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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Penske Automotive Group, Inc. (XNYS:PAG) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
PAG
Name:
PENSKE AUTOMOTIVE GROUP, INC. (XNYS:PAG)
Sector:
324.40M
Industry:
Auto & Truck Dealerships
CEO:
Mr. Roger Penske
Total Employees:
25,000
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 155.38% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF PENSKE AUTOMOTIVE GROUP, INC.(PAG) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND AUTO & TRUCK DEALERSHIPS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
114.62
One Month Price Target:
$115.4
Six Month Price Target :
$119.27
Likely Price in One Year's Time:
Ticker:
$123.92
Likely Trading Range Today Under (Normal Volatility)
$114.19
Price Upper limit ($) :
$115.42
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$107.36
This week:
$98.39
This month :
$82.16
Other Primary facts
Market Cap:
8.15B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
74.20M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.9%
-20.61%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$148.26
$132.54
$80.98
$96.70
Medium risk (<10%) entry points
Buy Call
Sell Call
$127.42
Buy Put:
Sell Put:
$124.07
$101.78
$105.17
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
PAG
Sharpe Ratio:
4.93%
Comparison:
PAG, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 77.79% higher than the industry
& ratio is 116.51% higher than the market/S&P 500 average
Average Returns/Yield of
PAG
Daily returns:
0.16%
Weekly returns:
0.82%
Monthly returns:
3.30%
Yearly returns:
30.75%
Comparison of returns:
Average annual returns/yield (last 3 years) is 28.75% above industry average
Classification:
PAG, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.98
Statistical test of Returns:
PAG has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.16%
Weekly Volatility:
7.07%
Monthly Volatility:
14.15%
Yearly Volatility:
49.01%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.43%
Volatility in last five trading days has been -86.39% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.33%
Weekly VaR:
-14.16%
Monthly VaR:
-28.32%
How Much Can the price of
PAG
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-23%
Worst case (decline):
>85%
This translates to price declining to:
$88.09
This translates to price declining to:
$17.19
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
PAG is a 99.88% riskier investment compared to the market/S&P 500 & is 71.24% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -22.76% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
PAG
Beta in relation to market/S&P 500--1.21
Expected beta in 1 year's time:
0.719
Expected beta in 3 year's time:
1.017
Unlevered (debt free) Beta:
0.719
Beta in relation to Nasdaq (XNAS):
0.892
Beta in relation to all global stocks::
0.825
Beta Comparison & Analysis
Beta of competitors/peers::
1.617
Beta is -25.32% lower than peers
Average Industry Beta:
1.468
Beta is -17.71% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
26.38%
Sustainable growth rate is 13.08% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.282
Alpha is 60.53% above industry average alpha yield
Alpha is 1793% higher than market/& is unsustainably high
Analysis of Cost of Capital of
PAG
Equity cost of capital:
0.114
Equity cost of capital is -13.48% below industry mean WACC
Unlevered (without debt) cost of capital:
6.80%
Before-tax cost of debt:
1.42%
After-tax cost of debt:
1.12%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.12%
WACC is -12.20% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$360.59
Revenue growth rate per share of (3Y):
2.04
Annual revenue growth rate is -75.00% below industry average
EPS:
$17.41
Expected Annual growth rate of EPS (3Y):
41.25%
Expected future EPS growth rate is 177.61% higher than the Auto & Truck Dealerships industry
Free cash flow (FCF) per share:
$14.88
Balance sheet equity growth per share: 25.62%
Equity growth rate per share is -32.42% lower than the industry
Debt per share
$51.11
EBITDA per share
$27.88
Valuation Analysis Today of
PAG
P/E Ratio:
6.32
P/E Ratio of Competitors/Peers:
12.91
P/E ratio is -51.03% lower than main peers & is -92.86% lower than the industry
Stock price/value with industry average P/E ratio: $1,541.76
PAG is -92.57% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $40.29
Present value of the expected future dividends only: $21.65
P/S (Price to Sales ratio):
0.32
Price to sales ratio is -58.54% below the industry mean
P/B (Price to book value ratio):
2.04
Price to free cash flow: 7.70
Price to free cash flow ratio is -76.66% lower than the industry
