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 Entertainment Production 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 Entertainment Production 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 Entertainment Production 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 Entertainment Production industry for Friday, March 15, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Entertainment Production 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.

CLS Holdings USA Inc’s Value Grade

Value Grade:

CLS Holdings USA, Inc. is a cannabis company that acts as an integrated cannabis producer and retailer through its Oasis Cannabis subsidiaries in Nevada. The Company's brands include City Trees and Oasis Cannabis. It owns 100% of Alternative Solutions, LLC, a holding company that owns three separate entities with licenses to operate cannabis businesses within the State of Nevada: Serenity Wellness Center, LLC doing business as (dba) Oasis Cannabis (Oasis); Serenity Wellness Growers, LLC dba City Trees Fresh Cannabis Cultivation Wholesale; and Serenity Wellness Products, LLC dba City Trees Fresh Cannabis Production Wholesale. Oasis operates a retail marijuana dispensary nearer to the Las Vegas Strip. The Company's other subsidiaries operate a small-scale cultivation facility, as well as a product manufacturing facility and a wholesale distribution operation in North Las Vegas. Oasis is a 5,000 square foot retail location offering personalized delivery, pick-up, and in-store experiences.

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.

CLS Holdings USA Inc has a Value Score of 85, which is considered to be undervalued.

When you look at CLS Holdings USA Inc’s price-to-sales ratio at 0.17 compared to the industry median at 1.92, this company has a lower price relative to revenue compared to its peers. This could make CLS Holdings USA 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. CLS Holdings USA Inc’s shareholder yield is lower than its industry median ratio of (1.08%). 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.

Lastly, let’s take a look at CLS Holdings USA Inc’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. CLS Holdings USA Inc’s price-to-free-cash-flow ratio is lower than its industry median ratio of 24.45. This could make CLS Holdings USA Inc more attractive because the lower P/FCF ratio indicates that CLS Holdings USA 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.

Lions Gate Entertainment Corp (USA)’s Value Grade

Value Grade:

Lions Gate Entertainment Corp. is engaged in motion picture and television studio operations aligned with the STARZ premium subscription platform. Its segments include Motion Picture, Television Production and Media Networks. Motion Picture and Television Production segments are referred to as Studio Business. Motion Picture segment develops and produces feature films, acquisition of North American and worldwide distribution rights, North American theatrical, home entertainment and television distribution of feature films produced and acquired, and worldwide licensing of distribution rights to feature films produced and acquired. Television Production consists of the development, production and worldwide distribution of television productions including television series, television movies and mini-series, and non-fiction programming. It also includes Entertainment One television and film (eOne) business. Media Networks consists of product lines, including Starz Networks and LIONSGATE+.

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.

Lions Gate Entertainment Corp (USA) has a Value Score of 86, which is considered to be undervalued.

You can read more about Lions Gate Entertainment Corp (USA)’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.

Kartoon Studios Inc’s Value Grade

Value Grade:

Kartoon Studios, Inc., formerly Genius Brands International, Inc., is a global media company developing, producing, marketing and licensing branded animated entertainment properties and consumer products for media and retail distribution. Its IP portfolio of family-friendly content features the Stan Lee brand, Stan Lee's Superhero Kindergarten, starring Arnold Schwarzenegger, on Kartoon Channel!; Shaq's Garage, starring Shaquille O'Neal, coming to Kartoon Channel!; Rainbow Rangers on Kartoon Channel! and Netflix; Llama Llama, starring Jennifer Garner, on Netflix and more. Its Toon Media Networks is a distributed entertainment platform, which consists of Kartoon Channel!, Frederator Network and Ameba. Kartoon Channel! is a distributed entertainment platform. Frederator Network owns and operates the animation network on YouTube, with channels having over 2000 creators and influencers. Ameba is a children's video streaming service that has active, engaging and intelligent programming.

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.

Kartoon Studios Inc has a Value Score of 63, which is considered to be undervalued.

Kartoon Studios Inc’s price-to-book ratio is higher than its peers. This could make Kartoon Studios Inc less attractive for value investors when compared to the industry median at 1.58.

You can read more about Kartoon Studios 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 Entertainment Production 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 Entertainment Production stocks as well as other industrys.

Choosing Which of the 3 Best Entertainment Production 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.

• CLS Holdings USA Inc stock has a Value Grade of A.
• Lions Gate Entertainment Corp (USA) stock has a Value Grade of A.
• Kartoon Studios Inc stock has a Value Grade of B.

Now that you have a bit more background about each of the 3 undervalued stocks in the Entertainment Production 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 Entertainment Production Stocks

Want to learn more about Entertainment Production 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 Entertainment Production Stocks for Friday, March 15
• Is Falcon's Beyond Global Inc (FBYD) Stock a Good Investment?
• Why Falcon's Beyond Global Inc’s (FBYD) Stock Is Down 10.12%
• Why Lions Gate Entertainment Corp (USA)’s (LGF.A) Stock Is Up 10.80%

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.