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 Professional Information Services 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 Professional Information Services 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.

3 Undervalued Professional Information Services 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 Professional Information Services industry for Thursday, May 16, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Professional Information Services 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.

Cengage Learning Holdings II Inc’s Value Grade

Value Grade:

Cengage Learning Holdings II, Inc. is a global education technology company. The Company is organized into three core business units: Cengage Academic business, Cengage Work business, and Cengage Select. In the Cengage Academic business unit, the Company integrates U.S. Higher Education, International Higher Education and Secondary Education in order to leverage synergies across these businesses that share content, technology platforms and support services. The Cengage Work business unit services the workforce skills market and includes the Company’s ed2go and Infosec businesses that leverage all the Company’s relationships, content, and data to drive growth. The Company’s third core business unit, Cengage Select, consists of four businesses, English language teaching (ELT), Research and Other (Australia K-12 and Milady), each serving select markets and customers. The Company serves the higher education, secondary education, workforce skills, ELT, and research markets around the world.

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.

Cengage Learning Holdings II Inc has a Value Score of 87, which is considered to be undervalued.

When you look at Cengage Learning Holdings II Inc’s price-to-sales ratio at 0.56 compared to the industry median at 3.98, this company has a lower price relative to revenue compared to its peers. This could make Cengage Learning Holdings II Inc’s stock more attractive for value investors.

Now, let’s assess Cengage Learning Holdings II Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 6.9, when compared to the industry median of 19.3, 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. Cengage Learning Holdings II Inc’s shareholder yield is lower than its industry median ratio of 1.30%. 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 Cengage Learning Holdings II Inc’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Cengage Learning Holdings II Inc’s price-to-free-cash-flow ratio is lower than its industry median ratio of 37.18. This could make Cengage Learning Holdings II Inc more attractive because the lower P/FCF ratio indicates that Cengage Learning Holdings II 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.

CreditRiskMonitor.Com Inc’s Value Grade

Value Grade:

CreditRiskMonitor.com, Inc. is engaged in selling a suite of Web-based, software as a service (SaaS) subscription product providing access to comprehensive commercial credit reports, bankruptcy risk analytics, financial and payment information, and curated news on public and private companies. The Company focuses on facilitating the analysis of corporate financial risk, in the context of the extension of trade credit from one business to another; the management by businesses of important relationships with suppliers, and/or the management by businesses of significant counterparty (i.e., buying and selling) relationships. Its comprehensive commercial credit reports covering both public and private companies worldwide are published through its Web-based platform and feature detailed analyses of financial statements, including ratio analysis and trend reports, and peer analysis. Its platform, SupplyChainMonitor, leverages its financial risk analytics to create a risk management solution.

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.

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

CreditRiskMonitor.Com Inc’s price-earnings ratio is 13.1 compared to the industry median at 34.9. This means that it has a lower price relative to its earnings compared to its peers. This makes CreditRiskMonitor.Com Inc more attractive for value investors.

CreditRiskMonitor.Com Inc’s price-to-book ratio is higher than its peers. This could make CreditRiskMonitor.Com Inc less attractive for value investors when compared to the industry median at 4.08.

You can read more about CreditRiskMonitor.Com 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.

Dun & Bradstreet Holdings Inc’s Value Grade

Value Grade:

Dun & Bradstreet Holdings, Inc. is a global provider of business decisioning data and analytics. The Company clients embed its end-to-end solutions into their daily workflows to inform commercial credit decisions, confirm suppliers and improve salesforce productivity and gain visibility into key markets. Its solutions support its clients’ mission critical business operations by providing and curated data and analytics to help drive informed decisions and improved outcomes. The Company operates through two segments: North America and International. Its finance and risk solutions are used in the critical decisioning processes of finance, risk, compliance and procurement departments worldwide. Its sales and marketing solutions combine firmographic, personal contact, intent and non-traditional data to assist clients in optimizing their sales and marketing strategy by cleansing customer relationship management (CRM) data and narrowing their focus and efforts on the probability prospects.

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.

Dun & Bradstreet Holdings Inc has a Value Score of 63, which is considered to be undervalued.

Dun & Bradstreet Holdings Inc’s price-to-book ratio is higher than its peers. This could make Dun & Bradstreet Holdings Inc less attractive for value investors when compared to the industry median at 4.08.

You can read more about Dun & Bradstreet 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.

Other Professional Information Services 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 Professional Information Services stocks as well as other industrys.

Choosing Which of the 3 Best Professional Information Services 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.

• Cengage Learning Holdings II Inc stock has a Value Grade of A.
• CreditRiskMonitor.Com Inc stock has a Value Grade of B.
• Dun & Bradstreet Holdings 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 Professional Information Services 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 Professional Information Services Stocks

Want to learn more about Professional Information Services 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 Professional Information Services Stocks for Thursday, May 16
• Why CLARIVATE PLC’s (CLVT) Stock Is Up 4.82%
• Why Open Lending Corp’s (LPRO) Stock Is Up 5.19%
• Why Value Line, Inc.’s (VALU) Stock Is Down 4.45%

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.