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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.
Penske Automotive (PAG) is a stock many investors are watching right now. PAG is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 9.79, which compares to its industry’s average of 10.86. Over the past year, PAG’s Forward P/E has been as high as 12.95 and as low as 3.82, with a median of 9.10.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock’s price with the company’s revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. PAG has a P/S ratio of 0.21. This compares to its industry’s average P/S of 0.32.
Finally, we should also recognize that PAG has a P/CF ratio of 9.80. This data point considers a firm’s operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock’s P/CF looks attractive against its industry’s average P/CF of 11.41. Over the past 52 weeks, PAG’s P/CF has been as high as 9.80 and as low as 3.17, with a median of 7.37.
These are just a handful of the figures considered in Penske Automotive’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 is an impressive value stock right now.
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