Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 4 stocks made the list for top value stocks in the Commercial Printing Services industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Why Focus on Undervalued Commercial Printing Services Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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4 Undervalued Commercial Printing Services Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 4 undervalued stocks in the Commercial Printing Services industry for Wednesday, January 03, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Commercial Printing Services industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

ARC Document Solutions Inc’s Value Grade

Value Grade:

ARC Document Solutions, Inc. is a digital printing company. The Company provides digital printing and document-related services to customers in a variety of industries. The Company's primary services include digital printing of general and specialized business documents such as those found in marketing and advertising, engineering and construction and other industries, as well as producing customized display graphics of all types and sizes. The Company is also involved in acquiring, placing and managing office printing equipment with device tracking and print management software at its customers offices and job sites. It provides scanning documents, indexing them and adding digital search features for use in digital document management, document archives and facilities management, as well as providing other digital imaging services. It is also engaged in reselling digital printing equipment and supplies. The Company operates more than 10,500 managed print services.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

ARC Document Solutions Inc has a Value Score of 94, which is considered to be undervalued.

When you look at ARC Document Solutions Inc’s price-to-sales ratio at 0.49 compared to the industry median at 0.66, this company has a lower price relative to revenue compared to its peers. This could make ARC Document Solutions Inc’s stock more attractive for value investors.

ARC Document Solutions Inc’s price-earnings ratio is 12.60 compared to the industry median at 22.04. This means it has a lower share price relative to earnings compared to its peers. This could make ARC Document Solutions Inc more attractive for value investors.

Now, let’s assess ARC Document Solutions Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 4.0, when compared to the industry median of 6.0, the company may be considered undervalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. ARC Document Solutions Inc’s shareholder yield is higher than its industry median ratio of 4.18%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. ARC Document Solutions Inc’s price-to-book ratio is lower than its industry median ratio of 1.62. This could make ARC Document Solutions Inc more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at ARC Document Solutions Inc’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. ARC Document Solutions Inc’s price-to-free-cash-flow ratio is lower than its industry median ratio of 15.47. This could make ARC Document Solutions Inc more attractive because the lower P/FCF ratio indicates that ARC Document Solutions Inc is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

Ennis Inc’s Value Grade

Value Grade:

Ennis, Inc. is engaged in the business of manufacturing, designing and selling business forms and other printed business products, primarily to distributors located in the United States. The Company offers snap sets, continuous forms, laser cut sheets, tags, labels, envelopes, integrated products, jumbo rolls and pressure-sensitive products in short, medium and long runs. The Company?s Adams McClure brand provides point of purchase (POP) advertising; the Admore, Folder Express, and Independent Folders brands provide presentation folders and document folders; Ennis Tag & LabelSM provides custom printed, labels and custom and stock tags; Allen-Bailey Tag & LabelSM, Atlas Tag & Label, Kay Toledo Tag, and Special Service Partners (SSP) provide custom and stock tags and labels; and Trade Envelopes, Block Graphics, Wisco, and National Imprint Corporation provide custom and imprinted envelopes. It operates approximately 54 manufacturing plants throughout the United States in 20 states.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Ennis Inc has a Value Score of 66, which is considered to be undervalued.

Ennis Inc’s price-earnings ratio is 12.9 compared to the industry median at 22.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Ennis Inc more attractive for value investors.

Ennis Inc’s price-to-book ratio is lower than its peers. This could make Ennis Inc more attractive for value investors when compared to the industry median at 1.62.

You can read more about Ennis Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Quad/Graphics Inc’s Value Grade

Value Grade:

Quad/Graphics, Inc. is a global marketing experience company. The Company's United States Print and Related Services segment is comprised of its United States printing operations and integrated platform. The United States Print and Related Services segment includes print execution and logistics for retail inserts, catalogs, long-run publications, special interest publications, journals, direct mail, directories, in-store marketing and promotion, packaging, newspapers, custom print products, as well as other commercial and specialty printed products, and marketing and other complementary services, such as data and analytics, technology solutions, media services, creative and content solutions, managed services and execution in non-print channels. The International segment consists of its printing operations in Europe and Latin America, including operations in England, France, Germany, Poland, Argentina, Colombia, Mexico and Peru, as well as investments in printing operations in India.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Quad/Graphics Inc has a Value Score of 97, which is considered to be undervalued.

Quad/Graphics Inc’s price-to-book ratio is lower than its peers. This could make Quad/Graphics Inc more attractive for value investors when compared to the industry median at 1.62.

You can read more about Quad/Graphics Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

TOPPAN Holdings Inc - ADR’s Value Grade

Value Grade:

TOPPAN Holdings Inc, formerly Toppan Inc, is a Japan-based company mainly engaged in a wide range of business activities across three business fields, including information communication business, lifestyle and industrial business, and electronics business. The Company operates through three segments. The Information Communication Business segment provides general securities, passbooks, cards, business forms, catalogs and other advertising materials, magazines, books and other printed materials, and business process outsourcing (BPO). The Lifestyle and Industrial Business segment provides packaging such as flexible packaging materials and paper cartons, and construction materials such as plastic molded products, inks, transparent barrier films, decorative sheets and wallpaper. The Electronics Business segment provides liquid crystal display (LCD) color filters, thin film transistor (TFT) LCDs, anti-reflection films, photomasks, and semiconductor packaging products.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

TOPPAN Holdings Inc - ADR has a Value Score of 61, which is considered to be undervalued.

TOPPAN Holdings Inc - ADR’s price-earnings ratio is 49.9 compared to the industry median at 22.0. This means that it has a higher price relative to its earnings compared to its peers. This makes TOPPAN Holdings Inc - ADR less attractive for value investors.

TOPPAN Holdings Inc - ADR’s price-to-book ratio is higher than its peers. This could make TOPPAN Holdings Inc - ADR less attractive for value investors when compared to the industry median at 1.62.

You can read more about TOPPAN Holdings Inc - ADR’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Commercial Printing Services Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Commercial Printing Services stocks as well as other industrys.

Choosing Which of the 4 Best Commercial Printing Services Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• ARC Document Solutions Inc stock has a Value Grade of A.
• Ennis Inc stock has a Value Grade of B.
• Quad/Graphics Inc stock has a Value Grade of A.
• TOPPAN Holdings Inc - ADR stock has a Value Grade of B.

Now that you have a bit more background about each of the 4 undervalued stocks in the Commercial Printing Services industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Commercial Printing Services Stocks

Want to learn more about Commercial Printing Services stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 4 Undervalued Commercial Printing Services Stocks for Wednesday, January 03
• What You Need to Know About Deluxe Corporation's Q3 Earnings
• What You Need to Know About Deluxe Corporation's Q3 Earnings
• What You Need to Know About Deluxe Corporation's Q3 Earnings

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