Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 5 stocks made the list for top value stocks in the Electronic Equipment & Parts 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 Electronic Equipment & Parts Stock News

Before choosing which top Electronic Equipment & Parts 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 Electronic Equipment & Parts sub-industry outlook is neutral. The Purchasing Managers Index (PMI) is often used to gauge the manufacturing sector of the economy. A PMI score over 50 represents expansion, while 50 represents neutral, and under 50 contraction or decline in business. As of July 2021, the PMI score according to the Institute for Supply Management (ISM) was 59.5, a 1.8% decline over the score in June. While this indicates an expanding manufacturing market, the PMI score has declined over the previous three months. While manufacturing has increased since the heights of the pandemic, we are starting to see a slight decline in the demand. However, demand for electronic equipment has some prospects. Increased demand for automotive, computers, and other electronic goods is often associated with times of economic prosperity and consumer spending. Electronic equipment & parts are associated with nearly every other sub-industry, so it is hard to imagine long term that revenues will stay suppressed.

Why Focus on Undervalued Electronic Equipment & Parts 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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5 Undervalued Electronic Equipment & Parts Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 5 undervalued stocks in the Electronic Equipment & Parts industry for Monday, February 12, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Electronic Equipment & Parts 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.

Alliance Entertainment Holding Corp’s Value Grade

Value Grade:

Alliance Entertainment Holding Corporation is a distributor and wholesaler of stock selection of music, movies, video games, electronics, arcades, and collectibles. The Company offers 485,000 in stock keeping unit (SKUs), including over 57,300 exclusive compact discs, vinyl LP records, digital optical disc (DVDs), Blu-rays, and video games. The Company offers integrated services, and end-to-end e-commerce solutions. The Company provides a range of consumer electronics and accessories from the brands, such as Vinyl Styl, Audio-Technica, TEAC, Stanton, Numark, Ion, Jensen, Thorens, and Music Hall. The Company offers a range of assortment of headphones, speakers, mixers, amplifiers, audio and video cables, cellphone accessories, and carrying cases. Its brands include AMPED Distribution, COKeM International, Mill Creek Entertainment, NCircle Entertainment, and Vinyl Styl.

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.

Alliance Entertainment Holding Corp has a Value Score of 94, which is considered to be undervalued.

When you look at Alliance Entertainment Holding Corp’s price-to-sales ratio at 0.08 compared to the industry median at 1.46, this company has a lower price relative to revenue compared to its peers. This could make Alliance Entertainment Holding Corp’s stock more attractive for value investors.

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. Alliance Entertainment Holding Corp’s shareholder yield is higher than its industry median ratio of (0.92%). 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. Alliance Entertainment Holding Corp’s price-to-book ratio is lower than its industry median ratio of 1.37. This could make Alliance Entertainment Holding Corp more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Alliance Entertainment Holding Corp’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Alliance Entertainment Holding Corp’s price-to-free-cash-flow ratio is lower than its industry median ratio of 24.87. This could make Alliance Entertainment Holding Corp more attractive because the lower P/FCF ratio indicates that Alliance Entertainment Holding Corp 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.

Celestica Inc’s Value Grade

Value Grade:

Celestica Inc. is engaged in designing, manufacturing, hardware platform and supply chain solutions. The Company operates in two segments: Advanced Technology Solutions (ATS) and Connectivity & Cloud Solutions (CCS). The ATS segment consists of its ATS end market and is comprised of its Aerospace & Defense (A&D;), Industrial, HealthTech, and Capital Equipment businesses. Its Capital Equipment business is comprised of its semiconductor, display, and robotics equipment businesses. The CCS segment consists of its communications and enterprise end markets. The enterprise end market is comprised of Celestica’s servers and storage businesses. It offers a range of product manufacturing and related supply chain services to customers in both of its segments, including design and development, new product introduction, engineering services, component sourcing, electronics manufacturing and assembly, testing, complex mechanical assembly, systems integration, precision machining and others.

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.

Celestica Inc has a Value Score of 61, which is considered to be undervalued.

Celestica Inc’s price-earnings ratio is 19.0 compared to the industry median at 21.7. This means that it has a lower price relative to its earnings compared to its peers. This makes Celestica Inc more attractive for value investors.

Celestica Inc’s price-to-book ratio is lower than its peers. This could make Celestica Inc more attractive for value investors when compared to the industry median at 1.37.

You can read more about Celestica 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.

