Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 6 stocks made the list for top value stocks in the Food Processing 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 Food Processing 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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6 Undervalued Food Processing Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 6 undervalued stocks in the Food Processing industry for Friday, February 16, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Food Processing 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.

Better Choice Company Inc’s Value Grade

Value Grade:

Better Choice Company Inc. is a pet health and wellness company, which is focused on providing pet products and services. It offers a portfolio of pet health and wellness products for dogs and cats sold under its Halo brand across multiple forms, including foods, treats, toppers, dental products, chews, and supplements. Its products consist of kibble and canned dog and cat food, freeze-dried raw dog food and treats, vegan dog food and treats, oral care products and supplements. It groups channels of trade into four categories: E-commerce, which includes the sale of product to online retailers; Brick & Mortar, which includes the sale of product to Pet Specialty retailers; Direct to Consumer, which includes the sale of product through its Website, and International, which includes the sale of product to foreign distribution partners and to select international retailers. It is also engaged in development of a supplement (treats and toppers) to support weight loss in domestic animals.

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.

Better Choice Company Inc has a Value Score of 83, which is considered to be undervalued.

When you look at Better Choice Company Inc’s price-to-sales ratio at 0.17 compared to the industry median at 0.93, this company has a lower price relative to revenue compared to its peers. This could make Better Choice Company Inc’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. Better Choice Company Inc’s shareholder yield is lower than its industry median ratio of 0.00%. 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. Better Choice Company Inc’s price-to-book ratio is lower than its industry median ratio of 2.06. This could make Better Choice Company Inc more attractive to investors looking for a new addition to their portfolio.

Chanson International Holding’s Value Grade

Value Grade:

Chanson International Holding is a holding company mainly engaged in the manufacturing and sales of a wide selection of bakery products, seasonal products and beverage products. The Company mainly sells products in the PRC (People's Republic of China) Stores and the U.S. (the United States) Stores through the George Chanson, Patisserie Chanson and Chanson brand bakery chains. The PRC Stores mainly offer bakery products, beverage products, and contract third-party manufacturers to produce seasonal products. The U.S. Stores primarily offer bakery products, breakfast, lunch and all-day brunch, bar food, and other light meals, as well as beverage products made within the kitchen in the store. The Company primarily distributes its products in Mainland China and the United States markets.

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.

Chanson International Holding has a Value Score of 79, which is considered to be undervalued.

Chanson International Holding’s price-to-book ratio is higher than its peers. This could make Chanson International Holding less attractive for value investors when compared to the industry median at 2.06.

You can read more about Chanson International Holding’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.

First Pacific Co Ltd (ADR)’s Value Grade

Value Grade:

First Pacific Co Ltd is an investment holding company mainly engaged in the manufacturing and sale of consumer food products. Along with subsidiaries, the Company operates its business in Asia-Pacific through four segments. The Consumer Food Products segment is involved in the production and sale of consumer food products through PT Indofood Sukses Makmur Tbk (Indofood). The Telecommunications segment provides telecommunications services through PLDT Inc. The Infrastructure segment is involved in the infrastructure investment management through Metro Pacific Investments Corporation (MPIC). It is engaged in supply of electricity and water, operation of toll roads, hospital groups, railways and power plants. The Natural Resources segment is involved in the metal mining, and producing gold, copper and silver through Philex Mining Corporation (Philex). In addition, it is also engaged in integrated sugar and ethanol 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.

First Pacific Co Ltd (ADR) has a Value Score of 99, which is considered to be undervalued.

First Pacific Co Ltd (ADR)’s price-earnings ratio is 3.3 compared to the industry median at 19.6. This means that it has a lower price relative to its earnings compared to its peers. This makes First Pacific Co Ltd (ADR) more attractive for value investors.

First Pacific Co Ltd (ADR)’s price-to-book ratio is higher than its peers. This could make First Pacific Co Ltd (ADR) less attractive for value investors when compared to the industry median at 2.06.

You can read more about First Pacific Co Ltd (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.

Golden Growers Cooperative’s Value Grade

Value Grade:

Golden Growers Cooperative (Cooperative) is an agricultural cooperative association. The Cooperative is owned by approximately 1,480 members, which is in the business of providing value to its members by facilitating their delivery of corn to the corn wet-milling facility owned by ProGold Limited Liability Company (ProGold), a Minnesota limited liability company, in which the Cooperative owns a 49% membership interest. The Cooperative membership in ProGold LLC includes a right and obligation for the Cooperative to deliver corn to the ProGold facility for processing. Annually, the Cooperative is required to deliver approximately 15,490,480 bushels of corn to Cargill for processing at the ProGold facility.

