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 Auto, Truck & Motorcycle 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 Auto, Truck & Motorcycle 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.

Click the button below to learn more about A+ Investor and subscribe today.

5 Undervalued Auto, Truck & Motorcycle 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 Auto, Truck & Motorcycle Parts industry for Monday, June 17, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Auto, Truck & Motorcycle 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.

Aptiv PLC’s Value Grade

Value Grade:

Aptiv PLC is a technology and mobility architecture company. The Company designs and manufactures vehicle components and provides electrical, electronic, and active safety technology solutions to the global automotive and commercial vehicle markets. Its segments include Signal and Power Solutions and Advanced Safety and User Experience. The Signal and Power Solutions segment provides complete design, manufacture, and assembly of the vehicle’s electrical architecture, including engineered component products, connectors, wiring assemblies and harnesses, cable management, electrical centers and hybrid high voltage and safety distribution systems. The Advanced Safety and User Experience provides critical technologies and services, including sensing and perception systems, electronic control units, multi-domain controllers, vehicle connectivity systems, cloud-native software platforms, application software, autonomous driving technologies and end-to-end DevOps tools.

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.

Aptiv PLC has a Value Score of 63, which is considered to be undervalued.

When you look at Aptiv PLC’s price-to-sales ratio at 0.96 compared to the industry median at 0.53, this company has a higher price relative to revenue compared to its peers. This could make Aptiv PLC’s stock less attractive for value investors.

Aptiv PLC’s price-earnings ratio is 6.63 compared to the industry median at 15.23. This means it has a lower share price relative to earnings compared to its peers. This could make Aptiv PLC more attractive for value investors.

Now, let’s assess Aptiv PLC’s EV/EBITDA ratio, also known as enterprise multiple. At 9.6, when compared to the industry median of 6.8, the company may be considered overvalued 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. Aptiv PLC’s shareholder yield is lower 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. Aptiv PLC’s price-to-book ratio is higher than its industry median ratio of 1.22. This could make Aptiv PLC less attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Aptiv PLC’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Aptiv PLC’s price-to-free-cash-flow ratio is higher than its industry median ratio of 13.98. This could make Aptiv PLC less attractive because the higher P/FCF ratio indicates that Aptiv PLC 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.

Cooper-Standard Holdings Inc’s Value Grade

Value Grade:

Cooper-Standard Holdings Inc. is a manufacturer of sealing and fluid handling systems (consisting of fuel and brake delivery and fluid transfer systems). Its products are primarily for use in passenger vehicles and light trucks that are manufactured by global automotive original equipment manufacturers (OEMs) and replacement markets. It operates through four segments: North America, Europe, Asia Pacific, and South America. The Company’s product lines include sealing systems and fluid handling systems (consisting of fuel and brake delivery and fluid transfer systems). The Company's brands include FlushSeal, Gen III Posi-Lock, Easy-Lock, MagAlloy, Ergo-Lock +, PlastiCool and Fortrex. FlushSeal is an advanced integrated solution for frame under glass static sealing systems. Its Easy-Lock is a small package coolant and fuel vapor quick connect. Its MagAlloy is a processing technology for brake lines that increases long term durability through superior corrosion resistance.

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.

Cooper-Standard Holdings Inc has a Value Score of 61, which is considered to be undervalued.

You can read more about Cooper-Standard 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.

Lear Corp’s Value Grade

Value Grade:

Lear Corporation is a global automotive technology company. The Company supplies complete seat systems, key seat components, complete electrical distribution and connection systems, high-voltage power distribution products, including battery disconnect units (BDUs), low-voltage power distribution products, electronic controllers and other electronic products to automotive manufacturers. The Company’s segments include Seating and E-Systems. Its Seating segment consists of the design, development, engineering and manufacture of complete seat systems and key seat components. Its E-Systems segment consists of the design, development, engineering and manufacture of complete electrical distribution and connection systems, high-voltage power distribution products, including BDUs, and low-voltage power distribution products, electronic controllers and other electronic products. Its software offerings include embedded control, cybersecurity software and software to control hardware devices.

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.

