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Are These Retail-Wholesale Stocks 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.

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.

One stock to keep an eye on is Group 1 Automotive (GPI). GPI is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 4.99, while its industry has an average P/E of 6.07. GPI's Forward P/E has been as high as 9.62 and as low as 4.73, with a median of 6.37, all within the past year.

We should also highlight that GPI has a P/B ratio of 1.83. 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 company's current P/B looks solid when compared to its industry's average P/B of 2.21. Within the past 52 weeks, GPI's P/B has been as high as 2.19 and as low as 1.54, with a median of 1.81.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. GPI has a P/S ratio of 0.24. This compares to its industry's average P/S of 0.43.

Finally, our model also underscores that GPI has a P/CF ratio of 5.25. 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 6.78. GPI's P/CF has been as high as 8.46 and as low as 4.58, with a median of 5.38, all within the past year.

If you're looking for another solid Automotive - Retail and Whole Sales value stock, take a look at Sonic Automotive (SAH). SAH is a # 1 (Strong Buy) stock with a Value score of A.

Furthermore, Sonic Automotive holds a P/B ratio of 1.72 and its industry's price-to-book ratio is 2.21. SAH's P/B has been as high as 2.83, as low as 1.69, with a median of 2.19 over the past 12 months.

These are just a handful of the figures considered in Group 1 Automotive and Sonic 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 GPI and SAH is an impressive value stock right now.


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Group 1 Automotive, Inc. (GPI): Free Stock Analysis Report
 
Sonic Automotive, Inc. (SAH): Free Stock Analysis Report
 
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