Is Asbury Automotive Group (ABG) a Great Value Stock Right Now?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

Asbury Automotive Group (ABG) is a stock many investors are watching right now. ABG is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 9.46 right now. For comparison, its industry sports an average P/E of 11.69. 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 10.01.

ABG is also sporting a PEG ratio of 0.67. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. ABG’s industry has an average PEG of 1.97 right now. Within the past year, ABG’s PEG has been as high as 1.21 and as low as 0.22, with a median of 0.66.

Finally, investors will want to recognize that ABG has a P/CF ratio of 8.93. This metric takes into account a company’s operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. ABG’s current P/CF looks attractive when compared to its industry’s average P/CF of 11.41. Over the past year, ABG’s P/CF has been as high as 9.87 and as low as 3.53, with a median of 7.64.

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.

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