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 Communications & Networking 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 Communications & Networking 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.

Click the button below to learn more about A+ Investor and subscribe today.

6 Undervalued Communications & Networking 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 Communications & Networking industry for Wednesday, February 28, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Communications & Networking 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.

Amplitech Group Inc’s Value Grade

Value Grade:

AmpliTech Group, Inc. is engaged in designing, engineering, and assembling micro-wave component-based amplifiers. The Company's products consist of radio frequency (RF) amplifiers and related subsystems, operating at multiple frequencies from 50 kilohertz (kHz) to 44 gigahertz (GHz), including low noise amplifiers, medium power amplifiers, cryogenic amplifiers, and custom assembly designs for the global satellite communications, telecom (5G & IoT), space, defense, and quantum computing markets. The Company also offers non-recurring engineering services on a project-by-project basis. Its Specialty division Microwave designs and manufactures satellite communication (SATCOM) microwave components, RF subsystems, specialized electronic assemblies for the military and commercial markets, flexible and rugged waveguides, and waveguide adapters. The Company?s AmpliTech Group MMIC Design Center (AGMDC) division designs, develops, and manufactures signal processing components for satellites.

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.

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

When you look at Amplitech Group Inc’s price-to-sales ratio at 1.15 compared to the industry median at 1.19, this company has a lower price relative to revenue compared to its peers. This could make Amplitech Group 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. Amplitech Group Inc’s shareholder yield is higher than its industry median ratio of (0.57%). 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. Amplitech Group Inc’s price-to-book ratio is lower than its industry median ratio of 1.77. This could make Amplitech Group Inc more attractive to investors looking for a new addition to their portfolio.

Cambium Networks Corp’s Value Grade

Value Grade:

Cambium Networks Corporation is a technology company. The Company designs, develops, and manufactures wireless broadband and Wi-Fi networking infrastructure solutions for a range of applications, including broadband access, wireless backhaul, Industrial Internet of Things (IIoT), public safety communications and Wi-Fi access. The Company?s products are used by businesses, governments, and service providers to build, expand and upgrade broadband networks. Its wireless fabric includes intelligent radios, smart antennas, radio frequency, algorithms, wireless-aware switches, and its on-premise or cloud-based network management software. It provides solutions, such as closed-circuit television (CCTV) backhaul, enterprise networking, hybrid networks, outdoor wireless for private networks, and small cell backhaul. Its Wi-Fi portfolio includes cnPilot cloud-managed Wi-Fi solutions; cnMatrix cloud-managed wireless-aware switching solutions; Xirrus Wi-Fi solutions, and Xirrus XMS management.

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.

Cambium Networks Corp has a Value Score of 68, which is considered to be undervalued.

Cambium Networks Corp’s price-to-book ratio is higher than its peers. This could make Cambium Networks Corp less attractive for value investors when compared to the industry median at 1.77.

You can read more about Cambium Networks 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.

Franklin Wireless Corp’s Value Grade

Value Grade:

Franklin Wireless Corp. is a provider of integrated wireless solutions utilizing the latest in fourth generation long-term evolution (4G LTE) and fifth generation (5G) technologies, including mobile hotspots, routers, customer premise equipment (CPEs) and various trackers. The Company’s integrated software subscription services provide users remote capabilities, including mobile device management (MDM) and software defined wide area networking (SD-WAN). Its subsidiary, Franklin Technology Inc. (FTI), is a research and development company, which provides design and development services to wireless products. The Company distributes its products across North America, the Caribbean and South America, and Asia.

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.

Franklin Wireless Corp has a Value Score of 72, which is considered to be undervalued.

Franklin Wireless Corp’s price-to-book ratio is higher than its peers. This could make Franklin Wireless Corp less attractive for value investors when compared to the industry median at 1.77.

You can read more about Franklin Wireless 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.

Gilat Satellite Networks Ltd.’s Value Grade

Value Grade:

Gilat Satellite Networks Ltd. is an Israel-based provider of satellite-based broadband communications. The Company operates through three segments: Commercial, Mobility, and Services divisions. The Company designs and manufactures satellite ground segment and networking communications equipment, which it sells to its customers either as network components (modems, Block Up converters (BUCs), antennas) or as complete network solutions (which include hubs and related terminals and services) or turnkey projects. The equipment that the Company develops includes commercial Very Small Aperture Terminals (VSAT) systems, defense and homeland security satellite communications systems, solid-state power amplifiers (SSPAs), BUCs, low-profile antennas, on-the-move/on-the-pause terminals, and modems. The Company's equipment is used by satellite operators, service providers, telecommunications operators, system integrators, government and defense organizations, large corporations, and enterprises.

