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Should Value Investors Buy Penske Automotive (PAG) Stock?
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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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is Penske Automotive (PAG - Free Report) . PAG is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 11.53, which compares to its industry's average of 13.02. Over the last 12 months, PAG's Forward P/E has been as high as 12.95 and as low as 7.14, with a median of 9.67.
PAG is also sporting a PEG ratio of 2.08. 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 2.20. Within the past year, PAG's PEG has been as high as 7.75 and as low as 1.01, with a median of 2.39.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. PAG has a P/S ratio of 0.35. This compares to its industry's average P/S of 0.51.
Finally, our model also underscores that PAG has a P/CF ratio of 10.81. 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. PAG's P/CF has been as high as 10.81 and as low as 4.86, with a median of 8.17, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Penske Automotive is likely undervalued currently. And when considering the strength of its earnings outlook, PAG sticks out at as one of the market's strongest value stocks.
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Should Value Investors Buy Penske Automotive (PAG) Stock?
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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is Penske Automotive (PAG - Free Report) . PAG is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 11.53, which compares to its industry's average of 13.02. Over the last 12 months, PAG's Forward P/E has been as high as 12.95 and as low as 7.14, with a median of 9.67.
PAG is also sporting a PEG ratio of 2.08. 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 2.20. Within the past year, PAG's PEG has been as high as 7.75 and as low as 1.01, with a median of 2.39.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. PAG has a P/S ratio of 0.35. This compares to its industry's average P/S of 0.51.
Finally, our model also underscores that PAG has a P/CF ratio of 10.81. 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. PAG's P/CF has been as high as 10.81 and as low as 4.86, with a median of 8.17, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Penske Automotive is likely undervalued currently. And when considering the strength of its earnings outlook, PAG sticks out at as one of the market's strongest value stocks.