Net income growth rate (3Y):
169.43%
Net income growth rate is 24.55% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 2.65%
Dividend yeild: 1.64%
Previous Dividend: $0.50
Previous adjusted dividend: $0.50
Previous Dividend: $1.88
Expected next dividend best case: $0.53
Expected next dividend worst case: $0.47
Average dividend payment (long-term): $0.44
Average dividend increase/decrease (growth rate) % per period: 2.52%
Expected next dividend payment date: 30/08/2022
Expected next dividend record date: 22/08/2022
Expected next dividend declaration date: 08/10/2022
Previous dividend payment date: 06/01/2022
Previous dividend record date: 23/05/2022
Previous dividend declaration date: 05/12/2022
Dividend History:
2022-05-20--$0.50
2021-11-09--$0.46
2021-05-21--$0.44
2022-02-09--$0.47
2021-08-09--$0.45
2021-02-09--$0.43
Dividend growth rate is -90.27% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
91.63%
Net debt to equity ratio:
151.01%
Debt to assets ratio:
27.75%
Net debt to assets ratio:
45.73%
Debt-to-asset ratio is -54.23% below industry average
Ability to repay debt:
Interest coverage ratio:
22.63
Interest coverage ratio is 463.14% more than industry average
Looking forward:
Debt growth rate:
18.48%
Annual debt growth is -97% lower than industry average debt growth rate
Debt repayment rate in last quarter: 9.95%
Analysis of Key Statistics
Correlation of price movement with the market:
0.634
Statistical significance of correlation:
PAG has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.499
Stock price is 27.20% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.499
Correlation of price movement with Nasdaq (^IXIC):
0.037
Covariance of price movement with the market:
0.068
Kurtosis
7.036
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.321
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
PAG
Gross Profit Margin Ratio:
71%
Operating Profit Margin Ratio:
5.75%
Operating profit margin is 215.50% higher than the industry
Net Profit Margin Ratio:
71%
Effective Tax Rate:
25.83%
Effective tax rate is -5.79% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
33.18%
Return on equity (ROE) is -7289.79% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
10.05%
Return on assets (ROA) is -106.23% lower than the industry
Financial Leverage:
1.4x
Current Ratio:
0.97
Current ratio is -45.41% below industry average
Cash Conversion Cycle (days):
10.6
Cash conversion cycle is -10.82% below industry average
The remaining useful life of property plant & equipment is: 4.9 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
1.1M
Each employee generates 22% more revenue than industry average revenue per employee
EBITDA generated per employee:
82.7K
Each employee generates 28% more EBITDA than industry average revenue per employee
Profit generated per employee:
54.9K
Each employee generates 38% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
13.0K
Each employee generates 2275% more free cash flow than industry average revenue per employee
Assets/Capital per employee
376.0K
Each employee generates 2275% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
PAG
MINISO GROUP HOLDING LIMITED (XNYS:MNSO)
MARRIOTT VACATIONS WORLDWIDE CORPORATION (XNYS:VAC)
BOYD GAMING CORPORATION (XNYS:BYD)
HARLEY-DAVIDSON, INC. (XNYS:HOG)
LEGGETT & PLATT, INCORPORATED (XNYS:LEG)
TEMPUR SEALY INTERNATIONAL, INC. (XNYS:TPX)
HANESBRANDS INC. (XNYS:HBI)
YETI HOLDINGS, INC. (XNYS:YETI)
SKECHERS U.S.A., INC. (XNYS:SKX)
Current Analyst Ratings
Strong buy�17%
Buy�17%
Hold�17%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
26.76B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
22.00B
4.76B
-
2.97B
3.10B
124.60M
124.10M
3.22B
-
91.40M
124.10M
2.07B
1.54B
1.37B
1.86B
479.90M
1.37B
Statement of Cash Flow
Date:
Period:
31.90M
Differed Income Tax :
41.40M
Stock Based Compensation :
-
Change in Working Capital :
57.40M
Accounts Receivables:
- 101100.00K
Other Working Capital:
6.00M
Other Non-Cash Items:
- 119600.00K
Net Cash Provided by Operating Activities:
380.60M
Investments in PP&E:
- 56200.00K
Net Acquisitions:
- 93600.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
170.30M
-
170.30M
835.20M
3.12B
140.40M
4.27B
4.90B
2.16B
661.00M
1.65B
-
40.70M
9.40B
-
13.67B
889.00M
2.63B
-
-
896.50M
4.41B
3.79B
239.00M
5.09B
-
9.50B
-
4.34B
- 198100.0K
-
March 31, 2022 at 6:00:00 AM
25.22B
4.14B
13.64B
-
6.42B
6.2B
-
-
- 149800.00K
- 418900.00K
-
- 119200.00K
- 36400.00K
415.40M
- 159100.00K
- 2100.00K
69.60M
170.30M
100.70M
380.60M
- 56200.00K
324.40M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
PAG
2023
2024
2025
2026
2027
$124.54
$211.56
$228.73
$247.29
$267.36