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.
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 Asbury Automotive Group (ABG - Free Report) . ABG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 8.83, which compares to its industry's average of 11.18. Over the past year, ABG's Forward P/E has been as high as 12.29 and as low as 7.68, with a median of 9.27.
We also note that ABG holds a PEG ratio of 0.62. 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. ABG's PEG compares to its industry's average PEG of 1.82. ABG's PEG has been as high as 1.21 and as low as 0.51, with a median of 0.65, all within the past year.
Finally, investors will want to recognize that ABG has a P/CF ratio of 7.76. 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. This stock's P/CF looks attractive against its industry's average P/CF of 8.63. Over the past year, ABG's P/CF has been as high as 9.87 and as low as 5.80, with a median of 7.32.
Value investors will likely look at more than just these metrics, but the above data helps show that Asbury Automotive Group is likely undervalued currently. And when considering the strength of its earnings outlook, ABG sticks out at as one of the market's strongest value stocks.