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 Business Support 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 Business Support 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.

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5 Undervalued Business Support Services 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 Business Support Services industry for Thursday, June 06, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Business Support 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.

AerCap Holdings N.V.’s Value Grade

Value Grade:

AerCap Holdings N.V. is an Ireland-based company, which is primarily engaged in aviation leasing. The Company provides a range of assets for lease, including narrowbody and widebody aircraft, regional jets, freighters, engines, and helicopters. Its offering includes new and used commercial passenger and cargo aircraft, and helicopters, on operating lease from its existing fleet and order book. In addition, it offers aftermarket components, equipment and services through its materials business and the lease, purchase and financing of spare engines. It also provides aircraft owners, financiers and investors with all asset services necessary to manage an aircraft, engines and helicopter portfolio. The Company has a portfolio of approximately 1,740 aircraft, over 900 engines and over 300 helicopters, and an order book of more than 400 of in-demand aircraft in the world. The Company serves approximately 300 customers around the world with comprehensive fleet solutions.

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.

AerCap Holdings N.V. has a Value Score of 87, which is considered to be undervalued.

When you look at AerCap Holdings N.V.’s price-to-sales ratio at 2.50 compared to the industry median at 1.41, this company has a higher price relative to revenue compared to its peers. This could make AerCap Holdings N.V.’s stock less attractive for value investors.

AerCap Holdings N.V.’s price-earnings ratio is 5.97 compared to the industry median at 22.58. This means it has a lower share price relative to earnings compared to its peers. This could make AerCap Holdings N.V. more attractive for value investors.

Now, let’s assess AerCap Holdings N.V.’s EV/EBITDA ratio, also known as enterprise multiple. At 10.2, when compared to the industry median of 11.7, 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. AerCap Holdings N.V.’s shareholder yield is higher than its industry median ratio of 0.00%. 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. AerCap Holdings N.V.’s price-to-book ratio is lower than its industry median ratio of 2.74. This could make AerCap Holdings N.V. more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at AerCap Holdings N.V.’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. AerCap Holdings N.V.’s price-to-free-cash-flow ratio is lower than its industry median ratio of 16.77. This could make AerCap Holdings N.V. more attractive because the lower P/FCF ratio indicates that AerCap Holdings N.V. 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.

C3is Inc’s Value Grade

Value Grade:

C3is Inc. is a Greece-based entity, incorporated in Marshall Islands, primarily engaged in seaborne transportation services to drybulk charterer for both national and private clients. The Company acts as a holding company and operates through its two subsidiaries. The Company's fleet consists of two handysize drybulk carriers: Eco Bushfire and Eco Angelbay.

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.

C3is Inc has a Value Score of 80, which is considered to be undervalued.

C3is Inc’s price-to-book ratio is higher than its peers. This could make C3is Inc less attractive for value investors when compared to the industry median at 2.74.

You can read more about C3is 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.

Concentrix Corp’s Value Grade

Value Grade:

Concentrix Corporation is a global provider of customer experience (CX) solutions and technology. The Company provides end-to-end capabilities, including CX process optimization, technology innovation, front- and back-office automation, analytics and business transformation. Its customer lifecycle management solutions include services such as customer care, sales support and digital marketing. It also provides complementary services, including CX/user experience (UX) strategy and design, digital transformation, and voice of the customer (VOC) and analytics. Its CX/UX strategy and design solutions, including CX strategy, data-driven user design, journey mapping, and multi-platform engineering. Its digital transformation solutions include services such as robotic process automation and cognitive automation and mobile app development. ConcentrixCX, its VOC solutions platform, helps turn customer feedback into actionable insights. It operates under the trade name Concentrix + Webhelp.

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.

Concentrix Corp has a Value Score of 64, which is considered to be undervalued.

Concentrix Corp’s price-earnings ratio is 12.7 compared to the industry median at 22.6. This means that it has a lower price relative to its earnings compared to its peers. This makes Concentrix Corp more attractive for value investors.

Concentrix Corp’s price-to-book ratio is higher than its peers. This could make Concentrix Corp less attractive for value investors when compared to the industry median at 2.74.

You can read more about Concentrix 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.

Lesaka Technologies Inc’s Value Grade

Value Grade:

Lesaka Technologies, Inc. is a South Africa-based financial technology (Fintech) company. The Company utilizes its proprietary banking and payment technologies to deliver financial services solutions to merchants (B2B) and consumers (B2C) in Southern Africa. It offers cash management solutions, growth capital, card acquiring, bill payment technologies and value-added services to formal and informal retail merchants as well as banking, lending, and insurance solutions to consumers across Southern Africa. The Company operates through two segments: Consumer and Merchant. The Consumer segment includes activities related to the provision of financial services to customers. Its products include transactional banking, short-term loans, a digital wallet as well as insurance and various value-added services (VAS) to underserved consumers in South Africa. The Merchant segment includes activities related to the provision of goods and services provided to corporate and other juristic entities.

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.

Lesaka Technologies Inc has a Value Score of 62, which is considered to be undervalued.

Lesaka Technologies Inc’s price-to-book ratio is higher than its peers. This could make Lesaka Technologies Inc less attractive for value investors when compared to the industry median at 2.74.

You can read more about Lesaka Technologies 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.

Onfolio Holdings Inc’s Value Grade

Value Grade:

Onfolio Holdings Inc. is a holding company that acquires and manages a diversified portfolio of online businesses across a range of verticals. The Company is engaged in Website management, advertising and content placement on its online businesses, and product sales on certain sites. The Company owns multiple online businesses and manages online businesses on behalf of certain unconsolidated entities in which it holds equity interests. It operates through business models, such as direct-to-consumer (D2C) e-commerce, business-to-business (B2B) SEO and marketing services, as well as B2B digital products. The Company owns and/or manages over 20 online businesses, including RevenueZen.com, Contentellect.com, ProofreadAnywhere.com/WorkAtHomeSchool.com/WorkYourWay2020.com, SEOButler.com, Preventdirectaccess.com/Passwordprotectwp.com, Mightydeals.com and others. RevenueZen.com is an online service provider that works with B2B brands to grow their organic and referral traffic.

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.

Onfolio Holdings Inc has a Value Score of 68, which is considered to be undervalued.

Onfolio Holdings Inc’s price-to-book ratio is higher than its peers. This could make Onfolio Holdings Inc less attractive for value investors when compared to the industry median at 2.74.

You can read more about Onfolio 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 Business Support 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 Business Support Services stocks as well as other industrys.

Choosing Which of the 5 Best Business Support 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.

• AerCap Holdings N.V. stock has a Value Grade of A.
• C3is Inc stock has a Value Grade of B.
• Concentrix Corp stock has a Value Grade of B.
• Lesaka Technologies Inc stock has a Value Grade of B.
• Onfolio Holdings Inc stock has a Value Grade of B.

Now that you have a bit more background about each of the 5 undervalued stocks in the Business Support 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 Business Support Services Stocks

Want to learn more about Business Support 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.

• 5 Undervalued Business Support Services Stocks for Thursday, June 06
• 7 Undervalued Business Support Services Stocks for Wednesday, June 05
• Why Willdan Group, Inc.’s (WLDN) Stock Is Up 4.30%
• 7 Undervalued Business Support Services Stocks for Tuesday, June 04

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.