Lear Corp has a Value Score of 86, which is considered to be undervalued.

Lear Corp’s price-earnings ratio is 12.6 compared to the industry median at 15.2. This means that it has a lower price relative to its earnings compared to its peers. This makes Lear Corp more attractive for value investors.

Lear Corp’s price-to-book ratio is lower than its peers. This could make Lear Corp more attractive for value investors when compared to the industry median at 1.22.

You can read more about Lear 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.

Phinia Inc’s Value Grade

Value Grade:

PHINIA Inc. is an independent solutions and components provider. The Company develops, designs and manufactures integrated components and systems. The Company provides fuel systems, electrical systems and aftermarket products. Its segments include Fuel Systems and Aftermarket. Fuel Systems segment provides advanced fuel injection systems, fuel delivery modules, canisters, sensors, electronic control modules and associated software. Its highly engineered fuel injection systems portfolio includes pumps, injectors, fuel rail assemblies, engine control modules, and complete systems, including software and calibration services, that reduce emissions and improve fuel economy for traditional and hybrid applications. Aftermarket segment sells products to independent aftermarket customers and original equipment service customers. Aftermarket segment also includes sales of starters and alternators to original equipment manufacturers. Its brand portfolio includes DELPHI, DELCO REMY and HARTRIDGE.

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.

Phinia Inc has a Value Score of 83, which is considered to be undervalued.

Phinia Inc’s price-earnings ratio is 19.9 compared to the industry median at 15.2. This means that it has a higher price relative to its earnings compared to its peers. This makes Phinia Inc less attractive for value investors.

Phinia Inc’s price-to-book ratio is higher than its peers. This could make Phinia Inc less attractive for value investors when compared to the industry median at 1.22.

You can read more about Phinia 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.

Titan International Inc’s Value Grade

Value Grade:

Titan International, Inc. is a global manufacturer of off-highway wheels, tires, assemblies, and undercarriage products. The Company's segments include agricultural, earthmoving/construction and consumer. Its agricultural wheels, tires, and components are manufactured for use on various agricultural equipment. The earthmoving/construction segment manufactures wheels, tires, and undercarriage systems and components for various types of off-the-road (OTR) earthmoving, mining, military, construction, and forestry equipment, including skid steers and aerial lifts. The consumer segment manufactures bias truck tires in Latin America and light truck tires in Russia. The Company also offers select products for ATVs, side-by-sides, rock climbers, turf, and lawn and garden. This segment also includes custom rubber stock mixing sales to a variety of OEMs in tangential industries. It manufactures and sells certain tires under the Goodyear Farm Tire, Titan Tire and Voltyre-Prom Tire brands.

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.

Titan International Inc has a Value Score of 90, which is considered to be undervalued.

Titan International Inc’s price-earnings ratio is 8.1 compared to the industry median at 15.2. This means that it has a lower price relative to its earnings compared to its peers. This makes Titan International Inc more attractive for value investors.

Titan International Inc’s price-to-book ratio is higher than its peers. This could make Titan International Inc less attractive for value investors when compared to the industry median at 1.22.

You can read more about Titan 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.

Other Auto, Truck & Motorcycle 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 Auto, Truck & Motorcycle Parts stocks as well as other industrys.

Choosing Which of the 5 Best Auto, Truck & Motorcycle 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.

• Aptiv PLC stock has a Value Grade of B.
• Cooper-Standard Holdings Inc stock has a Value Grade of B.
• Lear Corp stock has a Value Grade of A.
• Phinia Inc stock has a Value Grade of A.
• Titan International 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 Auto, Truck & Motorcycle 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 Auto, Truck & Motorcycle Parts Stocks

Want to learn more about Auto, Truck & Motorcycle 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.

• 5 Undervalued Auto, Truck & Motorcycle Parts Stocks for Monday, June 17
• 3 Undervalued Auto, Truck & Motorcycle Parts Stocks for Friday, June 14
• Why Adient PLC’s (ADNT) Stock Is Down 5.13%
• Why Aptiv PLC’s (APTV) Stock Is Down 5.65%

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.