Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 4 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.

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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4 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 4 undervalued stocks in the Electronic Equipment & Parts industry for Wednesday, March 20, 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.

Avnet Inc’s Value Grade

Value Grade:

Avnet, Inc. is a global electronic component technology distributor and solutions provider. The Company markets, sells, and distributes electronic components from electronic component manufacturers, including semiconductors, interconnect, passive and electromechanical components, and other integrated and embedded components. Its primary operating groups include Electronic Components (EC) and Farnell. EC serves a variety of markets ranging from industrial to automotive to defense and aerospace. EC offers an array of customer support options throughout the entire product lifecycle, including turnkey and customized design, supply chain, new product introduction, programming, logistics and post-sales services. The Farnell operating group primarily supports lower-volume customers and distributes a portfolio of kits, tools, electronic components, industrial automation components, and test and measurement products to both engineers and entrepreneurs, primarily through an e-commerce channel.

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.

Avnet Inc has a Value Score of 97, which is considered to be undervalued.

When you look at Avnet Inc’s price-to-sales ratio at 0.16 compared to the industry median at 1.41, this company has a lower price relative to revenue compared to its peers. This could make Avnet Inc’s stock more attractive for value investors.

Avnet Inc’s price-earnings ratio is 6.42 compared to the industry median at 20.31. This means it has a lower share price relative to earnings compared to its peers. This could make Avnet Inc more attractive for value investors.

Now, let’s assess Avnet Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 6.4, when compared to the industry median of 11.4, 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. Avnet Inc’s shareholder yield is higher than its industry median ratio of (1.20%). 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. Avnet Inc’s price-to-book ratio is lower than its industry median ratio of 1.24. This could make Avnet Inc more attractive to investors looking for a new addition to their portfolio.

BIO-Key International Inc’s Value Grade

Value Grade:

BIO-key International, Inc. is an identity and access management (IAM) platform provider enabling work-from-anywhere for enterprise, education, and government customers. The Company's products include PortalGuard and PortalGuard identity-as-a-service (IDaaS) enterprise IAM, WEB-key biometric civil and large-scale ID infrastructure, MobileAuth mobile phone authentication application, and accessory fingerprint scanner and hardware to provide a solution. Its PortalGuard is a cloud-based identity platform that allows its customers to integrate with any cloud or on-premises SaaS application, service or cloud host, as well as Windows device authentication through a single IAM platform. It offers WEB-key, which is a biometric service management platform that incorporates various functions for regulatory compliance, enrollment, authentication or identification, and integrity in a multi-tenant private or public cloud delivery platform. It also offers biometric software integration APIs.

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.

BIO-Key International Inc has a Value Score of 83, which is considered to be undervalued.

BIO-Key International Inc’s price-to-book ratio is higher than its peers. This could make BIO-Key International Inc less attractive for value investors when compared to the industry median at 1.24.

You can read more about BIO-Key International 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.

Jabil Inc’s Value Grade

Value Grade:

Jabil Inc. is a manufacturing solutions provider. The Company provides comprehensive electronics design, production and product management services to companies in various industries and end markets. It operates through two segments: Electronics Manufacturing Services (EMS) and Diversified Manufacturing Services (DMS). EMS segment is focused on leveraging information technology, supply chain design and engineering, technologies centered on core electronics, utilizing its manufacturing infrastructure and its ability to serve a broad range of end markets. EMS segment includes customers in the fifth generation (5G), wireless and cloud, digital print and retail, industrial and semi-capital equipment, and networking and storage industries. DMS segment provides engineering solutions, which is focused on material sciences, machining, tooling and others. DMS segment includes customers in the automotive and transportation, connected devices, healthcare and packaging 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.

Jabil Inc has a Value Score of 66, which is considered to be undervalued.

Jabil Inc’s price-earnings ratio is 10.8 compared to the industry median at 20.3. This means that it has a lower price relative to its earnings compared to its peers. This makes Jabil Inc more attractive for value investors.

Jabil Inc’s price-to-book ratio is lower than its peers. This could make Jabil Inc more attractive for value investors when compared to the industry median at 1.24.

You can read more about Jabil 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.

Taitron Components Inc’s Value Grade

Value Grade:

Taitron Components Incorporated is primarily a supplier of original designed and manufactured (ODM) products that include value-added engineering and turn-key solutions. The Company is focused on providing original equipment manufacturers (OEMs) and contract electronic manufacturers (CEMs) with ODM products for their multi-year turn-key projects (ODM Projects) and ODM electronic components (ODM Components). Its product offerings range from discrete semiconductors through small electronic devices. It also distributes brand-name electronic components with an inventory available on hand. The Company has two divisions: Taiwan and China. Its Taiwan and China locations provide support for inventory sourcing, purchases and coordinating the manufacture of its ODM Projects and ODM Components (collectively, ODM Products). Its China location also serves as the engineering center responsible for making component datasheets and test specifications and arranging pre-production and mass production.

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.

Taitron Components Inc has a Value Score of 69, which is considered to be undervalued.

Taitron Components Inc’s price-earnings ratio is 10.7 compared to the industry median at 20.3. This means that it has a lower price relative to its earnings compared to its peers. This makes Taitron Components Inc more attractive for value investors.

Taitron Components Inc’s price-to-book ratio is higher than its peers. This could make Taitron Components Inc less attractive for value investors when compared to the industry median at 1.24.

You can read more about Taitron Components 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 4 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.

• Avnet Inc stock has a Value Grade of A.
• BIO-Key International Inc stock has a Value Grade of A.
• Jabil Inc stock has a Value Grade of B.
• Taitron Components Inc stock has a Value Grade of B.

Now that you have a bit more background about each of the 4 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.

• 4 Undervalued Electronic Equipment & Parts Stocks for Wednesday, March 20
• 4 Undervalued Electronic Equipment & Parts Stocks for Tuesday, March 19
• Why Applied Optoelectronics Inc’s (AAOI) Stock Is Up 4.78%
• Why iRobot Corp’s (IRBT) Stock Is Down 4.13%

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.