Are Investors Undervaluing Asbury Automotive Group (ABG) Right Now?

Zacks Equity Research
·2-min read

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.

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.

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 Asbury Automotive Group (ABG). ABG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 8.39. This compares to its industry's average Forward P/E of 10.88. Over the past year, ABG's Forward P/E has been as high as 12.94 and as low as 4.06, with a median of 9.51.

We also note that ABG holds a PEG ratio of 0.67. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ABG's PEG compares to its industry's average PEG of 1.84. Over the past 52 weeks, ABG's PEG has been as high as 1.21 and as low as 0.22, with a median of 0.63.

Finally, our model also underscores that ABG has a P/CF ratio of 8.88. 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 11.41. ABG's P/CF has been as high as 9.87 and as low as 3.53, with a median of 7.98, all within the past year.

These are just a handful of the figures considered in Asbury Automotive Group'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 ABG is an impressive value stock right now.


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