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 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.

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6 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 6 undervalued stocks in the Auto, Truck & Motorcycle Parts industry for Friday, June 28, 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.

American Axle & Manufacturing Hldngs Inc’s Value Grade

Value Grade:

American Axle & Manufacturing Holdings, Inc. is an automotive and mobility supplier. The Company designs, engineers and manufactures driveline and metal forming technologies to support electric, hybrid and internal combustion vehicles. The Company operates through two segments: Driveline and Metal Forming. Driveline products consist primarily of front and rear axles, driveshafts, differential assemblies, clutch modules, balance shaft systems, disconnecting driveline technology, and electric and hybrid driveline products and systems for light trucks, sport utility vehicles (SUVs), crossover utility vehicles (CUVs), passenger cars and commercial vehicles. Its Metal Forming products consist primarily of engine, transmission, driveline and safety-critical components for traditional internal combustion engine and electric vehicle architectures including light vehicles, commercial vehicles, and off-highway vehicles, as well as products for industrial markets.

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.

American Axle & Manufacturing Hldngs Inc has a Value Score of 86, which is considered to be undervalued.

When you look at American Axle & Manufacturing Hldngs Inc’s price-to-sales ratio at 0.13 compared to the industry median at 0.51, this company has a lower price relative to revenue compared to its peers. This could make American Axle & Manufacturing Hldngs Inc’s stock more attractive for value investors.

Now, let’s assess American Axle & Manufacturing Hldngs Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 4.6, when compared to the industry median of 6.8, 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. American Axle & Manufacturing Hldngs Inc’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. American Axle & Manufacturing Hldngs Inc’s price-to-book ratio is higher than its industry median ratio of 1.24. This could make American Axle & Manufacturing Hldngs Inc less attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at American Axle & Manufacturing Hldngs Inc’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. American Axle & Manufacturing Hldngs Inc’s price-to-free-cash-flow ratio is lower than its industry median ratio of 13.72. This could make American Axle & Manufacturing Hldngs Inc more attractive because the lower P/FCF ratio indicates that American Axle & Manufacturing Hldngs Inc 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.

Magna International Inc (USA)’s Value Grade

Value Grade:

Magna International Inc. is a Canada-based global automotive supplier. The Company has complete vehicle engineering and contract manufacturing expertise, as well as product capabilities which include body, chassis, exterior, seating, powertrain, active driver assistance, electronics, mechatronics, mirrors, lighting, and roof systems. Its Veoneer Active Safety provides sensor, software and systems engineering solutions to a range of customers. The Company's segments include Body Exteriors & Structures; Power & Vision; Seating Systems; and Complete Vehicles. Its Body Exteriors & Structures include body structures, chassis structures, exterior, energy storage systems and other. Its Power & Vision products include electrified powertrain technologies, powertrain subsystems and other. Its Complete Vehicles consist of complete vehicle engineering and complete vehicle manufacturing. The Company's global network includes 341 manufacturing operations and 88 product development.

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.

Magna International Inc (USA) has a Value Score of 71, which is considered to be undervalued.

Magna International Inc (USA)’s price-earnings ratio is 11.8 compared to the industry median at 15.1. This means that it has a lower price relative to its earnings compared to its peers. This makes Magna International Inc (USA) more attractive for value investors.

Magna International Inc (USA)’s price-to-book ratio is higher than its peers. This could make Magna International Inc (USA) less attractive for value investors when compared to the industry median at 1.24.

You can read more about Magna International Inc (USA)’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 85, which is considered to be undervalued.

Phinia Inc’s price-earnings ratio is 18.9 compared to the industry median at 15.1. 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 1.24.

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.

Standard Motor Products Inc’s Value Grade

Value Grade:

Standard Motor Products, Inc. is a manufacturer and distributor of replacement parts in the automotive aftermarket and a custom-engineered solutions provider to vehicle and equipment manufacturers in diverse non-aftermarket end markets. Its Vehicle Control Segment services its core automotive aftermarket customers through its offering of replacement parts within the product groups: Engine Management, Electrical and Safety and Wire Sets and Other. Its Temperature Control Segment also services its core automotive aftermarket customers through its offering of replacement parts within the various product groups: AC System Components and Other Thermal Components. Its Engineered Solutions Segment services its vehicle and equipment manufacturing customers across diverse global end markets, including on-highway and off-highway applications such as commercial and light vehicles, construction, agriculture, power sports, marine, hydraulics and lawn and garden.

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.

Standard Motor Products Inc has a Value Score of 88, which is considered to be undervalued.

Standard Motor Products Inc’s price-earnings ratio is 10.1 compared to the industry median at 15.1. This means that it has a lower price relative to its earnings compared to its peers. This makes Standard Motor Products Inc more attractive for value investors.

Standard Motor Products Inc’s price-to-book ratio is higher than its peers. This could make Standard Motor Products Inc less attractive for value investors when compared to the industry median at 1.24.

You can read more about Standard Motor Products 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.

Strattec Security Corp’s Value Grade

Value Grade:

Strattec Security Corporation designs, develops, manufactures and markets automotive access control products. The Company’s products include mechanical locks and keys, electronically enhanced locks and keys, passive entry passive start systems (PEPS), steering column and instrument panel ignition lock housings, latches, power sliding side door systems, power tailgate systems, power lift gate systems, power deck lid systems, door handles, and related products. The Company provides its products primarily to North American automotive customers. The Company’s products and solutions portfolio includes Vehicle Access Solutions, Electronic Security Solutions, Vehicle Security Solutions, Dealer Direct Fulfillment Services, Aftermarket, BOLT and STRATTEC Advance Logic-Via GoKeyless. Its products are shipped to customer locations in the United States, Canada, Mexico, Europe, South America, Korea, China and India.

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.

Strattec Security Corp has a Value Score of 79, which is considered to be undervalued.

Strattec Security Corp’s price-earnings ratio is 26.0 compared to the industry median at 15.1. This means that it has a higher price relative to its earnings compared to its peers. This makes Strattec Security Corp less attractive for value investors.

Strattec Security Corp’s price-to-book ratio is higher than its peers. This could make Strattec Security Corp less attractive for value investors when compared to the industry median at 1.24.

You can read more about Strattec Security 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.

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 91, which is considered to be undervalued.

Titan International Inc’s price-earnings ratio is 7.8 compared to the industry median at 15.1. 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 1.24.

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 6 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.

• American Axle & Manufacturing Hldngs Inc stock has a Value Grade of A.
• Magna International Inc (USA) stock has a Value Grade of B.
• Phinia Inc stock has a Value Grade of A.
• Standard Motor Products Inc stock has a Value Grade of A.
• Strattec Security Corp stock has a Value Grade of B.
• Titan International Inc stock has a Value Grade of A.

Now that you have a bit more background about each of the 6 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.

• 6 Undervalued Auto, Truck & Motorcycle Parts Stocks for Friday, June 28
• 6 Undervalued Auto, Truck & Motorcycle Parts Stocks for Thursday, June 27
• 5 Undervalued Auto, Truck & Motorcycle Parts Stocks for Wednesday, June 26
• Why Aptiv PLC’s (APTV) Stock Is Down 7.93%

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