Sanmina Corp’s Value Grade

Value Grade:

Sanmina Corporation is a provider of integrated manufacturing solutions, components, products and repair, logistics and after-market services. The Company provides these offerings primarily to original equipment manufacturers (OEMs), in industries, such as industrial, medical, defense and aerospace, automotive, communications networks and cloud infrastructure. The Company's operations are managed as two businesses: Integrated Manufacturing Solutions (IMS) and Components, Products and Services (CPS). IMS business consists of printed circuit board assembly and test, high-level assembly and test and direct-order-fulfillment. Its CPS components include printed circuit boards, backplanes and backplane assemblies, cable assemblies, fabricated metal parts, precision machined parts, and plastic-injected molded parts. Its products include memory solutions, high-performance storage platforms, optical, radio frequency (RF) and microelectronic (microE) design and manufacturing services and others.

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.

Sanmina Corp has a Value Score of 82, which is considered to be undervalued.

Sanmina Corp’s price-earnings ratio is 13.1 compared to the industry median at 21.7. This means that it has a lower price relative to its earnings compared to its peers. This makes Sanmina Corp more attractive for value investors.

Sanmina Corp’s price-to-book ratio is lower than its peers. This could make Sanmina Corp more attractive for value investors when compared to the industry median at 1.37.

You can read more about Sanmina Corp’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.

Sensata Technologies Holding PLC’s Value Grade

Value Grade:

Sensata Technologies Holding plc is an industrial technology company that develops sensors, sensor-based solutions, including controllers and software, and other products that are used in various systems and applications. The Company's segments include Performance Sensing and Sensing Solutions. The Performance Sensing segment serves the automotive and heavy vehicle and off-road (HVOR) industries through its development and manufacture of sensors, high-voltage solutions (electrical protection components), and other solutions. The Sensing Solutions segment serves the industrial and aerospace industries through development and manufacture of a portfolio of application specific sensor and electrical protection products used in a range of industrial markets, including the appliance; heating, ventilation, and air conditioning (HVAC); semiconductor; and charging infrastructure markets as well as the aerospace market. It also provides various energy storage and power conversion solutions.

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.

Sensata Technologies Holding PLC has a Value Score of 68, which is considered to be undervalued.

Sensata Technologies Holding PLC’s price-to-book ratio is lower than its peers. This could make Sensata Technologies Holding PLC more attractive for value investors when compared to the industry median at 1.37.

You can read more about Sensata Technologies Holding PLC’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.

Velo3D Inc’s Value Grade

Value Grade:

Velo3D, Inc. is a metal three-dimensional (3D) printing technology company. The Company produces a fully integrated hardware and software solution based on its laser powder bed fusion (L-PBF) technology. Its technology enables the production of complex, mission-critical parts that existing additive manufacturing (AM) solutions cannot produce without the need for redesign or additional assembly. Its Sapphire family of systems (3D Printers) give its customers who are in space, aviation, defense, automotive, energy and industrial markets the freedom to design and produce metal parts with complex internal features. Its end-to-end solution includes the flow print preparation software, the Sapphire family of printers, and the Assure quality control system, all of which are powered by its Intelligent Fusion manufacturing process. Its customers are primarily original equipment manufacturers and contract manufacturers who look to AM to solve issues with metal parts manufacturing technologies.

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.

Velo3D Inc has a Value Score of 73, which is considered to be undervalued.

Velo3D Inc’s price-to-book ratio is higher than its peers. This could make Velo3D Inc less attractive for value investors when compared to the industry median at 1.37.

You can read more about Velo3D 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 Electronic Equipment & Parts 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 Electronic Equipment & Parts stocks as well as other industrys.

Choosing Which of the 5 Best Electronic Equipment & Parts 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.

• Alliance Entertainment Holding Corp stock has a Value Grade of A.
• Celestica Inc stock has a Value Grade of B.
• Sanmina Corp stock has a Value Grade of A.
• Sensata Technologies Holding PLC stock has a Value Grade of B.
• Velo3D Inc stock has a Value Grade of B.

Now that you have a bit more background about each of the 5 undervalued stocks in the Electronic Equipment & Parts 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 Electronic Equipment & Parts Stocks

Want to learn more about Electronic Equipment & Parts 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.

• 5 Undervalued Electronic Equipment & Parts Stocks for Monday, February 12
• 4 Undervalued Electronic Equipment & Parts Stocks for Friday, February 09
• Why Applied Optoelectronics Inc’s (AAOI) Stock Is Up 6.03%
• Why Fabrinet’s (FN) Stock Is Up 4.33%

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