Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 3 stocks made the list for top value stocks in the Advertising & Marketing 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.

Latest Advertising & Marketing Stock News

Before choosing which top Advertising & Marketing stock to buy, be sure to conduct proper due diligence: analyze various financial metrics and look at historical data, public statements and news coverage.

The outlook for the advertising subindustry is neutral. There are growth prospects, supported by exposure to emerging market consumers and enhanced digital capabilities on new advertising technologies for data and analytics. However, global economic outlook has been significantly hampered by the global pandemic, precipitating a U.S. (and global) economic recession and some likely pullback of discretionary spending by several marketers. This provides potential for a revenue shortfall in the U.S. and some international markets. With growing share of advertising spending shifting toward the internet and other digital platforms. Despite the decline in traditional ratings, television advertising will likely continue to garner the bulk of the overall spending, thanks in part to marketers looking for mass audiences. In 2020, the S&P Advertising subindustry Index fell 11.5% versus a 15.8% increase for the S&P Composite 1500 Index.

Why Focus on Undervalued Advertising & Marketing 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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3 Undervalued Advertising & Marketing Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 3 undervalued stocks in the Advertising & Marketing industry for Friday, February 02, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Advertising & Marketing 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.

Autohome Inc (ADR)’s Value Grade

Value Grade:

Autohome Inc is a holding company mainly provides online destination for automobile consumers. It is engaged in the provision of online advertising and dealer subscription services. It, through its Websites, autohome.com.cn and che168.com, delivers content to automobile buyers and owners. Media services provide with marketing solutions in connection with brand promotion, new model release and sales promotion. Leads generation services enable dealer subscribers to create their own online stores, list pricing and promotional information, provide dealer contact information, place advertisements and manage customer relationships. Online marketplace and others focus on providing facilitation services and other platform-based services for new and used car transactions. It also provides services to its cooperative financial institutions that involve facilitating the sale of their loans and insurance products. The Company mainly conducts its businesses in the China market.

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.

Autohome Inc (ADR) has a Value Score of 62, which is considered to be undervalued.

When you look at Autohome Inc (ADR)’s price-to-sales ratio at 3.04 compared to the industry median at 1.02, this company has a higher price relative to revenue compared to its peers. This could make Autohome Inc (ADR)’s stock less attractive for value investors.

Autohome Inc (ADR)’s price-earnings ratio is 10.83 compared to the industry median at 15.85. This means it has a lower share price relative to earnings compared to its peers. This could make Autohome Inc (ADR) more attractive for value investors.

Now, let’s assess Autohome Inc (ADR)’s EV/EBITDA ratio, also known as enterprise multiple. At 20.5, when compared to the industry median of 7.4, the company may be considered overvalued 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. Autohome Inc (ADR)’s shareholder yield is higher than its industry median ratio of (1.57%). 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. Autohome Inc (ADR)’s price-to-book ratio is lower than its industry median ratio of 1.24. This could make Autohome Inc (ADR) more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Autohome Inc (ADR)’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Autohome Inc (ADR)’s price-to-free-cash-flow ratio is lower than its industry median ratio of 14.63. This could make Autohome Inc (ADR) more attractive because the lower P/FCF ratio indicates that Autohome Inc (ADR) 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.

Harte Hanks Inc’s Value Grade

Value Grade:

Harte Hanks, Inc. is a customer experience company. The Company operates through three business segments: Marketing Services, Customer Care, and Fulfillment & Logistics Services. The Marketing Services segment provides full-service multi-channel marketing from strategy to campaign execution. The Customer Care segment offers solutions that help its clients enhance the experience for their customers and improve business. Those solutions are primarily focused on: customer experience management, customer relationship management (CRM) and digital transformation, demand generation, and inside sales. The Fulfillment & Logistics Services segment offers varied product and mail fulfillment solutions including printing on demand, managing product recalls, and distributing literature and promotional products. It also provides third-party logistics and freight optimization services across the United 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.

Harte Hanks Inc has a Value Score of 87, which is considered to be undervalued.

Harte Hanks Inc’s price-earnings ratio is 2.5 compared to the industry median at 15.8. This means that it has a lower price relative to its earnings compared to its peers. This makes Harte Hanks Inc more attractive for value investors.

Harte Hanks Inc’s price-to-book ratio is lower than its peers. This could make Harte Hanks Inc more attractive for value investors when compared to the industry median at 1.24.

You can read more about Harte Hanks 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.

illumin Holdings Inc’s Value Grade

Value Grade:

illumin Holdings Inc. provides a journey advertising platform, which enables marketers to reach consumers at every stage of their journey by leveraging advanced machine learning algorithms and real-time data analytics. It enables marketers to connect intelligently with audiences across video, mobile, social and online display advertising campaigns. Its Programmatic Marketing Platform, powered by machine learning technology, is at the core of its business, accompanied by patented solutions for analytics-led video and mobile targeting that leverages data. It enables marketers by offering near real-time reporting and analytics, bringing accountability to programmatic advertising to deliver business results and help solve the challenges that digital advertisers face. Its illumin software enables creation of consumer journeys with custom messages tied to the propensity-scored audience. Its customers include both agencies and brands, including enterprises and small to mid-sized businesses.

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.

illumin Holdings Inc has a Value Score of 83, which is considered to be undervalued.

illumin Holdings Inc’s price-to-book ratio is higher than its peers. This could make illumin Holdings Inc less attractive for value investors when compared to the industry median at 1.24.

You can read more about illumin Holdings 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.

Other Advertising & Marketing 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 Advertising & Marketing stocks as well as other industrys.

Choosing Which of the 3 Best Advertising & Marketing 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.

• Autohome Inc (ADR) stock has a Value Grade of B.
• Harte Hanks Inc stock has a Value Grade of A.
• illumin Holdings Inc stock has a Value Grade of A.

Now that you have a bit more background about each of the 3 undervalued stocks in the Advertising & Marketing 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 Advertising & Marketing Stocks

Want to learn more about Advertising & Marketing 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.

• 3 Undervalued Advertising & Marketing Stocks for Friday, February 02
• 3 Undervalued Advertising & Marketing Stocks for Thursday, February 01
• 3 Undervalued Advertising & Marketing Stocks for Wednesday, January 31
• Why Cardlytics Inc’s (CDLX) Stock Is Down 4.98%

AAII Disclaimer

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