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.

Gilat Satellite Networks Ltd. has a Value Score of 61, which is considered to be undervalued.

Gilat Satellite Networks Ltd.’s price-earnings ratio is 23.8 compared to the industry median at 22.8. This means that it has a higher price relative to its earnings compared to its peers. This makes Gilat Satellite Networks Ltd. less attractive for value investors.

Gilat Satellite Networks Ltd.’s price-to-book ratio is higher than its peers. This could make Gilat Satellite Networks Ltd. less attractive for value investors when compared to the industry median at 1.77.

You can read more about Gilat Satellite Networks Ltd.’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.

NetGear Inc’s Value Grade

Value Grade:

NETGEAR, Inc. is engaged in providing networking technologies and Internet-connected products for consumers, businesses and service providers. The Company operates through two segments: Connected Home, and NETGEAR for Business. The Connected Home segment focuses on consumers and provides high-performance, dependable and easy-to-use premium WiFi networking solutions such as WiFi 6, WiFi 6E and WiFi 7 Tri-band and Quad-band mesh systems and routers, 4G/5G mobile products, smart devices such as Meural digital displays, and subscription services that provide consumers a range of value-added services. The NETGEAR for Business segment focuses on businesses and provides solutions for business networking, wireless local area network (LAN), audio and video over Ethernet for Pro AV applications, security and remote management. The Company conducts business across three geographic territories: the Americas; Europe, Middle East and Africa (EMEA), and Asia Pacific (APAC).

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.

NetGear Inc has a Value Score of 75, which is considered to be undervalued.

NetGear Inc’s price-to-book ratio is higher than its peers. This could make NetGear Inc less attractive for value investors when compared to the industry median at 1.77.

You can read more about NetGear 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.

George Risk Industries Inc’s Value Grade

Value Grade:

George Risk Industries, Inc. is a manufacturer of electronic components. The Company is engaged in the designing, manufacturing, and sale of custom computer keyboards, proximity switches, security alarm components and systems, pool access alarms, EZ Duct wire covers, water sensors, electronic switching devices, high security switches and wire and cable installation tools. Its segments include security alarm products, cable & wiring tools and other products. It also designs and manufactures a range of professional specialty tools for wire and cable installation, which include installation, staging, vision and testing tools; drilling and cutting tools; specialty wire running, pushing and pulling systems; FiberFuse Wire Running Rods & Kits, and spanning and retrieval tools. Its security products are used in alarm system installations in the residential, commercial, industrial, and government sectors. Its specialty services include private labeling and custom manufacturing 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.

George Risk Industries Inc has a Value Score of 63, which is considered to be undervalued.

George Risk Industries Inc’s price-earnings ratio is 11.4 compared to the industry median at 22.8. This means that it has a lower price relative to its earnings compared to its peers. This makes George Risk Industries Inc more attractive for value investors.

George Risk Industries Inc’s price-to-book ratio is higher than its peers. This could make George Risk Industries Inc less attractive for value investors when compared to the industry median at 1.77.

You can read more about George Risk Industries 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 Communications & Networking 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 Communications & Networking stocks as well as other industrys.

Choosing Which of the 6 Best Communications & Networking 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.

• Amplitech Group Inc stock has a Value Grade of B.
• Cambium Networks Corp stock has a Value Grade of B.
• Franklin Wireless Corp stock has a Value Grade of B.
• Gilat Satellite Networks Ltd. stock has a Value Grade of B.
• NetGear Inc stock has a Value Grade of B.
• George Risk Industries Inc stock has a Value Grade of B.

Now that you have a bit more background about each of the 6 undervalued stocks in the Communications & Networking 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 Communications & Networking Stocks

Want to learn more about Communications & Networking 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 Communications & Networking Stocks for Wednesday, February 28
• 3 Undervalued Communications & Networking Stocks for Tuesday, February 27
• Why Viasat Inc’s (VSAT) Stock Is Up 4.32%
• 5 Undervalued Communications & Networking Stocks for Monday, February 26

AAII Disclaimer

We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith and we accept no liability for any errors or omissions. The full disclaimer can be read here.