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Should Value Investors Buy Penske Automotive (PAG) 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
Penske Automotive (PAG - Free Report) is a stock many investors are watching right now. PAG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 8.57, which compares to its industry's average of 9.33. PAG's Forward P/E has been as high as 11.99 and as low as 8.25, with a median of 9.58, all within the past year.
We should also highlight that PAG has a P/B ratio of 1.75. 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. This stock's P/B looks solid versus its industry's average P/B of 2.44. PAG's P/B has been as high as 2.15 and as low as 1.12, with a median of 1.52, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. PAG has a P/S ratio of 0.3. This compares to its industry's average P/S of 0.45.
Finally, we should also recognize that PAG has a P/CF ratio of 7.70. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 9.09. PAG's P/CF has been as high as 10.37 and as low as 6.26, with a median of 8.42, all within the past year.
These are only a few of the key metrics included in Penske Automotive's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, PAG looks like an impressive value stock at the moment.
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Should Value Investors Buy Penske Automotive (PAG) 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
Penske Automotive (PAG - Free Report) is a stock many investors are watching right now. PAG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 8.57, which compares to its industry's average of 9.33. PAG's Forward P/E has been as high as 11.99 and as low as 8.25, with a median of 9.58, all within the past year.
We should also highlight that PAG has a P/B ratio of 1.75. 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. This stock's P/B looks solid versus its industry's average P/B of 2.44. PAG's P/B has been as high as 2.15 and as low as 1.12, with a median of 1.52, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. PAG has a P/S ratio of 0.3. This compares to its industry's average P/S of 0.45.
Finally, we should also recognize that PAG has a P/CF ratio of 7.70. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 9.09. PAG's P/CF has been as high as 10.37 and as low as 6.26, with a median of 8.42, all within the past year.
These are only a few of the key metrics included in Penske Automotive's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, PAG looks like an impressive value stock at the moment.