Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 5 stocks made the list for top value stocks in the Investment Management & Fund Operators 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 Investment Management & Fund Operators 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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5 Undervalued Investment Management & Fund Operators Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 5 undervalued stocks in the Investment Management & Fund Operators industry for Tuesday, March 26, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Investment Management & Fund Operators 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.

BROOKFIELD ASSET MANAGEMENT LTD’s Value Grade

Value Grade:

Brookfield Asset Management Ltd. is primarily engaged in providing alternative asset management services. The Company provides its services through an ownership interest in an alternative asset management business, which is carried on by Brookfield Asset Management Inc. (Brookfield) and its subsidiaries. Its products have three categories, which include long-term private funds, perpetual strategies and liquid strategies. The Company's wholly owned subsidiaries include 2451634 Alberta Inc. and Brookfield UK Employee Co Limited. Brookfield is a global alternative asset manager with assets under management across real estate, infrastructure, renewable power and transition, private equity and credit. Brookfield offers a range of alternative investment products to investors around the world, including public and private pension plans, endowments and foundations, sovereign wealth funds, financial institutions, insurance companies and private wealth investors.

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.

BROOKFIELD ASSET MANAGEMENT LTD has a Value Score of 70, which is considered to be undervalued.

When you look at BROOKFIELD ASSET MANAGEMENT LTD’s price-to-sales ratio at 4.23 compared to the industry median at 3.69, this company has a higher price relative to revenue compared to its peers. This could make BROOKFIELD ASSET MANAGEMENT LTD’s stock less attractive for value investors.

BROOKFIELD ASSET MANAGEMENT LTD’s price-earnings ratio is 9.32 compared to the industry median at 14.14. This means it has a lower share price relative to earnings compared to its peers. This could make BROOKFIELD ASSET MANAGEMENT LTD more attractive for value investors.

Now, let’s assess BROOKFIELD ASSET MANAGEMENT LTD’s EV/EBITDA ratio, also known as enterprise multiple. At 6.3, when compared to the industry median of 14.9, 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. BROOKFIELD ASSET MANAGEMENT LTD’s shareholder yield is higher than its industry median ratio of 3.42%. 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. BROOKFIELD ASSET MANAGEMENT LTD’s price-to-book ratio is higher than its industry median ratio of 1.11. This could make BROOKFIELD ASSET MANAGEMENT LTD less attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at BROOKFIELD ASSET MANAGEMENT LTD’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. BROOKFIELD ASSET MANAGEMENT LTD’s price-to-free-cash-flow ratio is lower than its industry median ratio of 14.45. This could make BROOKFIELD ASSET MANAGEMENT LTD more attractive because the lower P/FCF ratio indicates that BROOKFIELD ASSET MANAGEMENT LTD 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.

Federated Hermes Inc’s Value Grade

Value Grade:

Federated Hermes, Inc. is an investment management company. The Company operates through a single segment, being the investment management business. It sponsors, markets and provides investment-related services to various investment products, including sponsored investment companies and other funds (Federated Hermes Funds); and Separate Accounts, which include separately managed accounts (SMAs), institutional accounts, sub-advised funds and other managed products in both domestic and international markets. In addition, it markets and provides stewardship and real estate development services to various domestic and international companies. The Company provides investment advisory services to approximately 180 Federated Hermes Funds. It markets these funds to institutional customers and banks, broker/dealers and other financial intermediaries who use them to meet the needs of customers and/or clients, including, among others, retail investors, corporations and retirement plans.

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.

Federated Hermes Inc has a Value Score of 69, which is considered to be undervalued.

Federated Hermes Inc’s price-earnings ratio is 10.5 compared to the industry median at 14.1. This means that it has a lower price relative to its earnings compared to its peers. This makes Federated Hermes Inc more attractive for value investors.

Federated Hermes Inc’s price-to-book ratio is lower than its peers. This could make Federated Hermes Inc more attractive for value investors when compared to the industry median at 1.11.

You can read more about Federated Hermes 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.

