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 Auto, Truck & Motorcycle 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.

Why Focus on Undervalued Auto, Truck & Motorcycle 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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6 Undervalued Auto, Truck & Motorcycle Parts 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 Auto, Truck & Motorcycle Parts industry for Friday, March 08, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Auto, Truck & Motorcycle 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.

American Axle & Manufacturing Hldngs Inc’s Value Grade

Value Grade:

American Axle & Manufacturing Holdings, Inc. is an automotive and mobility supplier. The Company designs, engineers and manufactures driveline and metal forming technologies to support electric, hybrid and internal combustion vehicles. The Company operates through two segments: Driveline and Metal Forming. Driveline products consist primarily of front and rear axles, driveshafts, differential assemblies, clutch modules, balance shaft systems, disconnecting driveline technology, and electric and hybrid driveline products and systems for light trucks, sport utility vehicles (SUVs), crossover utility vehicles (CUVs), passenger cars and commercial vehicles. Its Metal Forming products consist primarily of engine, transmission, driveline and safety-critical components for traditional internal combustion engine and electric vehicle architectures including light vehicles, commercial vehicles, and off-highway vehicles, as well as products for industrial 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.

American Axle & Manufacturing Hldngs Inc has a Value Score of 86, which is considered to be undervalued.

When you look at American Axle & Manufacturing Hldngs Inc’s price-to-sales ratio at 0.13 compared to the industry median at 0.53, this company has a lower price relative to revenue compared to its peers. This could make American Axle & Manufacturing Hldngs Inc’s stock more attractive for value investors.

Now, let’s assess American Axle & Manufacturing Hldngs Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 5.0, when compared to the industry median of 7.4, 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. American Axle & Manufacturing Hldngs 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. American Axle & Manufacturing Hldngs Inc’s price-to-book ratio is lower than its industry median ratio of 1.42. This could make American Axle & Manufacturing Hldngs Inc more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at American Axle & Manufacturing Hldngs Inc’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. American Axle & Manufacturing Hldngs Inc’s price-to-free-cash-flow ratio is lower than its industry median ratio of 16.43. This could make American Axle & Manufacturing Hldngs Inc more attractive because the lower P/FCF ratio indicates that American Axle & Manufacturing Hldngs 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.

Cooper-Standard Holdings Inc’s Value Grade

Value Grade:

Cooper-Standard Holdings Inc. is a manufacturer of sealing and fluid handling systems (consisting of fuel and brake delivery and fluid transfer systems). Its products are primarily for use in passenger vehicles and light trucks that are manufactured by global automotive original equipment manufacturers (OEMs) and replacement markets. It operates through four segments: North America, Europe, Asia Pacific, and South America. The Company’s product lines include sealing systems and fluid handling systems (consisting of fuel and brake delivery and fluid transfer systems). The Company's brands include FlushSeal, Gen III Posi-Lock, Easy-Lock, MagAlloy, Ergo-Lock +, PlastiCool and Fortrex. FlushSeal is an advanced integrated solution for frame under glass static sealing systems. Its Easy-Lock is a small package coolant and fuel vapor quick connect. Its MagAlloy is a processing technology for brake lines that increases long term durability through superior corrosion resistance.

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.

Cooper-Standard Holdings Inc has a Value Score of 86, which is considered to be undervalued.

You can read more about Cooper-Standard 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.

Continental AG (ADR)’s Value Grade

Value Grade:

Continental AG is a Germany-based company offering mobility solutions to automotive sector. The Company operates in four group sectors: Automotive, Tires, ContiTech and Contract Manufacturing. Automotive sector comprises technologies for passive safety, brake, chassis, motion and motion control systems. The sector is further divided into five business areas: Architecture and Networking, Autonomous Mobility, Safety and Motion, Smart Mobility and User Experience. Tires sector offers digital monitoring and tire management systems and other services. It is divided into Original Equipment, Replacement APAC, Replacement EMEA, Replacement The Americas and Specialty Tires business areas. ContiTech group sector develops and manufactures cross-material, environmentally friendly and intelligent products, and systems. It is divided into six business areas. Contract Manufacturing segment handles contract manufacturing for Vitesco Technologies and includes one business area.

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.

Continental AG (ADR) has a Value Score of 93, which is considered to be undervalued.

Continental AG (ADR)’s price-earnings ratio is 12.3 compared to the industry median at 15.7. This means that it has a lower price relative to its earnings compared to its peers. This makes Continental AG (ADR) more attractive for value investors.

Continental AG (ADR)’s price-to-book ratio is higher than its peers. This could make Continental AG (ADR) less attractive for value investors when compared to the industry median at 1.42.

You can read more about Continental AG (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.

