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 Household Electronics 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 Household Electronics 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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3 Undervalued Household Electronics 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 Household Electronics industry for Friday, June 21, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Household Electronics 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.

Paragon Technologies Inc.’s Value Grade

Value Grade:

Paragon Technologies, Inc. (Paragon) is engaged in diverse business activities, including material handling, distribution and real estate services. The Company’s subsidiaries include SI Systems, LLC (SI Systems); Ohana Home Services, LLC (Ohana); ARK Investments, LLC and SED International de Colombia, S.A.S. (SEDC). SI Systems is a supply chain and logistics manufacturer and software engineering company. SI Systems provides solutions to distribution centers, manufacturers and warehouses worldwide. SI Systems provides material handling solutions that increase productivity and provide safety enhancements. SEDC distributes information technology (IT) hardware products from 27 IT manufacturers, such as Hewlett Packard, Lenovo, Dell, Samsung, LG, Epson, Hitachi, and others. SEDC's business is divided into four main business units: Value, Transactional, Consumer Electronics, and Integrated Services. Ohana acquires residential real estate for income and capital appreciation purposes.

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.

Paragon Technologies Inc. has a Value Score of 75, which is considered to be undervalued.

When you look at Paragon Technologies Inc.’s price-to-sales ratio at 0.09 compared to the industry median at 0.30, this company has a lower price relative to revenue compared to its peers. This could make Paragon Technologies Inc.’s stock more attractive for value investors.

Paragon Technologies Inc.’s price-earnings ratio is 29.25 compared to the industry median at 29.25. This means it has a similar share price relative to earnings compared to its peers. This could make Paragon Technologies Inc. fairly attractive for value investors.

Now, let’s assess Paragon Technologies Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 7.0, when compared to the industry median of 8.1, 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. Paragon Technologies Inc.’s shareholder yield is lower than its industry median ratio of (0.33%). 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. Paragon Technologies Inc.’s price-to-book ratio is lower than its industry median ratio of 1.23. This could make Paragon Technologies Inc. more attractive to investors looking for a new addition to their portfolio.

Strong Global Entertainment Inc’s Value Grade

Value Grade:

Strong Global Entertainment, Inc. is an entertainment company. The Company manufactures and distributes large format projection screens, provides comprehensive managed services, technical support and related products and services primarily to cinema exhibitors, theme parks, educational institutions and similar venues. In addition to traditional projection screens, it manufactures and distributes its Eclipse curvilinear screens. It also provides maintenance, repair, installation, network support services and other services to cinema operators, primarily in the United States. Its operations include Strong/MDI Screen Systems, Inc. (Strong/MDI), which manufactures and distributes large format projection screens and coatings, and Strong Technical Services, Inc. (STS), which provides comprehensive managed services, technical support and other products and services. It also distributes and supports third party products, including digital projectors, servers, displays and sound systems.

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.

Strong Global Entertainment Inc has a Value Score of 71, which is considered to be undervalued.

Strong Global Entertainment Inc’s price-earnings ratio is 4.6 compared to the industry median at 29.3. This means that it has a lower price relative to its earnings compared to its peers. This makes Strong Global Entertainment Inc more attractive for value investors.

Strong Global Entertainment Inc’s price-to-book ratio is lower than its peers. This could make Strong Global Entertainment Inc more attractive for value investors when compared to the industry median at 1.23.

You can read more about Strong Global Entertainment 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.

VOXX International Corp’s Value Grade

Value Grade:

VOXX International Corporation is an international manufacturer and distributor in the automotive electronics, consumer electronics, and biometrics industries. The Company operates through three segments: Automotive Electronics, Consumer Electronics and Biometrics. The Automotive Electronics segment designs, manufactures, distributes and markets rear-seat entertainment devices, remote start systems, automotive security products and devices, vehicle access systems, mobile interface modules, mobile multimedia devices, and others. Consumer Electronics segment designs, manufactures, distributes and markets home theater systems, A/V receivers, premium loudspeakers, outdoor speakers, business music systems, streaming music systems, cinema speakers, architectural speakers, wireless and Bluetooth speakers and soundbars. Its Biometrics segment designs, markets and distributes iris identification and biometric security related products. The Company has a portfolio of approximately 35 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.

VOXX International Corp has a Value Score of 99, which is considered to be undervalued.

VOXX International Corp’s price-to-book ratio is higher than its peers. This could make VOXX International Corp less attractive for value investors when compared to the industry median at 1.23.

You can read more about VOXX International 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.

Other Household Electronics 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 Household Electronics stocks as well as other industrys.

Choosing Which of the 3 Best Household Electronics 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.

• Paragon Technologies Inc. stock has a Value Grade of B.
• Strong Global Entertainment Inc stock has a Value Grade of B.
• VOXX International Corp stock has a Value Grade of A.

Now that you have a bit more background about each of the 3 undervalued stocks in the Household Electronics 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 Household Electronics Stocks

Want to learn more about Household Electronics 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 Household Electronics Stocks for Friday, June 21
• 3 Undervalued Household Electronics Stocks for Friday, May 31
• 3 Undervalued Household Electronics Stocks for Friday, May 24
• 3 Undervalued Household Electronics Stocks for Thursday, May 23

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.