The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
One company value investors might notice is Penske Automotive Group (NYSE:PAG). PAG is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.
Another valuation metric that we should highlight is PAG's P/B ratio of 2.10. 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 company's current P/B looks solid when compared to its industry's average P/B of 2.44. Over the past 12 months, PAG's P/B has been as high as 2.31 and as low as 1.39, with a median of 1.90.
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. PAG has a P/S ratio of 0.32. This compares to its industry's average P/S of 0.43.
Finally, we should also recognize that PAG has a P/CF ratio of 6.88. 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. PAG's current P/CF looks attractive when compared to its industry's average P/CF of 10.18. Within the past 12 months, PAG's P/CF has been as high as 10.37 and as low as 5.61, with a median of 7.68.
Another great Automotive - Retail and Whole Sales stock you could consider is Rush Enterprises (RUSHA), which is a # 2 (Buy) stock with a Value Score of A.
Rush Enterprises is trading at a forward earnings multiple of 13.24 at the moment, with a PEG ratio of 0.88. This compares to its industry's average P/E of 6.55 and average PEG ratio of 0.34.
RUSHA's price-to-earnings ratio has been as high as 20.76 and as low as 10.91, with a median of 13.62, while its PEG ratio has been as high as 1.38 and as low as 0.73, with a median of 0.91, all within the past year.
Rush Enterprises sports a P/B ratio of 2.15 as well; this compares to its industry's price-to-book ratio of 2.44. In the past 52 weeks, RUSHA's P/B has been as high as 2.25, as low as 1.70, with a median of 1.90.
These are just a handful of the figures considered in Penske Automotive Group and Rush Enterprises's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that PAG and RUSHA is an impressive value stock right now.
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Penske Automotive Group, Inc. (PAG): Free Stock Analysis Report
Rush Enterprises, Inc. (RUSHA): Free Stock Analysis Report
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