Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 4 stocks made the list for top value stocks in the Electronic Equipment & 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 Electronic Equipment & 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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4 Undervalued Electronic Equipment & Parts Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 4 undervalued stocks in the Electronic Equipment & Parts industry for Friday, July 19, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Electronic Equipment & 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.

Benchmark Electronics Inc’s Value Grade

Value Grade:

Benchmark Electronics, Inc. provides comprehensive solutions across the entire product life cycle through its technology and engineering design services, leveraging its global supply chain and delivering manufacturing services in various industries. The Company provides advanced manufacturing services (electronic manufacturing services (EMS) and precision technology (PT) services), which includes design and engineering services and technology solutions. Its specialization in packaging and interconnect technologies include printed circuit board assembly (PCBA) and test, component engineering services, systems assembly and test, and failure analysis. The Company offers complex PT services, including full electromechanical assembly and test services. Its design and engineering services and technology solutions include new product design, prototype, testing and related engineering services; custom test and automation equipment design and build services, and technology 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.

Benchmark Electronics Inc has a Value Score of 76, which is considered to be undervalued.

When you look at Benchmark Electronics Inc’s price-to-sales ratio at 0.53 compared to the industry median at 1.46, this company has a lower price relative to revenue compared to its peers. This could make Benchmark Electronics Inc’s stock more attractive for value investors.

Benchmark Electronics Inc’s price-earnings ratio is 22.65 compared to the industry median at 27.40. This means it has a lower share price relative to earnings compared to its peers. This could make Benchmark Electronics Inc more attractive for value investors.

Now, let’s assess Benchmark Electronics Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 6.5, when compared to the industry median of 13.0, 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. Benchmark Electronics Inc’s shareholder yield is higher than its industry median ratio of (1.05%). 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. Benchmark Electronics Inc’s price-to-book ratio is lower than its industry median ratio of 1.43. This could make Benchmark Electronics Inc more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Benchmark Electronics Inc’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Benchmark Electronics Inc’s price-to-free-cash-flow ratio is lower than its industry median ratio of 22.62. This could make Benchmark Electronics Inc more attractive because the lower P/FCF ratio indicates that Benchmark Electronics 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.

3D Systems Corp’s Value Grade

Value Grade:

3D Systems Corporation is an additive manufacturing solutions company. The Company is engaged in providing three-dimensional (3D) printing and digital manufacturing solutions, including 3D printers for plastics and metals, materials, software, and digital design tools. The Company’s segments include Healthcare Solutions and Industrial Solutions. Healthcare Solutions includes dental, medical devices, personalized health services and regenerative medicine. Industrial Solutions includes aerospace, defense, transportation and general manufacturing. The Company offers a range of 3D printing technologies, including Stereolithography (SLA), Selective Laser Sintering, Direct Metal Printing, MultiJet Printing, ColorJet Printing, polymer extrusion, and extrusion and SLA based bioprinting. The Company markets its products and services through subsidiaries in North America and South America, Europe and the Middle East and the Asia Pacific and Oceania region.

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.

3D Systems Corp has a Value Score of 69, which is considered to be undervalued.

3D Systems Corp’s price-to-book ratio is higher than its peers. This could make 3D Systems Corp less attractive for value investors when compared to the industry median at 1.43.

You can read more about 3D Systems 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.

IEH Corp’s Value Grade

Value Grade:

IEH Corporation designs, develops and manufactures printed circuit board connectors and custom interconnects for high performance applications. The Company designs and manufactures hyperboloid connectors that accommodate military and aerospace specification standards. It markets primarily to companies in defense, aerospace, space and industrial applications, in the United States, Canada, Europe, Southeast and Central Asia and the Mideast. Its hyperboloid products include PCB connectors, HBH Hybrid Power/Signal Hyperboloid Connectors, High Speed Series, Hyperboloid Contact, Custom Solutions and Value-Added Services. It serves customers in the United States and internationally. It manufactures PCB connector offerings for specialized applications and its customers include defense contractors, commercial aerospace equipment manufacturers, medical device manufacturers, oil and gas exploration firms, and commercial space launch companies. It sells both directly and through distributors.

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.

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

IEH Corp’s price-to-book ratio is higher than its peers. This could make IEH Corp less attractive for value investors when compared to the industry median at 1.43.

You can read more about IEH 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.

Velo3D Inc’s Value Grade

Value Grade:

Velo3D, Inc. is a metal three-dimensional (3D) printing technology company. The Company produces a fully integrated hardware and software solution based on its laser powder bed fusion (L-PBF) technology. Its technology enables the production of complex, mission-critical parts that existing additive manufacturing (AM) solutions cannot produce without the need for redesign or additional assembly. Its Sapphire family of systems (3D Printers) give its customers who are in space, aviation, defense, automotive, energy and industrial markets the freedom to design and produce metal parts with complex internal features. Its end-to-end solution includes the flow print preparation software, the Sapphire family of printers, and the Assure quality control system, all of which are powered by its Intelligent Fusion manufacturing process. Its customers are primarily original equipment manufacturers and contract manufacturers who look to AM to solve issues with metal parts manufacturing technologies.

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.

Velo3D Inc has a Value Score of 70, which is considered to be undervalued.

Velo3D Inc’s price-to-book ratio is higher than its peers. This could make Velo3D Inc less attractive for value investors when compared to the industry median at 1.43.

You can read more about Velo3D 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 Electronic Equipment & 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 Electronic Equipment & Parts stocks as well as other industrys.

Choosing Which of the 4 Best Electronic Equipment & 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.

• Benchmark Electronics Inc stock has a Value Grade of B.
• 3D Systems Corp stock has a Value Grade of B.
• IEH Corp stock has a Value Grade of B.
• Velo3D Inc stock has a Value Grade of B.

Now that you have a bit more background about each of the 4 undervalued stocks in the Electronic Equipment & 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 Electronic Equipment & Parts Stocks

Want to learn more about Electronic Equipment & 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.

• 4 Undervalued Electronic Equipment & Parts Stocks for Friday, July 19
• 4 Undervalued Electronic Equipment & Parts Stocks for Thursday, July 18
• Why Applied Optoelectronics Inc’s (AAOI) Stock Is Down 5.07%
• Why Fabrinet’s (FN) Stock Is Down 6.08%

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.