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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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 AutoNation (AN - Free Report) . AN is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 9.63 right now. For comparison, its industry sports an average P/E of 11.16. Over the past year, AN's Forward P/E has been as high as 14.25 and as low as 4.56, with a median of 10.45.
Investors should also note that AN holds a PEG ratio of 1.19. 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. AN's industry currently sports an average PEG of 1.89. Over the last 12 months, AN's PEG has been as high as 4.97 and as low as 1.18, with a median of 3.16.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. AN has a P/S ratio of 0.24. This compares to its industry's average P/S of 0.3.
Finally, we should also recognize that AN has a P/CF ratio of 6.13. 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. AN's P/CF has been as high as 8.42 and as low as 3.22, with a median of 6.21, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that AutoNation is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AN feels like a great value stock at the moment.
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Is AutoNation (AN) Stock Undervalued Right Now?
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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 AutoNation (AN - Free Report) . AN is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 9.63 right now. For comparison, its industry sports an average P/E of 11.16. Over the past year, AN's Forward P/E has been as high as 14.25 and as low as 4.56, with a median of 10.45.
Investors should also note that AN holds a PEG ratio of 1.19. 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. AN's industry currently sports an average PEG of 1.89. Over the last 12 months, AN's PEG has been as high as 4.97 and as low as 1.18, with a median of 3.16.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. AN has a P/S ratio of 0.24. This compares to its industry's average P/S of 0.3.
Finally, we should also recognize that AN has a P/CF ratio of 6.13. 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. AN's P/CF has been as high as 8.42 and as low as 3.22, with a median of 6.21, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that AutoNation is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AN feels like a great value stock at the moment.