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 Computer Hardware 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 Computer Hardware 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 Computer Hardware 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 Computer Hardware industry for Friday, August 16, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Computer Hardware 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.

AstroNova Inc’s Value Grade

Value Grade:

AstroNova, Inc. designs, manufactures, distributes, and services a range of products that acquire, store, analyze, and present data in multiple formats. The Company operates through two segments: Product Identification (PI) and Test & Measurement (T&M;). The PI segment provides an array of digital, end-to-end product marking and identification solutions, including hardware, software, and supplies for original equipment manufacturers (OEMs), commercial printers, and brand owners. The T&M; segment provides products designed for airborne printing solutions, avionics, and data acquisition. Its aerospace products include flight deck printing solutions, networking hardware, and specialized aerospace-grade supplies. Its data acquisition systems are used in research and development, flight testing, missile and rocket telemetry production monitoring, power, and maintenance applications. The Company also offers advanced digital solutions for textiles, packaging, and labeling.

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.

AstroNova Inc has a Value Score of 65, which is considered to be undervalued.

When you look at AstroNova Inc’s price-to-sales ratio at 0.73 compared to the industry median at 0.87, this company has a lower price relative to revenue compared to its peers. This could make AstroNova Inc’s stock more attractive for value investors.

AstroNova Inc’s price-earnings ratio is 21.42 compared to the industry median at 25.35. This means it has a lower share price relative to earnings compared to its peers. This could make AstroNova Inc more attractive for value investors.

Now, let’s assess AstroNova Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 8.7, when compared to the industry median of 13.3, 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. AstroNova Inc’s shareholder yield is lower than its industry median ratio of (0.21%). 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. AstroNova Inc’s price-to-book ratio is lower than its industry median ratio of 1.26. This could make AstroNova Inc more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at AstroNova Inc’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. AstroNova Inc’s price-to-free-cash-flow ratio is lower than its industry median ratio of 17.55. This could make AstroNova Inc more attractive because the lower P/FCF ratio indicates that AstroNova 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.

Ebang International Holdings Inc’s Value Grade

Value Grade:

Ebang International Holdings Inc. is a global blockchain technology and fintech company. The Company principally engages in manufacturing and selling high-performance bitcoin mining machines and telecommunication products and provides financial technology services through independently developed fintech service platforms. The Company has application-specific integrated circuit (ASIC) chip design capability. The Company designs non-functional integrated circuits (IC) and ICs. It has technology for designing ASIC chips, channels for obtaining third-party wafer casting capabilities, and capabilities for producing blockchain products. It has two cryptocurrency exchange platforms and one cross-border payment and foreign exchange platform. The Company also provides telecommunication products and management and maintenance services. Its transmission network products include ETN5000, ETN200, ETN200-E, ETN204G, and EB-MSAP.

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.

Ebang International Holdings Inc has a Value Score of 80, which is considered to be undervalued.

Ebang International Holdings Inc’s price-to-book ratio is higher than its peers. This could make Ebang International Holdings Inc less attractive for value investors when compared to the industry median at 1.26.

You can read more about Ebang International 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.

HP Inc’s Value Grade

Value Grade:

HP Inc. is a global provider of personal computing and other digital access devices, imaging and printing products, and related technologies, solutions, and services. The Company delivers a range of devices, services and subscriptions for personal computing, printing, three-dimensional (3D) printing, hybrid work, gaming, and more. It operates through three segments: Personal Systems, Printing and Corporate Investments. The Personal Systems segment offers commercial and consumer desktops and notebooks, detachables and convertibles, workstations, thin clients, commercial mobility devices, retail point-of-sale (POS) systems, displays, hybrid systems, software, solutions, and services. Printing segment offers consumer and commercial printer hardware, supplies, services, and solutions. Printing segment is also focused on graphics and 3D printing and personalization in the commercial and industrial markets. Corporate Investments include certain business incubation and investment projects.

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.

HP Inc has a Value Score of 84, which is considered to be undervalued.

HP Inc’s price-earnings ratio is 12.0 compared to the industry median at 25.4. This means that it has a lower price relative to its earnings compared to its peers. This makes HP Inc more attractive for value investors.

You can read more about HP 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 Computer Hardware 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 Computer Hardware stocks as well as other industrys.

Choosing Which of the 3 Best Computer Hardware 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.

• AstroNova Inc stock has a Value Grade of B.
• Ebang International Holdings Inc stock has a Value Grade of B.
• HP Inc stock has a Value Grade of A.

Now that you have a bit more background about each of the 3 undervalued stocks in the Computer Hardware 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 Computer Hardware Stocks

Want to learn more about Computer Hardware 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 Computer Hardware Stocks for Friday, August 16
• Why Corsair Gaming Inc’s (CRSR) Stock Is Up 5.65%
• Why Dell Technologies Inc’s (DELL) Stock Is Up 7.05%
• Why Hewlett Packard Enterprise Co’s (HPE) Stock Is Up 5.51%

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.