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Are Investors Undervaluing Sonic Automotive (SAH) Right Now?
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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.
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.
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.
Sonic Automotive (SAH - Free Report) is a stock many investors are watching right now. SAH is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A.
Another valuation metric that we should highlight is SAH's P/B ratio of 1.55. 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 1.81. Over the past year, SAH's P/B has been as high as 1.65 and as low as 0.70, with a median of 1.12.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. SAH has a P/S ratio of 0.13. This compares to its industry's average P/S of 0.27.
Finally, investors should note that SAH has a P/CF ratio of 6.74. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 8.47. SAH's P/CF has been as high as 7.17 and as low as 3, with a median of 4.94, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Sonic Automotive is likely undervalued currently. And when considering the strength of its earnings outlook, SAH sticks out at as one of the market's strongest value stocks.
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Are Investors Undervaluing Sonic Automotive (SAH) Right Now?
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.
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.
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.
Sonic Automotive (SAH - Free Report) is a stock many investors are watching right now. SAH is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A.
Another valuation metric that we should highlight is SAH's P/B ratio of 1.55. 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 1.81. Over the past year, SAH's P/B has been as high as 1.65 and as low as 0.70, with a median of 1.12.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. SAH has a P/S ratio of 0.13. This compares to its industry's average P/S of 0.27.
Finally, investors should note that SAH has a P/CF ratio of 6.74. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 8.47. SAH's P/CF has been as high as 7.17 and as low as 3, with a median of 4.94, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Sonic Automotive is likely undervalued currently. And when considering the strength of its earnings outlook, SAH sticks out at as one of the market's strongest value stocks.