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 Communications & Networking 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 Communications & Networking 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 Communications & Networking 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 Communications & Networking industry for Tuesday, July 09, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Communications & Networking 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.

Amplitech Group Inc’s Value Grade

Value Grade:

AmpliTech Group, Inc. is engaged in designing, engineering, and assembling micro-wave component-based amplifiers. Its divisions include Specialty Microwave, Spectrum Semiconductor Materials, AmpliTech Group MMIC Design Center (AGMDC) and AmpliTech Group True G Speed Services (AGTGSS). Its products consist of radio frequency (RF) amplifiers and related subsystems, operating at multiple frequencies from 50 kilohertz (kHz) to 44 gigahertz (GHz), and custom assembly designs for the global satellite communications, telecom (5G & IoT), space, defense, and quantum computing markets. Its Specialty Microwave division designs and manufactures satellite communication (SATCOM) microwave components, RF subsystems and specialized electronic assemblies for the military and commercial markets and more. AGMDC designs, develops and manufactures signal processing components for satellites. AGTGSS division provides managed services, cybersecurity, cloud services, data sciences and telco cloud services.

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.

Amplitech Group Inc has a Value Score of 81, which is considered to be undervalued.

When you look at Amplitech Group Inc’s price-to-sales ratio at 0.74 compared to the industry median at 1.14, this company has a lower price relative to revenue compared to its peers. This could make Amplitech Group Inc’s stock more attractive for value investors.

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. Amplitech Group Inc’s shareholder yield is lower than its industry median ratio of (0.71%). 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. Amplitech Group Inc’s price-to-book ratio is lower than its industry median ratio of 1.77. This could make Amplitech Group Inc more attractive to investors looking for a new addition to their portfolio.

Clearone Inc’s Value Grade

Value Grade:

ClearOne, Inc. is a global company enabling conferencing, collaboration, and network streaming solutions. The Company designs, develops and sells conferencing, collaboration and network streaming solutions for voice and visual communications. The Company's products are categorized into Audio conferencing, Professional microphones, and Video products. Audio conferencing includes installed DSP based professional audio conferencing, universal serial bus (USB)-based speakerphones and table-top audio conferencing. Professional microphones consist of patented beamforming microphones, ceiling microphones and wireless microphones. Video products include video collaboration and audio-visual networking. Its professional conferencing products include the CONVERGE Pro 2 and CONVERGE Pro 2 SR product lines. Media Collaboration suite of products is led by its comprehensive portfolio of COLLABORATE branded video conferencing and collaboration 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.

Clearone Inc has a Value Score of 81, which is considered to be undervalued.

Clearone Inc’s price-to-book ratio is higher than its peers. This could make Clearone Inc less attractive for value investors when compared to the industry median at 1.77.

You can read more about Clearone 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.

Commscope Holding Company Inc’s Value Grade

Value Grade:

CommScope Holding Company, Inc. is a global provider of infrastructure solutions for communication, data center and entertainment networks. Its segments include Connectivity and Cable Solutions (CCS), Outdoor Wireless Networks (OWN), Networking, Intelligent Cellular and Security Solutions (NICS), and Access Network Solutions (ANS). The CCS segment provides fiber optic and copper connectivity and cable solutions for use in telecommunications, cable television, residential broadband networks, data centers and business enterprises. The OWN segment includes base station antennas, radio frequency filters, tower connectivity, microwave antennas, metro cell products, cabinets, steel, accessories and the wireless spectrum management business, Comsearch. The NICS segment provides wireless networks for enterprises and service providers. The ANS segment’s product solutions include cable modem termination systems, video infrastructure, distribution and transmission equipment and cloud 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.

Commscope Holding Company Inc has a Value Score of 82, which is considered to be undervalued.

You can read more about Commscope Holding Company 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.

