Critical Contrast: America’s Car-Mart (NASDAQ:CRMT) & Zhongsheng Group (OTCMKTS:ZSHGY)

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

Profitability

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

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

Insider and Institutional Ownership

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

Analyst Ratings

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

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

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

Earnings and Valuation

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

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

Zhongsheng Group has higher earnings, but lower revenue 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.

Summary

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

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.

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.