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 Auto & Truck Manufacturers 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 Manufacturers 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 Auto & Truck Manufacturers 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 Auto & Truck Manufacturers industry for Friday, July 12, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Auto & Truck Manufacturers 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.

Arcimoto Inc’s Value Grade

Value Grade:

Arcimoto, Inc. is engaged in the design, development, manufacturing, and sales of electric vehicles. The Company has introduced six vehicle products built on the first Arcimoto platform that target specific niches in the vehicle market. Its flagship product, the Fun Utility Vehicle (FUV), for everyday consumer trips; the Deliverator for last-mile delivery and general fleet utility; the Rapid Responder for emergency services and security; the Cameo for film, sports and influencers; the Arcimoto Roadster, an unparalleled electric on-road thrill machine; and the Flatbed, the Company's solution for a right sized pickup truck. The Company introduced a second vehicle platform prototype, and the first product concept on that platform, a class III e-trike codenamed the Mean Lean Machine. The Company is also selling their TRiO motorcycle upgrade kit through Tilting Motor Works, Inc., which transforms a traditional two-wheeled motorcycle into a leaning three-wheeled motorcycle.

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.

Arcimoto Inc has a Value Score of 73, which is considered to be undervalued.

When you look at Arcimoto Inc’s price-to-sales ratio at 0.16 compared to the industry median at 1.19, this company has a lower price relative to revenue compared to its peers. This could make Arcimoto 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. Arcimoto Inc’s shareholder yield is lower than its industry median ratio of (2.46%). 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. Arcimoto Inc’s price-to-book ratio is lower than its industry median ratio of 0.76. This could make Arcimoto Inc more attractive to investors looking for a new addition to their portfolio.

Niu Technologies - ADR’s Value Grade

Value Grade:

Niu Technologies is a China-based company mainly engaged in the manufacture of smart electric two-wheeled vehicles. The Company is mainly engaged in the design, manufacture and sales of high-performance motorcycles, scooters, bicycles and kick-scooters. The Company's products mainly include electric scooter and motorcycle series, NQi, MQi, UQi and Gova, electric kick-scooter series, KQi and e-bike series, NIU Aero. In addition, its products also include two high-performance motorcycle series, RQi and TQi, a hybrid motorcycle series, YQi and an e-bike series, BQi. The Company mainly operates in the domestic market .

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.

Niu Technologies - ADR has a Value Score of 66, which is considered to be undervalued.

Niu Technologies - ADR’s price-to-book ratio is lower than its peers. This could make Niu Technologies - ADR more attractive for value investors when compared to the industry median at 0.76.

You can read more about Niu Technologies - 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.

Nissan Motor Co Ltd (ADR)’s Value Grade

Value Grade:

NISSAN MOTOR CO.,LTD. is a Japan-based company mainly engaged in the manufacture and sale of automobiles and parts, as well as the provision of sales financial services. The Company operates through two business segments. The Automotive segment is engaged in the manufacture and sale of electric vehicles, compact cars, light cars, minivans, commercial vehicles, trucks, micro buses and other automobiles, as well as related parts. The Sales Finance segment is engaged in the sales finance business and the leasing business to support sales activities of automobile business.

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.

Nissan Motor Co Ltd (ADR) has a Value Score of 99, which is considered to be undervalued.

Nissan Motor Co Ltd (ADR)’s price-earnings ratio is 5.1 compared to the industry median at 11.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Nissan Motor Co Ltd (ADR) more attractive for value investors.

Nissan Motor Co Ltd (ADR)’s price-to-book ratio is higher than its peers. This could make Nissan Motor Co Ltd (ADR) less attractive for value investors when compared to the industry median at 0.76.

You can read more about Nissan Motor Co 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 Auto & Truck Manufacturers 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 Manufacturers stocks as well as other industrys.

Choosing Which of the 3 Best Auto & Truck Manufacturers 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.

• Arcimoto Inc stock has a Value Grade of B.
• Niu Technologies - ADR stock has a Value Grade of B.
• Nissan Motor Co Ltd (ADR) stock has a Value Grade of A.

Now that you have a bit more background about each of the 3 undervalued stocks in the Auto & Truck Manufacturers 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 Manufacturers Stocks

Want to learn more about Auto & Truck Manufacturers 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 Auto & Truck Manufacturers Stocks for Friday, July 12
• 4 Undervalued Auto & Truck Manufacturers Stocks for Thursday, July 11
• Why Harley-Davidson Inc’s (HOG) Stock Is Up 5.46%
• Why Xpeng Inc - ADR’s (XPEV) Stock Is Up 7.68%

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.