Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 5 stocks made the list for top value stocks in the Business Support Services 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 Business Support Services 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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5 Undervalued Business Support Services Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 5 undervalued stocks in the Business Support Services industry for Wednesday, August 07, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Business Support Services 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.

ABM Industries Inc’s Value Grade

Value Grade:

ABM Industries Incorporated, which operates through its subsidiaries, is a provider of integrated facility, infrastructure, and mobility solutions. Its segments include Business & Industry (B&I;), Manufacturing & Distribution (M&D;), Education, Aviation, and Technical Solutions. The B&I; segment encompasses janitorial, facilities engineering, and parking services for commercial real estate properties, sports and entertainment venues, and other facilities. The M&D; segment provides integrated facility services, engineering, janitorial, and other specialized services. The Education segment delivers janitorial, custodial, landscaping and grounds, facilities engineering, and parking services. The Aviation segment supports airlines and airports with services ranging from parking and janitorial to passenger assistance, catering logistics, air cabin maintenance, and transportation. The Technical Solutions segment specializes in facility infrastructure, mechanical and electrical 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.

ABM Industries Inc has a Value Score of 83, which is considered to be undervalued.

When you look at ABM Industries Inc’s price-to-sales ratio at 0.40 compared to the industry median at 1.62, this company has a lower price relative to revenue compared to its peers. This could make ABM Industries Inc’s stock more attractive for value investors.

ABM Industries Inc’s price-earnings ratio is 13.63 compared to the industry median at 23.91. This means it has a lower share price relative to earnings compared to its peers. This could make ABM Industries Inc more attractive for value investors.

Now, let’s assess ABM Industries Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 7.7, when compared to the industry median of 11.2, 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. ABM Industries Inc’s shareholder yield is higher 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. ABM Industries Inc’s price-to-book ratio is lower than its industry median ratio of 2.84. This could make ABM Industries Inc more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at ABM Industries Inc’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. ABM Industries Inc’s price-to-free-cash-flow ratio is lower than its industry median ratio of 16.70. This could make ABM Industries Inc more attractive because the lower P/FCF ratio indicates that ABM Industries 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.

Corecivic Inc’s Value Grade

Value Grade:

CoreCivic, Inc. is a diversified, government-solutions company. The Company provides a broad range of solutions to government partners that serve the public good through corrections and detention management. Its segments include CoreCivic Safety, CoreCivic Community, and CoreCivic Properties. CoreCivic Safety segment consists of approximately 43 correctional and detention facilities that are owned, or controlled via a long-term lease, and managed by CoreCivic, as well as those correctional and detention facilities owned by third parties but managed by CoreCivic. CoreCivic Safety also includes the operating results of its subsidiary that provides transportation services to governmental agencies, TransCor America, LLC. CoreCivic Community segment consists of the residential reentry centers that are owned, or controlled via a long-term lease, and managed by CoreCivic. CoreCivic Properties segment consists of the real estate properties owned by CoreCivic and leased to government agencies.

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.

Corecivic Inc has a Value Score of 77, which is considered to be undervalued.

Corecivic Inc’s price-earnings ratio is 21.5 compared to the industry median at 23.9. This means that it has a lower price relative to its earnings compared to its peers. This makes Corecivic Inc more attractive for value investors.

Corecivic Inc’s price-to-book ratio is higher than its peers. This could make Corecivic Inc less attractive for value investors when compared to the industry median at 2.84.

You can read more about Corecivic 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.

Multi Ways Holdings Ltd’s Value Grade

Value Grade:

Multi Ways Holdings Limited is a holding company. The Company, through its subsidiaries, is primarily engaged in the sale and rental of heavy construction equipment in Singapore and the surrounding region. The Company offers a variety of new and used heavy construction equipment for sale and rental by its customers range from earth-moving equipment such as bulldozers, off-terrain dump trucks, excavators and wheel loaders; material-handling equipment such as crawler cranes, rough terrain cranes, scissor lifts, forklifts, boom-lifts and telescopic handlers; road-building equipment such as motor graders, vibrating compactors, asphalt finishers, skid loaders, backhoe loaders, hand rollers and mini excavators, and generators and compressors, such as air compressors, generators, lighting towers and welding machines. It also offers services to its customers, such as servicing and maintenance services for heavy construction equipment, and customization of heavy construction equipment.

