Company Description
AutoNation, Inc. owns about 250 automotive retail locations. The company sells new and used cars in addition to providing services, financing, body work etc.
Double-Digit Sales Growth
On Jan 11 AutoNation announced December sales figures that showed a 12% growth in unit sales, and a 13% increase for the year. Each segment (Domestic, Import and Premium Luxury) saw growth.
The company does not report full financial results until Feb 3, so consider the risk/reward trade off of getting in just before earnings.
Bullish Estimates?
Normally I avoid sliding earnings like the plague. And AutoNation's 2010 consensus is off about 4 cents since its last earnings report. While we are still waiting for the full-year earnings report, focus has shifted to 2011.
The Zacks Consensus Estimate for next year is up, albeit slightly but up none the less. Forecasts are averaging $1.82, up 2 cents and with 2 upward revisions in the past month. Annul growth rates are expected to be 27% in 2010 and 24% in 2011
Solid Value as Well
Shares are trading at roughly 16 times 2011 estimates. When you factor in the growth rates for the next 5 years, you get a PEG of 0.8 times. So, the growth is priced at a nice discount.
The Chart
You can see that shares fell sharply on Oct 28's earnings miss. However, the stock rebounded rapidly and has been on a nice run since.
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Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Small Cap Trader service
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AUTONATION INC (AN): Free Stock Analysis Report
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