Head to Head Review: America’s Car-Mart (NASDAQ:CRMT) & Zhongsheng Group (OTCMKTS:ZSHGY)

America’s Car-Mart (NASDAQ:CRMT) and Zhongsheng Group (OTCMKTS:ZSHGY) are both consumer cyclical companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.

Analyst Ratings

This is a summary of recent recommendations for America’s Car-Mart and Zhongsheng Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
America’s Car-Mart	1	2	0	0	1.67
Zhongsheng Group	0	1	0	0	2.00

America’s Car-Mart presently has a consensus target price of $66.00, suggesting a potential upside of 55.59%. Given America’s Car-Mart’s higher probable upside, equities research analysts clearly believe America’s Car-Mart is more favorable than Zhongsheng Group.

Earnings & Valuation

This table compares America’s Car-Mart and Zhongsheng Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
America’s Car-Mart	$1.37 billion	0.20	-$31.39 million	($4.95)	-8.57
Zhongsheng Group	N/A	N/A	N/A	$5.36	2.15

Zhongsheng Group has lower revenue, but higher earnings than America’s Car-Mart. America’s Car-Mart is trading at a lower price-to-earnings ratio than Zhongsheng Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares America’s Car-Mart and Zhongsheng Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
America’s Car-Mart	-2.66%	-7.75%	-2.45%
Zhongsheng Group	N/A	N/A	N/A

Institutional and Insider Ownership

89.1% of America’s Car-Mart shares are owned by institutional investors. Comparatively, 0.0% of Zhongsheng Group shares are owned by institutional investors. 14.1% of America’s Car-Mart shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Zhongsheng Group beats America’s Car-Mart on 6 of the 10 factors compared between the two stocks.

About America’s Car-Mart

America’s Car-Mart, Inc., through its subsidiaries, operates as an automotive retailer for the used car market in the United States. It primarily sells older model used vehicles and provides financing for its customers. The company was founded in 1981 and is headquartered in Rogers, Arkansas.

About Zhongsheng Group

Zhongsheng Group Holdings Limited, an investment holding company, engages in the sale and service of motor vehicles in the People's Republic of China. The company operates 4S dealerships for various automobile brands consisting of luxury automobile brands, including Mercedes-Benz, Lexus, BMW, Audi, Jaguar Land Rover, Porsche, and Volvo; and mid-to-high end automobile brands, such as Toyota, Honda, and Nissan. It also provides spare parts, automobile accessories, repair and maintenance services, detailing services, and other automobile-related products and services. The company was founded in 1998 and is headquartered in Dalian, the People's Republic of China.