As part of our ongoing series here at The Acquirer’s Multiple, we provide this feature article titled ‘Stock in Focus‘ where we focus on one of the stocks from our Stock Screeners.
One of the cheapest stocks in our Stock Screeners is:
AutoNation, Inc. (NYSE: AN)
AutoNation is the largest automotive dealer in the United States, with 2020 revenue of $20.4 billion and over 230 dealerships and over 300 locations, including collison centers. The firm also has eight AutoNation USA used-vehicle stores, four auction sites, and over 50 collision centers all across 16 states primarily in Sunbelt metropolitan areas. New-vehicle sales account for about 51% of revenue; the company also sells used vehicles, parts, and repair services as well as auto financing. The company (formerly Republic Industries) spun off its waste management unit (Republic Services) in 1999 and its car rental businesses (ANC Rental) in 2000. Wayne Huizenga founded the company in the 1990s to bring the rollup acquisition strategy to auto retailing, which has proved to be a smart move.
A quick look at the share price history for AutoNation (below) over the past twelve months shows that the price is up 106%. Here’s why the company remains undervalued.
Summary
Market Cap: $8.01 Billion
Enterprise Value: $12.22 Billion
Operating Earnings
Operating Earnings: $1.67 Billion
Acquirer’s Multiple
Acquirer’s Multiple: 7.31
Free Cash Flow (TTM)
Free Cash Flow: $1.40 Billion
FCF/EV Yield
FCF/EV Yield: 12%
Other Indicators
Piotroski F-Score: 7
Altman Z-Score: 5.3
Beneish M-Score: -2.56
Shareholder Yield
Shareholder Yield: 27%
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