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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is AutoNation (AN - Free Report) . AN is currently holding a Zacks Rank #2 (Buy) and a Value grade of A.
Investors should also note that AN holds a PEG ratio of 0.96. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AN's PEG compares to its industry's average PEG of 1.09. Within the past year, AN's PEG has been as high as 3.69 and as low as 0.79, with a median of 1.05.
Finally, our model also underscores that AN has a P/CF ratio of 8.73. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 10.55. Over the past year, AN's P/CF has been as high as 9.11 and as low as 6.47, with a median of 7.58.
If you're looking for another solid Automotive - Retail and Whole Sales value stock, take a look at Lithia Motors (LAD - Free Report) . LAD is a Zacks Rank of #2 (Buy) stock with a Value score of A.
Shares of Lithia Motors are currently trading at a forward earnings multiple of 9.02 and a PEG ratio of 0.65 compared to its industry's P/E and PEG ratios of 8.81 and 1.09, respectively.
LAD's price-to-earnings ratio has been as high as 12.15 and as low as 7.55, with a median of 9.29, while its PEG ratio has been as high as 5.87 and as low as 0.25, with a median of 0.49, all within the past year.
Lithia Motors sports a P/B ratio of 1.22 as well; this compares to its industry's price-to-book ratio of 2.26. In the past 52 weeks, LAD's P/B has been as high as 1.58, as low as 1.04, with a median of 1.26.
These figures are just a handful of the metrics value investors tend to look at, but they help show that AutoNation and Lithia Motors are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AN and LAD feels like a great value stock at the moment.
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Should Value Investors Buy AutoNation (AN) Stock?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is AutoNation (AN - Free Report) . AN is currently holding a Zacks Rank #2 (Buy) and a Value grade of A.
Investors should also note that AN holds a PEG ratio of 0.96. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AN's PEG compares to its industry's average PEG of 1.09. Within the past year, AN's PEG has been as high as 3.69 and as low as 0.79, with a median of 1.05.
Finally, our model also underscores that AN has a P/CF ratio of 8.73. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 10.55. Over the past year, AN's P/CF has been as high as 9.11 and as low as 6.47, with a median of 7.58.
If you're looking for another solid Automotive - Retail and Whole Sales value stock, take a look at Lithia Motors (LAD - Free Report) . LAD is a Zacks Rank of #2 (Buy) stock with a Value score of A.
Shares of Lithia Motors are currently trading at a forward earnings multiple of 9.02 and a PEG ratio of 0.65 compared to its industry's P/E and PEG ratios of 8.81 and 1.09, respectively.
LAD's price-to-earnings ratio has been as high as 12.15 and as low as 7.55, with a median of 9.29, while its PEG ratio has been as high as 5.87 and as low as 0.25, with a median of 0.49, all within the past year.
Lithia Motors sports a P/B ratio of 1.22 as well; this compares to its industry's price-to-book ratio of 2.26. In the past 52 weeks, LAD's P/B has been as high as 1.58, as low as 1.04, with a median of 1.26.
These figures are just a handful of the metrics value investors tend to look at, but they help show that AutoNation and Lithia Motors are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AN and LAD feels like a great value stock at the moment.