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 Tuesday, August 06, 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.

China Automotive Systems, Inc.’s Value Grade

Value Grade:

China Automotive Systems, Inc., (China Automotive) is a holding company. The Company, through its subsidiary, Great Genesis Holdings Limited (Genesis), owns interests in over eight Sino-joint ventures and over five subsidiaries in the People's Republic of China (PRC), which manufacture power steering systems and/or related products for various segments of the automobile industry. Genesis also owns interests in a Brazil-based trading company, which engages mainly in the import and sales of automotive parts in Brazil. Henglong USA Corporation (HLUSA), which is a subsidiary of the Company, engages in marketing of automotive parts in North America, and provides after sales service and research and development support. The Company's geographical segments include the United States, China and other foreign countries. One of its subsidiaries, Shenyang Jinbei Henglong Automotive Steering System Co., Ltd., focuses on power steering parts for light duty vehicles.

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.

China Automotive Systems, Inc. has a Value Score of 98, which is considered to be undervalued.

When you look at China Automotive Systems, Inc.’s price-to-sales ratio at 0.19 compared to the industry median at 0.54, this company has a lower price relative to revenue compared to its peers. This could make China Automotive Systems, Inc.’s stock more attractive for value investors.

China Automotive Systems, Inc.’s price-earnings ratio is 2.86 compared to the industry median at 14.60. This means it has a lower share price relative to earnings compared to its peers. This could make China Automotive Systems, Inc. more attractive for value investors.

Now, let’s assess China Automotive Systems, Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 3.3, when compared to the industry median of 6.1, 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. China Automotive Systems, Inc.’s shareholder yield is the same 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. China Automotive Systems, Inc.’s price-to-book ratio is lower than its industry median ratio of 1.14. This could make China Automotive Systems, Inc. more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at China Automotive Systems, Inc.’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. China Automotive Systems, Inc.’s price-to-free-cash-flow ratio is lower than its industry median ratio of 13.76. This could make China Automotive Systems, Inc. more attractive because the lower P/FCF ratio indicates that China Automotive Systems, 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.

Cooper-Standard Holdings Inc’s Value Grade

Value Grade:

Cooper-Standard Holdings Inc. is a manufacturer of sealing and fluid handling systems (consisting of fuel and brake delivery and fluid transfer systems). Its products are primarily for use in passenger vehicles and light trucks that are manufactured by global automotive original equipment manufacturers (OEMs) and replacement markets. It operates through four segments: North America, Europe, Asia Pacific, and South America. The Company’s product lines include sealing systems and fluid handling systems (consisting of fuel and brake delivery and fluid transfer systems). The Company's brands include FlushSeal, Gen III Posi-Lock, Easy-Lock, MagAlloy, Ergo-Lock +, PlastiCool and Fortrex. FlushSeal is an advanced integrated solution for frame under glass static sealing systems. Its Easy-Lock is a small package coolant and fuel vapor quick connect. Its MagAlloy is a processing technology for brake lines that increases long term durability through superior corrosion resistance.

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.

Cooper-Standard Holdings Inc has a Value Score of 74, which is considered to be undervalued.

You can read more about Cooper-Standard Holdings 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.

Dana Inc’s Value Grade

Value Grade:

Dana Incorporated is engaged in providing power-conveyance and energy-management solutions for vehicles and machinery. The Company's portfolio improves the efficiency, performance, and sustainability of light vehicles, commercial vehicles, and off-highway equipment. It offers axles, driveshafts, transmissions, sealing and thermal products to electrifications products including motors, inverters, controllers, e-sealing, e-thermal and digital solutions. The Company operates through four segments: Light Vehicle Drive Systems, Commercial Vehicle Drive and Motion Systems, Off-Highway Drive and Motion Systems, and Power Technologies. The Company owns and have licensed trademarks, such as Spicer Electrified, Victor Reinz, Long, Graziano and Dana TM4. The Company operates in North America, Europe, South America and Asia Pacific regions. Its North America includes Canada, Mexico and United States of America. Its Europe regions include Belgium, Netherlands, Germany and Hungary.

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.

Dana Inc has a Value Score of 72, which is considered to be undervalued.

Dana Inc’s price-to-book ratio is lower than its peers. This could make Dana Inc fairly attractive for value investors when compared to the industry median at 1.14.

You can read more about Dana 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.

