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 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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5 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 5 undervalued stocks in the Electronic Equipment & Parts industry for Wednesday, May 22, 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.

Akoustis Technologies Inc’s Value Grade

Value Grade:

Akoustis Technologies, Inc. is a commercial product company. The Company operates through two segments: Fabrication Services and RF Filters. Its Fabrication Services segment consists of engineering review services and backend packaging services. Its RF Filters segment consists of amplifier and filter product sales. The Company develops RF filters for fifth generation (5G), wireless fidelity (WiFi) and defense bands through its resonator device models and product design kits (PDKs). It is focused on developing, designing, and manufacturing RF filter solutions for the wireless industry for products, including smartphones and tablets, network infrastructure equipment, WiFi Customer Premise Equipment (CPE), automotive, industrial and defense applications. The Company has developed a microelectromechanical system (MEMS) based bulk acoustic wave (BAW) technology. It is also engaged in providing back-end semiconductor supply chain services.

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.

Akoustis Technologies Inc has a Value Score of 70, which is considered to be undervalued.

When you look at Akoustis Technologies Inc’s price-to-sales ratio at 0.42 compared to the industry median at 1.58, this company has a lower price relative to revenue compared to its peers. This could make Akoustis Technologies 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. Akoustis Technologies Inc’s shareholder yield is lower than its industry median ratio of (1.36%). 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. Akoustis Technologies Inc’s price-to-book ratio is lower than its industry median ratio of 1.41. This could make Akoustis Technologies Inc more attractive to investors looking for a new addition to their portfolio.

Flex Ltd’s Value Grade

Value Grade:

Flex Ltd. is engaged in providing a portfolio of manufacturing solutions and services. The Company operates through three segments: Flex Agility Solutions (FAS), and Flex Reliability Solutions (FRS). The FAS segment is comprised of various end markets, such as Communications, Enterprise, and Cloud (CEC), including data infrastructure, edge infrastructure and communications infrastructure; Lifestyle, including appliances, consumer packaging, floorcare, micro mobility and audio; and Consumer Devices, including mobile and high velocity consumer devices. The FRS segment consists of end markets, such as Automotive, including mobility, autonomous, connectivity, electrification, and smart technologies; Health Solutions, including medical devices, medical equipment, and drug delivery; and Industrial, including capital equipment, industrial devices, and renewables and grid edge.

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.

Flex Ltd has a Value Score of 70, which is considered to be undervalued.

Flex Ltd’s price-earnings ratio is 15.0 compared to the industry median at 22.5. This means that it has a lower price relative to its earnings compared to its peers. This makes Flex Ltd more attractive for value investors.

Flex Ltd’s price-to-book ratio is lower than its peers. This could make Flex Ltd more attractive for value investors when compared to the industry median at 1.41.

You can read more about Flex 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.

Methode Electronics Inc’s Value Grade

Value Grade:

Methode Electronics, Inc. is a supplier of custom engineered solutions with sales, engineering and manufacturing locations in North America, Europe, Middle East, and Asia. The Company operates through four segments: Automotive, Industrial, Interface and Medical. The Automotive segment supplies electronic and electro-mechanical devices and related products to automobile original equipment manufacturers (OEMs). The Industrial segment manufactures external lighting solutions, industrial safety radio remote controls, braided flexible cables, current-carrying laminated busbars and devices, custom power-product assemblies, such as its PowerRail solution, high-current low-voltage flexible power cabling systems and powder-coated busbars. The Interface segment provides a variety of copper-based transceivers and user interface solutions. The Medical segment is made up of its medical device business, Dabir Surfaces, with its surface support technology aimed at pressure injury prevention.

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.

Methode Electronics Inc has a Value Score of 92, which is considered to be undervalued.

Methode Electronics Inc’s price-to-book ratio is higher than its peers. This could make Methode Electronics Inc less attractive for value investors when compared to the industry median at 1.41.

You can read more about Methode Electronics 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.

Markforged Holding Corp’s Value Grade

Value Grade:

Markforged Holding Corporation designs hardware, software and advanced materials. The Company's platform, The Digital Forge, is an additive manufacturing platform powering engineers, designers and manufacturing professionals globally. The Digital Forge combines three-dimensional (3D) printers, proprietary metal and composite materials and cloud-based software for manufacturers to bring industrial production to the point of need on the factory floor. Its portfolio of 3D printers includes industrial composite printers that provide predictable functionality through their software, sensors, materials and print modes and metal printers that can fabricate strong, complex metal parts in a variety of metals. It serves various industries, including aerospace, automotive, consumer packaged goods, education and research, electronics manufacturing, energy, federal and defense, industrial equipment, medical, product development and food and beverage.

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.

Markforged Holding Corp has a Value Score of 68, which is considered to be undervalued.

Markforged Holding Corp’s price-to-book ratio is higher than its peers. This could make Markforged Holding Corp less attractive for value investors when compared to the industry median at 1.41.

You can read more about Markforged Holding 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.

Surge Components Inc’s Value Grade

Value Grade:

Surge Components, Inc. is a supplier of electronic products and components. The Company operates with two sales groups, Surge Components (Surge) and Challenge Electronics (Challenge). Its products include capacitors, which are electrical energy storage devices, and discrete components, such as semiconductor rectifiers, transistors and diodes, which are single function low power semiconductor products that are packaged alone as compared to integrated circuits such as microprocessors. The products that the Company sells are utilized in the electronic circuitry of diverse products, including, but not limited to, automobiles, audio products, temperature control products, lighting products, energy related products, computer related products, various types of consumer products, garage door openers, household appliances, power supplies and security equipment. The Company’s products include buzzers, speakers, microphones, resonators, alarms, chimes, filters, and discriminators.

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.

Surge Components Inc has a Value Score of 88, which is considered to be undervalued.

Surge Components Inc’s price-earnings ratio is 16.4 compared to the industry median at 22.5. This means that it has a lower price relative to its earnings compared to its peers. This makes Surge Components Inc more attractive for value investors.

Surge Components Inc’s price-to-book ratio is higher than its peers. This could make Surge Components Inc less attractive for value investors when compared to the industry median at 1.41.

You can read more about Surge 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 5 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.

• Akoustis Technologies Inc stock has a Value Grade of B.
• Flex Ltd stock has a Value Grade of B.
• Methode Electronics Inc stock has a Value Grade of A.
• Markforged Holding Corp stock has a Value Grade of B.
• Surge Components 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 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, May 22
• 5 Undervalued Electronic Equipment & Parts Stocks for Tuesday, May 21
• Why Hesai Group - ADR’s (HSAI) Stock Is Down 13.88%
• Why iRobot Corp’s (IRBT) Stock Is Down 6.23%

AAII Disclaimer

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