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.

Multi Ways Holdings Ltd has a Value Score of 99, which is considered to be undervalued.

Multi Ways Holdings Ltd’s price-earnings ratio is 5.3 compared to the industry median at 23.9. This means that it has a lower price relative to its earnings compared to its peers. This makes Multi Ways Holdings Ltd more attractive for value investors.

Multi Ways Holdings Ltd’s price-to-book ratio is higher than its peers. This could make Multi Ways Holdings Ltd less attractive for value investors when compared to the industry median at 2.84.

You can read more about Multi Ways Holdings 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.

Pharma-Bio Serv Inc’s Value Grade

Value Grade:

Pharma-Bio Serv, Inc. is a compliance and technology transfer services consulting company. The Company operates through four segments: Puerto Rico technical compliance consulting, United States technical compliance consulting, Europe technical compliance consulting, and Puerto Rico microbiological and chemical laboratory testing division (Lab). The Company provides a range of compliance-related consulting services. The Company provides microbiological testing services and chemical testing services through its laboratory testing facility in Puerto Rico. The Company's technical consulting services include regulatory compliance, validation, technology transfer, engineering, project management and process support. The Company markets its services to pharmaceutical, chemical, biotechnology, medical devices, cosmetic and food industries, and allied products companies in Puerto Rico, the United States, Europe and Brazil.

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.

Pharma-Bio Serv Inc has a Value Score of 72, which is considered to be undervalued.

Pharma-Bio Serv Inc’s price-to-book ratio is higher than its peers. This could make Pharma-Bio Serv Inc less attractive for value investors when compared to the industry median at 2.84.

You can read more about Pharma-Bio Serv 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.

Willis Lease Finance Corporation’s Value Grade

Value Grade:

Willis Lease Finance Corporation, along with its subsidiaries, is a lessor and servicer of commercial aircraft and aircraft engines. The Company operates through two segments: Leasing and Related Operations, and Spare Parts Sales. The Leasing and Related Operations segment involves acquiring and leasing, primarily pursuant to operating leases, commercial aircraft, aircraft engines and other aircraft equipment and the selective purchase and resale of commercial aircraft engines and other aircraft equipment and other related businesses. The Spare Parts Sales segment involves the purchase and resale of after-market engine parts, whole engines, engine modules and portable aircraft components. The Spare Parts Sales segment also enables the Company to provide end-of-life solutions for surplus aircraft and engines, as well as manage the full lifecycle of its lease assets. Its subsidiaries include WEST Engine Funding LLC, Willis Aeronautical Services, Inc. and Willis Asset Management Limited.

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.

Willis Lease Finance Corporation has a Value Score of 68, which is considered to be undervalued.

Willis Lease Finance Corporation’s price-earnings ratio is 11.0 compared to the industry median at 23.9. This means that it has a lower price relative to its earnings compared to its peers. This makes Willis Lease Finance Corporation more attractive for value investors.

Willis Lease Finance Corporation’s price-to-book ratio is higher than its peers. This could make Willis Lease Finance Corporation less attractive for value investors when compared to the industry median at 2.84.

You can read more about Willis Lease Finance Corporation’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 Business Support Services 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 Business Support Services stocks as well as other industrys.

Choosing Which of the 5 Best Business Support Services 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.

• ABM Industries Inc stock has a Value Grade of A.
• Corecivic Inc stock has a Value Grade of B.
• Multi Ways Holdings Ltd stock has a Value Grade of A.
• Pharma-Bio Serv Inc stock has a Value Grade of B.
• Willis Lease Finance Corporation stock has a Value Grade of B.

Now that you have a bit more background about each of the 5 undervalued stocks in the Business Support Services 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 Business Support Services Stocks

Want to learn more about Business Support Services 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.

• 5 Undervalued Business Support Services Stocks for Wednesday, August 07
• 7 Undervalued Business Support Services Stocks for Tuesday, August 06
• What You Need to Know About Hackett Group Inc's Q2 Earnings
• What You Need to Know About Nuvei Corp's Q2 Earnings

AAII Disclaimer

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