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.

Golden Growers Cooperative has a Value Score of 61, which is considered to be undervalued.

Golden Growers Cooperative’s price-earnings ratio is 11.6 compared to the industry median at 19.6. This means that it has a lower price relative to its earnings compared to its peers. This makes Golden Growers Cooperative more attractive for value investors.

Golden Growers Cooperative’s price-to-book ratio is lower than its peers. This could make Golden Growers Cooperative more attractive for value investors when compared to the industry median at 2.06.

You can read more about Golden Growers Cooperative’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.

Laird Superfood Inc’s Value Grade

Value Grade:

Laird Superfood, Inc. and its subsidiary, Picky Bars, LLC is a consumer products platform company. The Company is focused on manufacturing and marketing plant-based and functional foods. It creates plant-based superfood products that are both delicious and functional. The Company’s core Laird Superfood platform includes Creamer coffee creamers, Hydrate hydration products and beverage enhancing supplements, harvest snacks and other food items, and functional roasted and instant coffees, teas, and hot chocolate. Coffee creamers include sales of powdered and liquid coffee creamers. Hydration and beverage enhancing supplements include sales of Hydrate coconut waters, Activate and Renew supplement lines, and mushroom botanical blends. Harvest snacks and other food items include ready to eat food offerings as well as baking and pancake mixes. Coffee, tea, and hot chocolate products include traditional and functional ground and whole bean coffee, and hot chocolate with functional mushroom.

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.

Laird Superfood Inc has a Value Score of 86, which is considered to be undervalued.

Laird Superfood Inc’s price-to-book ratio is higher than its peers. This could make Laird Superfood Inc less attractive for value investors when compared to the industry median at 2.06.

You can read more about Laird Superfood 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.

Medifast Inc’s Value Grade

Value Grade:

Medifast, Inc. (Medifast) is a health and wellness company. The Company sells a variety of weight loss, weight management and healthy living products all based on its proprietary formulas under the OPTAVIA, Optimal Health by Take Shape for Life, and Flavors of Home brands. Medifast?s product line includes more than 65 consumable options, including, but not limited to, bars, bites, pretzels, puffs, cereal crunch, drinks, hearty choices, oatmeal, pancakes, pudding, soft serve, shakes, smoothies, soft bakes, and soups. OPTAVIA coaches also counsel their customers on how to develop healthy habits, such as preparing lean and green meals and choosing healthy snacks. Medifast nutritional products are formulated with high-quality ingredients. Medifast?s wholly owned subsidiaries include Jason Pharmaceuticals, Inc., OPTAVIA, LLC, Jason Enterprises, Inc., Jason Properties, LLC, Seven Crondall Associates, LLC, Corporate Events, Inc., OPTAVIA (Hong Kong) Limited, and OPTAVIA (Singapore) PTE. LTD

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.

Medifast Inc has a Value Score of 88, which is considered to be undervalued.

Medifast Inc’s price-earnings ratio is 4.7 compared to the industry median at 19.6. This means that it has a lower price relative to its earnings compared to its peers. This makes Medifast Inc more attractive for value investors.

Medifast Inc’s price-to-book ratio is lower than its peers. This could make Medifast Inc more attractive for value investors when compared to the industry median at 2.06.

You can read more about Medifast 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 Food Processing 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 Food Processing stocks as well as other industrys.

Choosing Which of the 6 Best Food Processing 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.

• Better Choice Company Inc stock has a Value Grade of A.
• Chanson International Holding stock has a Value Grade of B.
• First Pacific Co Ltd (ADR) stock has a Value Grade of A.
• Golden Growers Cooperative stock has a Value Grade of B.
• Laird Superfood Inc stock has a Value Grade of A.
• Medifast Inc stock has a Value Grade of A.

Now that you have a bit more background about each of the 6 undervalued stocks in the Food Processing 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 Food Processing Stocks

Want to learn more about Food Processing 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.

• 6 Undervalued Food Processing Stocks for Friday, February 16
• 7 Undervalued Food Processing Stocks for Thursday, February 15
• Why Beyond Meat Inc’s (BYND) Stock Is Up 9.01%
• Why Hain Celestial Group Inc’s (HAIN) Stock Is Up 4.15%

AAII Disclaimer

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