Invesco Ltd’s Value Grade

Value Grade:

Invesco Ltd. is an independent investment management firm. It serves the retail and institutional markets within the investment management industry in the Americas, Europe, Middle East, and Africa and Asia-Pacific in 120 countries. It offers a range of investment strategies across asset classes, investment styles, and geographies. Its asset classes include equity, fixed income, balanced, alternatives and money market. Its retail assets under management include mutual funds, exchange-traded funds, separately managed accounts, individual savings accounts, investment companies with variable capital, investment trusts, open-end mutual funds, unit investment trusts, and variable insurance funds. Its institutional assets include institutional separate accounts, private funds, open-end mutual funds, and collective trust funds. Its client base includes public and private entities, unions, non-profit organizations, endowments, foundations, financial institutions, and sovereign wealth funds.

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.

Invesco Ltd has a Value Score of 92, which is considered to be undervalued.

Invesco Ltd’s price-to-book ratio is higher than its peers. This could make Invesco Ltd less attractive for value investors when compared to the industry median at 1.11.

You can read more about Invesco 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.

Royce Value Trust Inc’s Value Grade

Value Grade:

Royce Value Trust, Inc. is a diversified, closed-end investment company. The Company primarily invests in small-cap securities. The Company’s portfolio sectors include industrials, financials, information technology, materials, healthcare, consumer discretionary, energy, consumer staples, real estate, and communication services. The Company's investment advisor is Royce & Associates, LP. Royce & Associates, LP primarily conducts business using the name Royce Investment Partners (Royce).

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.

Royce Value Trust Inc has a Value Score of 62, which is considered to be undervalued.

Royce Value Trust Inc’s price-earnings ratio is 5.0 compared to the industry median at 14.1. This means that it has a lower price relative to its earnings compared to its peers. This makes Royce Value Trust Inc more attractive for value investors.

Royce Value Trust Inc’s price-to-book ratio is higher than its peers. This could make Royce Value Trust Inc less attractive for value investors when compared to the industry median at 1.11.

You can read more about Royce Value Trust 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.

Safeguard Scientifics Inc’s Value Grade

Value Grade:

Safeguard Scientifics, Inc. is a provider of capital and relevant expertise to technology-driven businesses. The Company holds interests in 8 non-consolidated companies. The Company offers strategic, operational, and management support to certain of its ownership interests. Through its strategic support, the Company offers strategic direction to certain of its ownership interests, which include defining short and long-term strategic goals; identifying and planning for the critical success factors to reach these goals; identifying and addressing the challenges and operational improvements; and identifying sources of and providing capital to drive growth. Through its management and operational support, the Company serves on the boards of directors of its partner companies, working with them to develop and implement strategic and operating plans. It measures and monitors the achievement of these plans through regular review of operational and financial performance measurements.

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.

Safeguard Scientifics Inc has a Value Score of 95, which is considered to be undervalued.

Safeguard Scientifics Inc’s price-to-book ratio is higher than its peers. This could make Safeguard Scientifics Inc less attractive for value investors when compared to the industry median at 1.11.

You can read more about Safeguard Scientifics 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 Investment Management & Fund Operators 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 Investment Management & Fund Operators stocks as well as other industrys.

Choosing Which of the 5 Best Investment Management & Fund Operators 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.

• BROOKFIELD ASSET MANAGEMENT LTD stock has a Value Grade of B.
• Federated Hermes Inc stock has a Value Grade of B.
• Invesco Ltd stock has a Value Grade of A.
• Royce Value Trust Inc stock has a Value Grade of B.
• Safeguard Scientifics Inc stock has a Value Grade of A.

Now that you have a bit more background about each of the 5 undervalued stocks in the Investment Management & Fund Operators 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 Investment Management & Fund Operators Stocks

Want to learn more about Investment Management & Fund Operators 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.

• 5 Undervalued Investment Management & Fund Operators Stocks for Tuesday, March 26
• 3 Undervalued Investment Management & Fund Operators Stocks for Monday, March 25
• Why Silvercrest Asset Management Group Inc’s (SAMG) Stock Is Down 4.02%
• 5 Undervalued Investment Management & Fund Operators Stocks for Friday, March 22

AAII Disclaimer

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