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Should Value Investors Buy Group 1 Automotive (GPI) Stock?
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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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
Group 1 Automotive (GPI - Free Report) is a stock many investors are watching right now. GPI is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 4.37, while its industry has an average P/E of 5.28. Over the past year, GPI's Forward P/E has been as high as 8.46 and as low as 4.11, with a median of 5.95.
Another notable valuation metric for GPI is its P/B ratio of 1.47. The P/B is a method of comparing a stock's market value to 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 1.94. GPI's P/B has been as high as 2.11 and as low as 1.28, with a median of 1.77, over the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. GPI has a P/S ratio of 0.2. This compares to its industry's average P/S of 0.32.
Finally, we should also recognize that GPI has a P/CF ratio of 3.88. 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. GPI's current P/CF looks attractive when compared to its industry's average P/CF of 5.53. Over the past year, GPI's P/CF has been as high as 6.85 and as low as 3.39, with a median of 5.22.
Investors could also keep in mind Titan Machinery (TITN - Free Report) , an Automotive - Retail and Whole Sales stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Furthermore, Titan Machinery holds a P/B ratio of 1.24 and its industry's price-to-book ratio is 1.94. TITN's P/B has been as high as 2.09, as low as 1.16, with a median of 1.64 over the past 12 months.
Value investors will likely look at more than just these metrics, but the above data helps show that Group 1 Automotive and Titan Machinery are likely undervalued currently. And when considering the strength of its earnings outlook, GPI and TITN sticks out as one of the market's strongest value stocks.
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Should Value Investors Buy Group 1 Automotive (GPI) Stock?
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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
Group 1 Automotive (GPI - Free Report) is a stock many investors are watching right now. GPI is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 4.37, while its industry has an average P/E of 5.28. Over the past year, GPI's Forward P/E has been as high as 8.46 and as low as 4.11, with a median of 5.95.
Another notable valuation metric for GPI is its P/B ratio of 1.47. The P/B is a method of comparing a stock's market value to 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 1.94. GPI's P/B has been as high as 2.11 and as low as 1.28, with a median of 1.77, over the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. GPI has a P/S ratio of 0.2. This compares to its industry's average P/S of 0.32.
Finally, we should also recognize that GPI has a P/CF ratio of 3.88. 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. GPI's current P/CF looks attractive when compared to its industry's average P/CF of 5.53. Over the past year, GPI's P/CF has been as high as 6.85 and as low as 3.39, with a median of 5.22.
Investors could also keep in mind Titan Machinery (TITN - Free Report) , an Automotive - Retail and Whole Sales stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Furthermore, Titan Machinery holds a P/B ratio of 1.24 and its industry's price-to-book ratio is 1.94. TITN's P/B has been as high as 2.09, as low as 1.16, with a median of 1.64 over the past 12 months.
Value investors will likely look at more than just these metrics, but the above data helps show that Group 1 Automotive and Titan Machinery are likely undervalued currently. And when considering the strength of its earnings outlook, GPI and TITN sticks out as one of the market's strongest value stocks.