Asbury Story

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ABG -- USA Stock  

USD 94.11  4.17  4.24%

It looks like Lithia Motors will be up for a correction faster as its share price went up 1.53% today to Asbury Automotive's 4.81%As many millenniums are excited about consumer cyclical space, we are going to shadow both, Asbury Automotive and Lithia Motors as a potential shorter-term opportunity. We are going to discuss some of the competitive aspects of both Asbury and Lithia.
Published over a month ago
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What should I sell first Asbury (NYSE:ABG) or Lithia Motors?
By analyzing existing basic indicators between Asbury Automotive and Lithia, you can compare the effects of market volatilities on both companies' prices and check if they can diversify away market risk if combined in one of your portfolios. You can also utilize pair trading strategies for matching a long position in Lithia with a short position in Asbury Automotive. Check out our pair correlation module for more information.

Let's begin by analyzing the assets. The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Asbury Automotive has an asset utilization ratio of 310.07 percent. This indicates that the company is making $3.1 for each dollar of assets. An increasing asset utilization means that Asbury Automotive Group is more efficient with each dollar of assets it utilizes for everyday operations.
Out of tens of thousands of stocks, funds, and ETFs that trade on global exchanges each represent an individual company which you can analyze using comparative analysis. To determine which one of the two companies, such as Asbury or Group is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.

How important is Asbury Automotive's Liquidity

Asbury Automotive financial leverage refers to using borrowed capital as a funding source to finance Asbury Automotive Group ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Asbury Automotive financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Asbury Automotive's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions. It is good to see analyst projects for Asbury Automotive, but it might be worth checking our own buy vs. sell analysis

Correlation Between Asbury and Group 1 Automotive

In general, stock analysis is a method for investors and traders to make individual buying and selling decisions. Stock correlation analysis is also essential because it can help investors realize that they may not be as diversified as they think. Risk management strategies are usually required to make sure all portfolios are properly aligned against their risk tolerance level. You can consider holding Asbury Automotive together with similar or unrelated positions with a negative correlation. For example, you can also add Group 1 to your portfolio. If Group 1 is not perfectly correlated to Asbury Automotive it will diversify some of the market risks out of the positively correlated stocks in your portfolio. However, the disadvantage of this sort of hedging is that it can potentially affect your investment returns throughout market cycles. When Asbury Automotive for example, for example, performs excellent and delivers stable returns, the negatively correlated position you locked in as a hedge may drag your returns down. Please check pair correlation details between ABG and GPI for more information.

A Deeper Perspective

Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include product or services discounts, promotions, as well as early payments on invoices or services rendered in advance.

Revenue Breakdown

Let me now analyze Asbury Automotive revenue. Based on the latest financial disclosure, Asbury Automotive Group reported 7.15 B of revenue. This indicator is about the same for the Consumer Cyclical average (which is currently at 7.13 B) sector and 22.27% lower than that of the Auto & Truck Dealerships industry. The revenue for all United States stocks is 24.22% higher than that of the entity. As for Lithia Motors we see revenue of 12.16 B, which is 32.19% higher than that of the Auto & Truck Dealerships

Asbury7.15 Billion
Sector7.13 Billion
Lithia12.16 Billion
7.2 B
7.1 B
12.2 B

Asbury Automotive to revert back in August

Total risk alpha is down to 0.73. It may indicate a possible volatility dip. Asbury Automotive Group shows above-average downside volatility for the selected time horizon. We advise investors to inspect Asbury Automotive Group further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Asbury Automotive future alpha.

The Current Takeaway on Asbury Automotive Investment

Although many of the other players under the auto & truck dealerships industry are still a bit expensive, Asbury Automotive may offer a potential longer-term growth to shareholders. To summarize, as of the 28th of July 2020, we believe that Asbury Automotive is currently overvalued with low probability of distress in the next two years. However, our primary 30 days buy vs. sell advice on the firm is Strong Buy.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of Asbury Automotive Group. Please refer to our Terms of Use for any information regarding our disclosure principles.

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