Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 6 stocks made the list for top value stocks in the Telecommunications Services - Integrated 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 Telecommunications Services - Integrated 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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6 Undervalued Telecommunications Services - Integrated Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 6 undervalued stocks in the Telecommunications Services - Integrated industry for Wednesday, June 19, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Telecommunications Services - Integrated 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.

Oi SA - em Recuperacao Judicial(ADR)’s Value Grade

Value Grade:

Oi SA em Recuperacao Judicial, formerly Oi S.A., is an integrated telecommunications service provider in Brazil. The Company is a switched fixed-line telephony services (STFC) concessionaire. It is engaged in the provision of STFC as a local and intraregional long-distance carrier. Its segments include Residential Services, Personal Mobility, and SMEs/Corporate. It offers a range of integrated telecommunications services that include fixed and mobile, broadband, pay television (TV), data transmission and Internet provider services. The Company's Residential Services segment is focused on the sale of fixed telephony services, including voice services, data communication services (broadband), and pay TV. The Personal Mobility segment is focused on the sale of mobile telephony services to subscription and prepaid customers, and mobile broadband customer. The SMEs/Corporate segment includes corporate solutions offered to its small, medium-sized, and large corporate customers.

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.

Oi SA - em Recuperacao Judicial(ADR) has a Value Score of 84, which is considered to be undervalued.

When you look at Oi SA - em Recuperacao Judicial(ADR)’s price-to-sales ratio at 0.03 compared to the industry median at 1.13, this company has a lower price relative to revenue compared to its peers. This could make Oi SA - em Recuperacao Judicial(ADR)’s stock more attractive for value investors.

Now, let’s assess Oi SA - em Recuperacao Judicial(ADR)’s EV/EBITDA ratio, also known as enterprise multiple. At 8.8, when compared to the industry median of 7.0, 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. Oi SA - em Recuperacao Judicial(ADR)’s shareholder yield is lower than its industry median ratio of 3.73%. 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.

PCCW Ltd (ADR)’s Value Grade

Value Grade:

PCCW Limited (PCCW) is an investment holding company. The Company's Pacific Century Premium Developments (PCPD) is focused on development projects in Indonesia, Japan and Thailand. The Company's segments include HKT Limited, Media Business, Solutions Business, PCPD and Other Businesses. It is engaged in the provision of telecommunications and related services, which include local telephony, local data and broadband, international telecommunications, mobile, and other telecommunications businesses, such as customer premises equipment sales; the provision of pay-television (pay-TV) services, Internet portal digital media entertainment platform in the Hong Kong Special Administrative Region and other parts of the world; investments in, and development of, systems integration, network engineering and technology-related businesses, and development and management of property and infrastructure projects, as well as property investments.

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.

PCCW Ltd (ADR) has a Value Score of 84, which is considered to be undervalued.

PCCW Ltd (ADR)’s price-to-book ratio is lower than its peers. This could make PCCW Ltd (ADR) more attractive for value investors when compared to the industry median at 1.86.

You can read more about PCCW Ltd (ADR)’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.

PLDT Inc (ADR)’s Value Grade

Value Grade:

PLDT Inc. is a Philippines-based diversified telecommunication company. The Company operates through three business segments: Wireless, Fixed Line and Others. The Company, through its business segments, offers a range of telecommunications services across the Philippines' fiber optic backbone and wireless and fixed line networks. Its wireless segment provides mobile telecommunications services provided by Smart and DMPI; SBI and PDSI are its wireless broadband service provider; and mobile virtual network operations. Its fixed line segment provides telecommunications services. It also provides fixed line services through its subsidiaries, namely, ClarkTel, BCC and PLDT Global and certain subsidiaries, data center, cloud, cyber security services, managed information technology services and reseller ship, and distribution of Filipino channels. Its others segment includes PCEV, PGIH, PLDT Digital and its subsidiaries, and PGIC, an investment company.

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.

PLDT Inc (ADR) has a Value Score of 81, which is considered to be undervalued.

PLDT Inc (ADR)’s price-earnings ratio is 11.0 compared to the industry median at 14.9. This means that it has a lower price relative to its earnings compared to its peers. This makes PLDT Inc (ADR) more attractive for value investors.

PLDT Inc (ADR)’s price-to-book ratio is lower than its peers. This could make PLDT Inc (ADR) more attractive for value investors when compared to the industry median at 1.86.

You can read more about PLDT Inc (ADR)’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.

