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Should Value Investors Buy America's Car-Mart (CRMT) 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.

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.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

America's Car-Mart (CRMT - Free Report) is a stock many investors are watching right now. CRMT is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 5.47 right now. For comparison, its industry sports an average P/E of 11.02. CRMT's Forward P/E has been as high as 15.59 and as low as 4.28, with a median of 11.91, all within the past year.

We also note that CRMT holds a PEG ratio of 0.66. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CRMT's industry currently sports an average PEG of 1.80. Over the last 12 months, CRMT's PEG has been as high as 2.06 and as low as 0.52, with a median of 1.32.

Another notable valuation metric for CRMT is its P/B ratio of 1.06. 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. This stock's P/B looks solid versus its industry's average P/B of 1.84. Within the past 52 weeks, CRMT's P/B has been as high as 2.94 and as low as 0.87, with a median of 2.26.

Finally, our model also underscores that CRMT has a P/CF ratio of 5.35. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 8.63. Over the past 52 weeks, CRMT's P/CF has been as high as 15.04 and as low as 4.39, with a median of 11.74.

Value investors will likely look at more than just these metrics, but the above data helps show that America's Car-Mart is likely undervalued currently. And when considering the strength of its earnings outlook, CRMT sticks out at as one of the market's strongest value stocks.


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