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Are These Retail-Wholesale Stocks Undervalued Right Now?
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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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
One company to watch right now is Group 1 Automotive (GPI - Free Report) . GPI is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 4.90, which compares to its industry's average of 6.05. Over the past year, GPI's Forward P/E has been as high as 9.62 and as low as 4.73, with a median of 6.64.
Another valuation metric that we should highlight is GPI's P/B ratio of 1.59. The P/B ratio pits a stock's market value against 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 2.27. GPI's P/B has been as high as 2.19 and as low as 1.52, with a median of 1.81, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. GPI has a P/S ratio of 0.23. This compares to its industry's average P/S of 0.42.
Finally, our model also underscores that GPI has a P/CF ratio of 4.84. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. GPI's current P/CF looks attractive when compared to its industry's average P/CF of 9.48. Over the past year, GPI's P/CF has been as high as 8.49 and as low as 4.64, with a median of 5.57.
Sonic Automotive (SAH - Free Report) may be another strong Automotive - Retail and Whole Sales stock to add to your shortlist. SAH is a # 2 (Buy) stock with a Value grade of A.
Sonic Automotive also has a P/B ratio of 1.98 compared to its industry's price-to-book ratio of 2.27. Over the past year, its P/B ratio has been as high as 2.83, as low as 1.81, with a median of 2.22.
These are only a few of the key metrics included in Group 1 Automotive and Sonic Automotive strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, GPI and SAH look like an impressive value stock at the moment.
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Are These Retail-Wholesale Stocks Undervalued Right Now?
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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
One company to watch right now is Group 1 Automotive (GPI - Free Report) . GPI is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 4.90, which compares to its industry's average of 6.05. Over the past year, GPI's Forward P/E has been as high as 9.62 and as low as 4.73, with a median of 6.64.
Another valuation metric that we should highlight is GPI's P/B ratio of 1.59. The P/B ratio pits a stock's market value against 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 2.27. GPI's P/B has been as high as 2.19 and as low as 1.52, with a median of 1.81, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. GPI has a P/S ratio of 0.23. This compares to its industry's average P/S of 0.42.
Finally, our model also underscores that GPI has a P/CF ratio of 4.84. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. GPI's current P/CF looks attractive when compared to its industry's average P/CF of 9.48. Over the past year, GPI's P/CF has been as high as 8.49 and as low as 4.64, with a median of 5.57.
Sonic Automotive (SAH - Free Report) may be another strong Automotive - Retail and Whole Sales stock to add to your shortlist. SAH is a # 2 (Buy) stock with a Value grade of A.
Sonic Automotive also has a P/B ratio of 1.98 compared to its industry's price-to-book ratio of 2.27. Over the past year, its P/B ratio has been as high as 2.83, as low as 1.81, with a median of 2.22.
These are only a few of the key metrics included in Group 1 Automotive and Sonic Automotive strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, GPI and SAH look like an impressive value stock at the moment.