Stock on Watch: Asbury Automotive Group, Inc. (ABG)

Company Profile:

Asbury Automotive Group, Inc. operates as an automotive retailer in the United States. It offers a range of automotive products and services, including new and used vehicles; and vehicle repair and maintenance, replacement parts, and collision repair services. The company also provides finance and insurance, including arranging vehicle financing through third parties; and aftermarket products, such as extended service contracts, guaranteed asset protection insurance, prepaid maintenance, and credit life and disability insurance. It sells used vehicles to individual retail customers and other dealers at auction. As of December 31, 2015, the company owned and operated 99 new vehicle franchises representing 28 brands of automobiles at 81 dealership locations, and 25 collision centers in the United States. It also owned and operated three stand-alone used vehicle stores under the Q auto brand name in Florida. Asbury Automotive Group, Inc. was founded in 1995 and is headquartered in Duluth, Georgia.

Recent News:

On July 26, 2016, Asbury Automotive Group, Inc. reported net income for the second quarter 2016 of $36.7 million, or $1.65 per diluted share, compared to $41.1 million, or $1.52 per diluted share in the prior year quarter, a 9% increase per diluted share. Total revenue for the second quarter was $1.6 billion, down 4% from the prior year period. Total revenue on a same store basis was down 1% from the prior year period.

On July 26, 2016, Asbury Automotive Group, Inc. announced that it has entered into a second amended and restated $1.3 billion, five-year syndicated senior credit facility.

On April 26, 2016, Asbury Automotive Group, Inc. reported net income for the first quarter 2016 was $31.0 million, or $1.27 per diluted share, compared to $35.9 million, or $1.30 per diluted share in the prior year period. Total revenues increased 1% to $1.6 billion.

Fundamental Analysis:

Ninestocks analyzes several different financial aspects: Growth, Profitability, solvency and efficiency.

Growth – Measures the growth of both the company’s income statement and cash flow.

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Profitability – Measures the historical price movement of the stock.

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Solvency – Measures the solvency of the company based on several ratios.

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Efficiency – Measures the strength and historic growth of a company’s return on invested capital.

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Conclusion:

ABG’s strengths can be seen in its better growth, strong profitability and robust efficiency. Its revenue and net income have increased over several years. Technical indicators signal the bullish signs, as there is a bullish cross in MACD and Stochastic Oscillator and RSI is increasing to 54.89. We rate Asbury Automotive Group, Inc. (ABG) a STRONG BUY.