We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Should Value Investors Pick Genuine Parts (GPC) Stock Now?
Read MoreHide Full Article
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Genuine Parts Company (GPC - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Genuine Parts has a trailing twelve months PE ratio of 19.1, as you can see in the chart below:
This level actually compares favorably with the market at large, as the PE for the S&P 500 stands at about 20.6. If we focus on the long-term PE trend, Genuine Parts’ current PE level puts it slightly below its midpoint over the past five years. Moreover, the current level is fairly below the highs for this stock, suggesting it might be a good entry point.
Further, the stock’s PE also compares favorably with the industry’s trailing twelve months PE ratio, which stands at 19.9. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Genuine Parts has a forward PE ratio (price relative to this year’s earnings) of just 15.5, so it is fair to say that a slightly more value-oriented path may be ahead for Genuine Parts stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Genuine Parts has a P/S ratio of about 0.8. This is significantly lower than the S&P 500 average, which comes in at 3.3 right now. Also, as we can see in the chart below, this is slightly below the highs for this stock in particular over the past few years.
If anything, GPC is toward the lower end of its range in the time period from a P/S metric, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Genuine Parts currently has a Zacks Value Style Score of B, putting it into the top 40% of all stocks we cover from this look. This makes Genuine Parts a solid choice for value investors.
What About the Stock Overall?
Though Genuine Parts might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of C and a Momentum score of C. This gives GPC a Zacks VGM score—or its overarching fundamental grade—of C. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been mixed at best. The current quarter has seen two estimates go higher in the past sixty days compared to none lower, while the full year estimate has seen three upward and two downward revisions in the same time period.
As a result, the current quarter consensus estimate has risen by 6.5% in the past two months, while the full year estimate has decreased 18.9%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
This somewhat mixed trend is why the stock has just a Zacks Rank #3 (Hold) and why we are looking for in-line performance from the company in the near term.
Bottom Line
Genuine Parts is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Moreover, a strong industry rank (Top 39% out of more than 250 industries) further supports the growth potential of the stock.
However, with a Zacks Rank #3, it is hard to get too excited about this company overall. In fact, over the past two years, the industry has underperformed the broader market, as you can see below:
So, value investors might want to wait for estimates and analyst sentiment to turn around in this name first, but once that happens, this stock could be a compelling pick. Moreover, broader factors at the industry level support the growth potential of the company as well.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Should Value Investors Pick Genuine Parts (GPC) Stock Now?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
![](https://staticx-tuner.zacks.com/images/zadmin_tuner_image/gpc1.jpg)
![](https://staticx-tuner.zacks.com/images/zadmin_tuner_image/gpc2.jpg)
![](https://staticx-tuner.zacks.com/images/zadmin_tuner_image/gpc3.jpg)
![](https://staticx-tuner.zacks.com/images/zadmin_tuner_image/gpc4.jpg)
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Genuine Parts Company (GPC - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Genuine Parts has a trailing twelve months PE ratio of 19.1, as you can see in the chart below:
This level actually compares favorably with the market at large, as the PE for the S&P 500 stands at about 20.6. If we focus on the long-term PE trend, Genuine Parts’ current PE level puts it slightly below its midpoint over the past five years. Moreover, the current level is fairly below the highs for this stock, suggesting it might be a good entry point.
Further, the stock’s PE also compares favorably with the industry’s trailing twelve months PE ratio, which stands at 19.9. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Genuine Parts has a forward PE ratio (price relative to this year’s earnings) of just 15.5, so it is fair to say that a slightly more value-oriented path may be ahead for Genuine Parts stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Genuine Parts has a P/S ratio of about 0.8. This is significantly lower than the S&P 500 average, which comes in at 3.3 right now. Also, as we can see in the chart below, this is slightly below the highs for this stock in particular over the past few years.
If anything, GPC is toward the lower end of its range in the time period from a P/S metric, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Genuine Parts currently has a Zacks Value Style Score of B, putting it into the top 40% of all stocks we cover from this look. This makes Genuine Parts a solid choice for value investors.
What About the Stock Overall?
Though Genuine Parts might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of C and a Momentum score of C. This gives GPC a Zacks VGM score—or its overarching fundamental grade—of C. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been mixed at best. The current quarter has seen two estimates go higher in the past sixty days compared to none lower, while the full year estimate has seen three upward and two downward revisions in the same time period.
As a result, the current quarter consensus estimate has risen by 6.5% in the past two months, while the full year estimate has decreased 18.9%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Genuine Parts Company Price and Consensus
Genuine Parts Company Price and Consensus | Genuine Parts Company Quote
This somewhat mixed trend is why the stock has just a Zacks Rank #3 (Hold) and why we are looking for in-line performance from the company in the near term.
![](https://staticx-tuner.zacks.com/images/zadmin_tuner_image/gpc6.jpg)
Bottom Line
Genuine Parts is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Moreover, a strong industry rank (Top 39% out of more than 250 industries) further supports the growth potential of the stock.
However, with a Zacks Rank #3, it is hard to get too excited about this company overall. In fact, over the past two years, the industry has underperformed the broader market, as you can see below:
So, value investors might want to wait for estimates and analyst sentiment to turn around in this name first, but once that happens, this stock could be a compelling pick. Moreover, broader factors at the industry level support the growth potential of the company as well.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>