Should Value Investors Buy Asbury Automotive Group (ABG) Stock?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
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 to watch right now is Asbury Automotive Group (ABG). ABG is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 8.48 right now. For comparison, its industry sports an average P/E of 11.89. ABG's Forward P/E has been as high as 12.94 and as low as 4.06, with a median of 10.01, all within the past year.
Finally, investors will want to recognize that ABG has a P/CF ratio of 7.94. 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 11.41. Within the past 12 months, ABG's P/CF has been as high as 9.87 and as low as 3.53, with a median of 7.52.
These are only a few of the key metrics included in Asbury Automotive Group'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, ABG looks like an impressive value stock at the moment.
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