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, 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.
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.
One company value investors might notice is Asbury Automotive Group (ABG). ABG is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A.
Another notable valuation metric for ABG is its P/B ratio of 1.26. Investors use the P/B ratio to look at a stock's market value versus 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 2.24. Over the past 12 months, ABG's P/B has been as high as 1.71 and as low as 1.14, with a median of 1.32.
Finally, investors should note that ABG has a P/CF ratio of 7.16. 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 10.47. ABG's P/CF has been as high as 11.08 and as low as 6.54, with a median of 8.63, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Asbury Automotive Group is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ABG feels like a great value stock at the moment.
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Asbury Automotive Group, Inc. (ABG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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