Greenland Technologies Holding Corp’s Value Grade

Value Grade:

Greenland Technologies Holding Corporation is a developer and a manufacturer of drivetrain systems for material handling machineries and electric vehicles, as well as electric industrial vehicles. Through its subsidiaries, the Company offers transmission products, which are key components for forklift trucks used in manufacturing and logistic applications, such as factories, workshops, warehouses, fulfilment centers, shipyards, and seaports. It provides transmission systems and integrated powertrains for material handling machineries, particularly for electric forklift trucks. The range of the transmission systems covers machineries from one ton to 15 tons. It designs and develops powertrains, which integrates electric motor, speed reduction gearbox, and driving axles into a combined integral module. Through its subsidiary, HEVI Corp. (HEVI), the Company offers all-electric clean and sustainable alternatives to heavy-emission systems in the industrial heavy equipment industry.

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.

Greenland Technologies Holding Corp has a Value Score of 90, which is considered to be undervalued.

Greenland Technologies Holding Corp’s price-to-book ratio is higher than its peers. This could make Greenland Technologies Holding Corp less attractive for value investors when compared to the industry median at 1.14.

You can read more about Greenland Technologies Holding 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.

Motorcar Parts of America Inc’s Value Grade

Value Grade:

Motorcar Parts of America, Inc. is a supplier of automotive aftermarket non-discretionary replacement parts and test solutions and diagnostic equipment. Its Hard Parts segment includes light duty rotating electric products, such as alternators and starters, wheel hub products, brake-related products, including brake calipers, brake boosters, brake rotors, brake pads and brake master cylinders, and turbochargers. The Test Solutions and Diagnostic Equipment segment includes applications for combustion engine vehicles, including bench-top testers for alternators and starters, equipment for the pre- and post-production of electric vehicles, and software emulation of power system applications for the electrification of all forms of transportation (including automobiles, trucks, and electric vehicle charging stations). Its Heavy Duty segment includes non-discretionary automotive aftermarket replacement hard parts for heavy-duty truck, industrial, marine, and agricultural applications.

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.

Motorcar Parts of America Inc has a Value Score of 95, which is considered to be undervalued.

Motorcar Parts of America Inc’s price-to-book ratio is higher than its peers. This could make Motorcar Parts of America Inc less attractive for value investors when compared to the industry median at 1.14.

You can read more about Motorcar Parts of America 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.

Power Solutions International Inc’s Value Grade

Value Grade:

Power Solutions International, Inc. designs, engineers, manufactures, markets and sells a broad range of advanced, emission-certified engines and power systems that are powered by a wide variety of clean, alternative fuels, including natural gas, propane, and biofuels, as well as gasoline and diesel options, within the power systems, industrial and transportation end markets. The Company’s products are primarily used by global original equipment manufacturers (OEMs) and end user customers. The Company’s products include power systems, electric power generation (gensets), large custom genset enclosures, mobile and stationary gensets for: emergency standby, rental, prime power, demand response, microgrid, oil and gas, data center, renewable energy resiliency (wind, solar, storage), combined heat and power (CHP), industrial material handling, agricultural/arbor care, irrigation/pumps, construction, compressors, wood chippers, stump grinders, and sweepers/industrial scrubbers.

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.

Power Solutions International Inc has a Value Score of 77, which is considered to be undervalued.

Power Solutions International Inc’s price-earnings ratio is 8.7 compared to the industry median at 14.6. This means that it has a lower price relative to its earnings compared to its peers. This makes Power Solutions International Inc more attractive for value investors.

Power Solutions International Inc’s price-to-book ratio is lower than its peers. This could make Power Solutions International Inc more attractive for value investors when compared to the industry median at 1.14.

You can read more about Power Solutions 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.

• China Automotive Systems, Inc. stock has a Value Grade of A.
• Cooper-Standard Holdings Inc stock has a Value Grade of B.
• Dana Inc stock has a Value Grade of B.
• Greenland Technologies Holding Corp stock has a Value Grade of A.
• Motorcar Parts of America Inc stock has a Value Grade of A.
• Power Solutions International Inc stock has a Value Grade of B.

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 Tuesday, August 06
• 3 Undervalued Auto, Truck & Motorcycle Parts Stocks for Monday, August 05
• Why Mayville Engineering Company Inc’s (MEC) Stock Is Down 4.95%
• Why Stoneridge Inc’s (SRI) Stock Is Down 7.21%

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