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Is Penske Automotive (PAG) Stock Undervalued Right Now?
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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.
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 company value investors might notice is Penske Automotive (PAG - Free Report) . PAG is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 8.74, which compares to its industry's average of 8.93. Over the last 12 months, PAG's Forward P/E has been as high as 11.62 and as low as 8.25, with a median of 9.44.
Another valuation metric that we should highlight is PAG's P/B ratio of 1.93. 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. PAG's current P/B looks attractive when compared to its industry's average P/B of 2.20. Over the past 12 months, PAG's P/B has been as high as 2.15 and as low as 1.24, with a median of 1.58.
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 0.29. This compares to its industry's average P/S of 0.43.
Finally, we should also recognize that PAG has a P/CF ratio of 6.67. 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. PAG's P/CF compares to its industry's average P/CF of 10.53. Over the past year, PAG's P/CF has been as high as 10.37 and as low as 5.61, with a median of 8.33.
Value investors will likely look at more than just these metrics, but the above data helps show that Penske Automotive is likely undervalued currently. And when considering the strength of its earnings outlook, PAG sticks out at as one of the market's strongest value stocks.
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Is Penske Automotive (PAG) Stock Undervalued Right Now?
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.
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 company value investors might notice is Penske Automotive (PAG - Free Report) . PAG is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 8.74, which compares to its industry's average of 8.93. Over the last 12 months, PAG's Forward P/E has been as high as 11.62 and as low as 8.25, with a median of 9.44.
Another valuation metric that we should highlight is PAG's P/B ratio of 1.93. 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. PAG's current P/B looks attractive when compared to its industry's average P/B of 2.20. Over the past 12 months, PAG's P/B has been as high as 2.15 and as low as 1.24, with a median of 1.58.
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 0.29. This compares to its industry's average P/S of 0.43.
Finally, we should also recognize that PAG has a P/CF ratio of 6.67. 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. PAG's P/CF compares to its industry's average P/CF of 10.53. Over the past year, PAG's P/CF has been as high as 10.37 and as low as 5.61, with a median of 8.33.
Value investors will likely look at more than just these metrics, but the above data helps show that Penske Automotive is likely undervalued currently. And when considering the strength of its earnings outlook, PAG sticks out at as one of the market's strongest value stocks.