We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Should Value Investors Buy Group 1 Automotive (GPI) Stock?
Read MoreHide Full Article
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.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice 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 holds a P/E ratio of 8.02, while its industry has an average P/E of 9.52. Over the past 52 weeks, GPI's Forward P/E has been as high as 8.66 and as low as 5.56, with a median of 7.07.
We also note that GPI holds a PEG ratio of 1.35. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. GPI's PEG compares to its industry's average PEG of 1.45. Within the past year, GPI's PEG has been as high as 4.15 and as low as 1.15, with a median of 1.69.
We should also highlight that GPI has a P/B ratio of 1.37. 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 attractive against its industry's average P/B of 1.63. GPI's P/B has been as high as 1.47 and as low as 0.82, with a median of 1.14, 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. GPI has a P/S ratio of 0.14. This compares to its industry's average P/S of 0.24.
Finally, our model also underscores that GPI has a P/CF ratio of 6.82. 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 stock's P/CF looks attractive against its industry's average P/CF of 7.39. Within the past 12 months, GPI's P/CF has been as high as 7.31 and as low as 3.11, with a median of 5.34.
These are only a few of the key metrics included in Group 1 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, GPI looks like an impressive value stock at the moment.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Should Value Investors Buy Group 1 Automotive (GPI) 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.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice 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 holds a P/E ratio of 8.02, while its industry has an average P/E of 9.52. Over the past 52 weeks, GPI's Forward P/E has been as high as 8.66 and as low as 5.56, with a median of 7.07.
We also note that GPI holds a PEG ratio of 1.35. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. GPI's PEG compares to its industry's average PEG of 1.45. Within the past year, GPI's PEG has been as high as 4.15 and as low as 1.15, with a median of 1.69.
We should also highlight that GPI has a P/B ratio of 1.37. 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 attractive against its industry's average P/B of 1.63. GPI's P/B has been as high as 1.47 and as low as 0.82, with a median of 1.14, 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. GPI has a P/S ratio of 0.14. This compares to its industry's average P/S of 0.24.
Finally, our model also underscores that GPI has a P/CF ratio of 6.82. 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 stock's P/CF looks attractive against its industry's average P/CF of 7.39. Within the past 12 months, GPI's P/CF has been as high as 7.31 and as low as 3.11, with a median of 5.34.
These are only a few of the key metrics included in Group 1 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, GPI looks like an impressive value stock at the moment.