Gilat Satellite Networks Ltd.’s Value Grade

Value Grade:

Gilat Satellite Networks Ltd. is an Israel-based provider of satellite-based broadband communications. The Company operates through three segments: Commercial, Mobility, and Services divisions. The Company designs and manufactures satellite ground segment and networking communications equipment, which it sells to its customers either as network components (modems, Block Up converters (BUCs), antennas) or as complete network solutions (which include hubs and related terminals and services) or turnkey projects. The equipment that the Company develops includes commercial Very Small Aperture Terminals (VSAT) systems, defense and homeland security satellite communications systems, solid-state power amplifiers (SSPAs), BUCs, low-profile antennas, on-the-move/on-the-pause terminals, and modems. The Company's equipment is used by satellite operators, service providers, telecommunications operators, system integrators, government and defense organizations, large corporations, and enterprises.

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.

Gilat Satellite Networks Ltd. has a Value Score of 79, which is considered to be undervalued.

Gilat Satellite Networks Ltd.’s price-earnings ratio is 11.1 compared to the industry median at 24.7. This means that it has a lower price relative to its earnings compared to its peers. This makes Gilat Satellite Networks Ltd. more attractive for value investors.

Gilat Satellite Networks Ltd.’s price-to-book ratio is higher than its peers. This could make Gilat Satellite Networks Ltd. less attractive for value investors when compared to the industry median at 1.77.

You can read more about Gilat Satellite Networks Ltd.’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.

Sonim Technologies Inc’s Value Grade

Value Grade:

Sonim Technologies, Inc. provides ultra-rugged, rugged and consumer durable mobile devices, including phones, wireless Internet data devices, tablets and accessories designed to provide extra protection for users. It sells its ruggedized mobility solutions to several of the wireless carriers in the United States, including AT&T;, T-Mobile and Verizon and three wireless carriers in Canada-Bell, Rogers and TELUS Mobility. Its ruggedized phones and accessories are sold through distributors in North America and Europe. Its devices and accessories connect users with voice, data, workflow and lifestyle applications that enhance the user experience while providing an extra level of protection. Its solutions include ultra-rugged mobile phones capable of connecting to both public and private wireless networks, industrial-grade accessories that meet specific application requirements and software applications and cloud-based tools that provide management and deployment services to its 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.

Sonim Technologies Inc has a Value Score of 63, which is considered to be undervalued.

Sonim Technologies Inc’s price-to-book ratio is higher than its peers. This could make Sonim Technologies Inc less attractive for value investors when compared to the industry median at 1.77.

You can read more about Sonim 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.

Vtech Holdings Ltd (ADR)’s Value Grade

Value Grade:

VTech Holdings Limited is a Hong Kong-based investment holding company principally engaged in electronic products-related businesses. Its main businesses include the design, manufacture and distribution of consumer electronic products, such as electronic education toys and phones, among others. The Company operates through four geographical segments, including North America, Europe, Asia Pacific and Others.

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.

Vtech Holdings Ltd (ADR) has a Value Score of 82, which is considered to be undervalued.

Vtech Holdings Ltd (ADR)’s price-earnings ratio is 11.3 compared to the industry median at 24.7. This means that it has a lower price relative to its earnings compared to its peers. This makes Vtech Holdings Ltd (ADR) more attractive for value investors.

Vtech Holdings Ltd (ADR)’s price-to-book ratio is lower than its peers. This could make Vtech Holdings Ltd (ADR) more attractive for value investors when compared to the industry median at 1.77.

You can read more about Vtech Holdings 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.

Other Communications & Networking 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 Communications & Networking stocks as well as other industrys.

Choosing Which of the 6 Best Communications & Networking 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.

• Amplitech Group Inc stock has a Value Grade of A.
• Clearone Inc stock has a Value Grade of A.
• Commscope Holding Company Inc stock has a Value Grade of A.
• Gilat Satellite Networks Ltd. stock has a Value Grade of B.
• Sonim Technologies Inc stock has a Value Grade of B.
• Vtech Holdings Ltd (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 Communications & Networking 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 Communications & Networking Stocks

Want to learn more about Communications & Networking 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 Communications & Networking Stocks for Tuesday, July 09
• 6 Undervalued Communications & Networking Stocks for Monday, July 08
• Why Viasat Inc’s (VSAT) Stock Is Up 5.35%
• 4 Undervalued Communications & Networking Stocks for Friday, July 05

AAII Disclaimer

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