Miller Industries Inc’s Value Grade

Value Grade:

Miller Industries, Inc. is a manufacturer of towing and recovery equipment. The Company is engaged in the manufacturing of the bodies of wreckers and car carriers, which are installed on truck chassis manufactured by third parties. It purchases the truck chassis for integration with its towing and recovery equipment and then resale to its customers. It manufactures a line of wreckers, car carriers and transport trailers products. The Company's products brands include Century, Challenger, Holmes, Champion, Eagle, Titan, Jige, Boniface, Vulcan and Chevron. Its products are sold through independent distributors that serves Canada and Mexico, and other foreign markets, including Europe, the Pacific Rim, the Middle East, South America and Africa, and through prime contractors to governmental entities. It also specializes in the manufacture and supply of custom-built, welded hydraulic cylinders for various industries. Its domestic manufacturing operations are in Tennessee and Pennsylvania.

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.

Miller Industries Inc has a Value Score of 79, which is considered to be undervalued.

Miller Industries Inc’s price-earnings ratio is 11.3 compared to the industry median at 15.7. This means that it has a lower price relative to its earnings compared to its peers. This makes Miller Industries Inc more attractive for value investors.

Miller Industries Inc’s price-to-book ratio is lower than its peers. This could make Miller Industries Inc more attractive for value investors when compared to the industry median at 1.42.

You can read more about Miller 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.

Tytan Cybernetics Inc’s Value Grade

Value Grade:

Tytan Cybernetics, Inc., formerly Video River Networks, Inc., is a holding company for electric vehicle technology, financial technology, artificial intelligence, robotics, drones and distressed assets. The Company is engaged in expanding its technology portfolio, which includes electric vehicles, artificial intelligence, machine learning and robotics (EV-AI-ML-R), with businesses and operations in North America and Asia. The Company is also focused on business opportunities within financial technology, artificial intelligence, health, sports and entertainment industries.

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.

Tytan Cybernetics Inc has a Value Score of 86, which is considered to be undervalued.

Tytan Cybernetics Inc’s price-to-book ratio is higher than its peers. This could make Tytan Cybernetics Inc less attractive for value investors when compared to the industry median at 1.42.

You can read more about Tytan Cybernetics 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.

Strattec Security Corp’s Value Grade

Value Grade:

Strattec Security Corporation designs, develops, manufactures and markets automotive access control products. The Company’s products include mechanical locks and keys, electronically enhanced locks and keys, passive entry passive start systems (PEPS), steering column and instrument panel ignition lock housings, latches, power sliding side door systems, power tailgate systems, power lift gate systems, power deck lid systems, door handles, and related products. The Company provides its products primarily to North American automotive customers. The Company’s products and solutions portfolio includes Vehicle Access Solutions, Electronic Security Solutions, Vehicle Security Solutions, Dealer Direct Fulfillment Services, Aftermarket, BOLT and STRATTEC Advance Logic-Via GoKeyless. Its products are shipped to customer locations in the United States, Canada, Mexico, Europe, South America, Korea, China and 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.

Strattec Security Corp has a Value Score of 64, which is considered to be undervalued.

Strattec Security Corp’s price-earnings ratio is 583.7 compared to the industry median at 15.7. This means that it has a higher price relative to its earnings compared to its peers. This makes Strattec Security Corp less attractive for value investors.

Strattec Security Corp’s price-to-book ratio is higher than its peers. This could make Strattec Security Corp less attractive for value investors when compared to the industry median at 1.42.

You can read more about Strattec Security 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.

Other Auto, Truck & Motorcycle 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 Auto, Truck & Motorcycle Parts stocks as well as other industrys.

Choosing Which of the 6 Best Auto, Truck & Motorcycle 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.

• American Axle & Manufacturing Hldngs Inc stock has a Value Grade of A.
• Cooper-Standard Holdings Inc stock has a Value Grade of A.
• Continental AG (ADR) stock has a Value Grade of A.
• Miller Industries Inc stock has a Value Grade of B.
• Tytan Cybernetics Inc stock has a Value Grade of A.
• Strattec Security Corp stock has a Value Grade of B.

Now that you have a bit more background about each of the 6 undervalued stocks in the Auto, Truck & Motorcycle 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 Auto, Truck & Motorcycle Parts Stocks

Want to learn more about Auto, Truck & Motorcycle 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.

• 6 Undervalued Auto, Truck & Motorcycle Parts Stocks for Friday, March 08
• 7 Undervalued Auto, Truck & Motorcycle Parts Stocks for Thursday, March 07
• Why Atmus Filtration Technologies Inc’s (ATMU) Stock Is Up 4.32%
• Why Titan International Inc’s (TWI) Stock Is Up 4.75%

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