, with a median of 12.02.

CRMT is also sporting a PEG ratio of 0.80. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CRMT's industry currently sports an average PEG of 1.81. Over the past 52 weeks, CRMT's PEG has been as high as 2.06 and as low as 0.55, with a median of 1.32.

We should also highlight that CRMT has a P/B ratio of 1.41. 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. CRMT's current P/B looks attractive when compared to its industry's average P/B of 1.84. Within the past 52 weeks, CRMT's P/B has been as high as 3.08 and as low as 1.41, with a median of 2.31.

Finally, investors should note that CRMT has a P/CF ratio of 6.78. 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. CRMT's P/CF compares to its industry's average P/CF of 8.63. CRMT's P/CF has been as high as 15.04 and as low as 6.78, with a median of 11.88, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that America's Car-Mart is likely undervalued currently. And when considering the strength of its earnings outlook, CRMT sticks out at as one of the market's strongest value stocks.


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