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Should Value Investors Buy Group 1 Automotive (GPI) 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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
Group 1 Automotive (GPI - Free Report) is a stock many investors are watching right now. GPI 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 7.44, which compares to its industry's average of 10.63. Over the past year, GPI's Forward P/E has been as high as 9.75 and as low as 2.64, with a median of 8.15.
Investors should also note that GPI holds a PEG ratio of 0.95. 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. GPI's industry has an average PEG of 1.80 right now. Over the past 52 weeks, GPI's PEG has been as high as 4.33 and as low as 0.52, with a median of 1.54.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. GPI has a P/S ratio of 0.18. This compares to its industry's average P/S of 0.3.
Finally, we should also recognize that GPI has a P/CF ratio of 9.68. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 11.41. Over the past year, GPI's P/CF has been as high as 11.14 and as low as 2.43, with a median of 7.32.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Group 1 Automotive is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GPI feels like a great value stock at the moment.
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Should Value Investors Buy Group 1 Automotive (GPI) Stock?
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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
Group 1 Automotive (GPI - Free Report) is a stock many investors are watching right now. GPI 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 7.44, which compares to its industry's average of 10.63. Over the past year, GPI's Forward P/E has been as high as 9.75 and as low as 2.64, with a median of 8.15.
Investors should also note that GPI holds a PEG ratio of 0.95. 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. GPI's industry has an average PEG of 1.80 right now. Over the past 52 weeks, GPI's PEG has been as high as 4.33 and as low as 0.52, with a median of 1.54.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. GPI has a P/S ratio of 0.18. This compares to its industry's average P/S of 0.3.
Finally, we should also recognize that GPI has a P/CF ratio of 9.68. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 11.41. Over the past year, GPI's P/CF has been as high as 11.14 and as low as 2.43, with a median of 7.32.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Group 1 Automotive is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GPI feels like a great value stock at the moment.