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AN or CRMT: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Automotive - Retail and Whole Sales sector might want to consider either AutoNation (AN - Free Report) or America's Car-Mart (CRMT - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, AutoNation is sporting a Zacks Rank of #1 (Strong Buy), while America's Car-Mart has a Zacks Rank of #2 (Buy). This means that AN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

AN currently has a forward P/E ratio of 10.08, while CRMT has a forward P/E of 12.59. We also note that AN has a PEG ratio of 0.82. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CRMT currently has a PEG ratio of 0.93.

Another notable valuation metric for AN is its P/B ratio of 2.61. 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. For comparison, CRMT has a P/B of 2.64.

Based on these metrics and many more, AN holds a Value grade of A, while CRMT has a Value grade of C.

AN stands above CRMT thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AN is the superior value option right now.


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