Telefonica SA (ADR)’s Value Grade

Value Grade:

Telefonica, S.A. is an integrated and diversified telecommunications group operating in Europe and Latin America. The Company's services and products include Mobile business, Fixed-line telephony business and Digital services. Its segments include Telefonica Spain, Telefonica Brazil, Telefonica Germany, Telefonica United Kingdom and Telefonica Hispanoamerica (formed by the Company's operators in Argentina, Chile, Peru, Colombia, Mexico, Venezuela, Ecuador and Uruguay). These segments are engaged in activities relating to wireline, wireless, cable, data, Internet and television (TV) businesses and other digital services in accordance with each location. It offers a range of mobile and related services and products to personal and business customers. It offers traditional fixed telecommunication services, Internet and broadband multimedia services and data and business-solutions services. It offers a range of digital services, such as Internet of Things (IoT).

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.

Telefonica SA (ADR) has a Value Score of 97, which is considered to be undervalued.

Telefonica SA (ADR)’s price-to-book ratio is higher than its peers. This could make Telefonica SA (ADR) less attractive for value investors when compared to the industry median at 1.86.

You can read more about Telefonica SA (ADR)’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.

Telecom Argentina SA (ADR)’s Value Grade

Value Grade:

Telecom Argentina S.A. provides fixed-line telecommunications services in Argentina, and also provides other telephone-related services, such as international long-distance service, data transmission, information technology solutions outsourcing and Internet services. The Company's segments include Fixed Telecommunications Services (Fixed Services), Personal Mobile Telecommunications Services (Personal Mobile Services) and Nucleo Mobile Telecommunications Services (Nucleo Mobile Services). The Company, through its subsidiaries, also provides mobile telecommunications services and international wholesale services. The Fixed services segment consists of basic telephone services, interconnection services, data transmission and Internet services, information and communication technology services, and other telephone services. The Company, through its subsidiaries, such as Telecom Personal S.A. and Nucleo S.A., provides mobile services in Argentina and Paraguay, respectively.

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.

Telecom Argentina SA (ADR) has a Value Score of 87, which is considered to be undervalued.

Telecom Argentina SA (ADR)’s price-earnings ratio is 7.5 compared to the industry median at 14.9. This means that it has a lower price relative to its earnings compared to its peers. This makes Telecom Argentina SA (ADR) more attractive for value investors.

Telecom Argentina SA (ADR)’s price-to-book ratio is higher than its peers. This could make Telecom Argentina SA (ADR) less attractive for value investors when compared to the industry median at 1.86.

You can read more about Telecom Argentina SA (ADR)’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.

Tim SA (ADR)’s Value Grade

Value Grade:

Tim SA, formerly known as a Intelig Telecomunicacoes Ltda, is a Brazil-based telecommunications company. The Company offers mobile voice and data services, broadband Internet access, value-added services and other telecommunications services and products. The Company offers a complete portfolio for individuals and corporate solutions for small, medium, and large companies. In addition to traditional voice and data services, the Company offers a fixed-line broadband service, TIM Live, WTTx technology through the Ultrafibra service and IoT solutions. The Company also offers a variety of digital content and services in its package portfolio. The Company is controlled by Tim Brasil Servicos e Participacoes SA.

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.

Tim SA (ADR) has a Value Score of 85, which is considered to be undervalued.

Tim SA (ADR)’s price-earnings ratio is 12.9 compared to the industry median at 14.9. This means that it has a lower price relative to its earnings compared to its peers. This makes Tim SA (ADR) more attractive for value investors.

Tim SA (ADR)’s price-to-book ratio is higher than its peers. This could make Tim SA (ADR) less attractive for value investors when compared to the industry median at 1.86.

You can read more about Tim SA (ADR)’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 Telecommunications Services - Integrated 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 Telecommunications Services - Integrated stocks as well as other industrys.

Choosing Which of the 6 Best Telecommunications Services - Integrated 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.

• Oi SA - em Recuperacao Judicial(ADR) stock has a Value Grade of A.
• PCCW Ltd (ADR) stock has a Value Grade of A.
• PLDT Inc (ADR) stock has a Value Grade of A.
• Telefonica SA (ADR) stock has a Value Grade of A.
• Telecom Argentina SA (ADR) stock has a Value Grade of A.
• Tim SA (ADR) stock has a Value Grade of A.

Now that you have a bit more background about each of the 6 undervalued stocks in the Telecommunications Services - Integrated 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 Telecommunications Services - Integrated Stocks

Want to learn more about Telecommunications Services - Integrated 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.

• 6 Undervalued Telecommunications Services - Integrated Stocks for Wednesday, June 19
• 6 Undervalued Telecommunications Services - Integrated Stocks for Tuesday, June 18
• 3 Undervalued Telecommunications Services - Integrated Stocks for Monday, June 17
• 6 Undervalued Telecommunications Services - Integrated Stocks for Friday, June 14

AAII Disclaimer

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