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Should Value Investors Buy Sonic Automotive (SAH) 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 to watch right now is Sonic Automotive (SAH - Free Report) . SAH is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value.
SAH is also sporting a PEG ratio of 0.63. 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. SAH's industry has an average PEG of 0.83 right now. SAH's PEG has been as high as 0.74 and as low as 0.44, with a median of 0.53, all within the past year.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SAH has a P/S ratio of 0.17. This compares to its industry's average P/S of 0.28.
Finally, we should also recognize that SAH has a P/CF ratio of 8.93. 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. SAH's current P/CF looks attractive when compared to its industry's average P/CF of 10.32. SAH's P/CF has been as high as 10.08 and as low as 5.06, with a median of 6.80, all within the past year.
These are only a few of the key metrics included in Sonic 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, SAH looks like an impressive value stock at the moment.
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Should Value Investors Buy Sonic Automotive (SAH) 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 to watch right now is Sonic Automotive (SAH - Free Report) . SAH is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value.
SAH is also sporting a PEG ratio of 0.63. 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. SAH's industry has an average PEG of 0.83 right now. SAH's PEG has been as high as 0.74 and as low as 0.44, with a median of 0.53, all within the past year.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SAH has a P/S ratio of 0.17. This compares to its industry's average P/S of 0.28.
Finally, we should also recognize that SAH has a P/CF ratio of 8.93. 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. SAH's current P/CF looks attractive when compared to its industry's average P/CF of 10.32. SAH's P/CF has been as high as 10.08 and as low as 5.06, with a median of 6.80, all within the past year.
These are only a few of the key metrics included in Sonic 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, SAH looks like an impressive value stock at the moment.