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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 stock to keep an eye on is Group 1 Automotive (GPI). GPI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
Another valuation metric that we should highlight is GPI's P/B ratio of 1.79. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 2.26. GPI's P/B has been as high as 2.17 and as low as 1.28, with a median of 1.68, over the past year.
Finally, our model also underscores that GPI has a P/CF ratio of 8.50. 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. GPI's current P/CF looks attractive when compared to its industry's average P/CF of 10.16. Over the past 52 weeks, GPI's P/CF has been as high as 10.31 and as low as 5.13, with a median of 7.59.
Value investors will likely look at more than just these metrics, but the above data helps show that Group 1 Automotive is likely undervalued currently. And when considering the strength of its earnings outlook, GPI sticks out at as one of the market's strongest value stocks.
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Group 1 Automotive, Inc. (GPI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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