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 Environmental Services & Equipment 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 Environmental Services & Equipment 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 Environmental Services & Equipment 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 Environmental Services & Equipment industry for Wednesday, August 21, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Environmental Services & Equipment 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.

Ambipar Emergency Response’s Value Grade

Value Grade:

Ambipar Emergency Response is a Brazil-based holding company. It operates through numerous subsidiaries, including Braemar Response Ltd, Dracares Apoio Maritimo e Portuario Ltda and Suatrans Emergancia SA. The Company provides the customers with a full suite of environmental services organized around prevention, training and emergency response on all transportation modes. Ambipar's portfolio includes a broad variety of services such as environmental remediation, industrial field services, industrial cleaning of chemical and non-chemical products and of hazardous and non-hazardous waste, consulting services focused on accident prevention and environmental licensing. The Company's customer portfolio ranges from local to blue chip and multinational companies operating in a wide range of industries, including chemicals, pulp and paper, mining, oil and gas, logistics, power, steel, meatpacking and cement, among others. The Company is present in 16 countries in Latin America and Europe.

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.

Ambipar Emergency Response has a Value Score of 65, which is considered to be undervalued.

When you look at Ambipar Emergency Response’s price-to-sales ratio at 0.63 compared to the industry median at 2.07, this company has a lower price relative to revenue compared to its peers. This could make Ambipar Emergency Response’s stock more attractive for value investors.

Ambipar Emergency Response’s price-earnings ratio is 24.06 compared to the industry median at 34.31. This means it has a lower share price relative to earnings compared to its peers. This could make Ambipar Emergency Response more attractive for value investors.

Now, let’s assess Ambipar Emergency Response’s EV/EBITDA ratio, also known as enterprise multiple. At 5.6, when compared to the industry median of 15.9, 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. Ambipar Emergency Response’s shareholder yield is higher than its industry median ratio of (0.66%). 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. Ambipar Emergency Response’s price-to-book ratio is lower than its industry median ratio of 3.07. This could make Ambipar Emergency Response more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Ambipar Emergency Response’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Ambipar Emergency Response’s price-to-free-cash-flow ratio is lower than its industry median ratio of 35.12. This could make Ambipar Emergency Response more attractive because the lower P/FCF ratio indicates that Ambipar Emergency Response 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.

Aris Water Solutions Inc’s Value Grade

Value Grade:

Aris Water Solutions, Inc. is an environmental infrastructure and solutions company. The Company helps customers reduce their water and carbon footprints. It delivers full-cycle water handling and recycling solutions for energy operations. Its integrated pipelines and related infrastructure create produced water management, recycling, and supply solutions to operators in the core areas of the Permian Basin. It manages its business through two streams: Produced Water Handling and Water Solutions. Its Produced Water Handling business gathers, transports and, unless recycled, handles produced water generated from oil and natural gas production. The Company’s Water Solutions business develops and operates recycling facilities to treat, store and recycle produced water. It has approximately 745 miles of produced water pipeline, which includes approximately 550 miles of larger diameter pipelines and 66 produced water handling facilities and operates 23 produced water recycling.

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.

Aris Water Solutions Inc has a Value Score of 61, which is considered to be undervalued.

Aris Water Solutions Inc’s price-earnings ratio is 21.1 compared to the industry median at 34.3. This means that it has a lower price relative to its earnings compared to its peers. This makes Aris Water Solutions Inc more attractive for value investors.

Aris Water Solutions Inc’s price-to-book ratio is higher than its peers. This could make Aris Water Solutions Inc less attractive for value investors when compared to the industry median at 3.07.

You can read more about Aris Water Solutions 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.

Avalon Holdings Corp’s Value Grade

Value Grade:

Avalon Holdings Corporation is primarily engaged in providing waste management services and golf and related operations. The Company's waste management services segment includes waste disposal brokerage and management services, captive landfill management operations and saltwater injection well operations. The waste management services segment is provided to industrial, commercial, municipal and governmental customers primarily in selected northeastern and midwestern United States markets. The Company's golf and related operations segment includes the operation and management of four golf courses and related clubhouses, a hotel, fitness centers, tennis courts, a salon and spa services, dining, banquet, and conference facilities. The Company's subsidiaries include American Landfill Management, Inc., American Waste Management Services, Inc., AWMS Water Solutions, LLC, Avalon Med Spa, LLC., and Avalon Clubs and Resorts, Inc., among others.

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.

Avalon Holdings Corp has a Value Score of 75, which is considered to be undervalued.

Avalon Holdings Corp’s price-earnings ratio is 338.7 compared to the industry median at 34.3. This means that it has a higher price relative to its earnings compared to its peers. This makes Avalon Holdings Corp less attractive for value investors.

Avalon Holdings Corp’s price-to-book ratio is higher than its peers. This could make Avalon Holdings Corp less attractive for value investors when compared to the industry median at 3.07.

You can read more about Avalon Holdings 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.

Pacific Green Technologies Inc’s Value Grade

Value Grade:

Pacific Green Technologies, Inc. is engaged in the business of acquiring, developing, and marketing environmental technologies, with a focus on emission control technologies. Working with a network of agents to market the ENVI-Systems emission control technologies, the Company has focused on three applications of the technology, which includes ENVI-Marine, ENVI-Pure, and ENVI-Clean. ENVI-Marine is a scrubber that can be applied to diesel exhaust emissions that require sulfur and particulate matter abatement. ENVI-Pure is for removing acid gases, particulate matter, dioxins, VOCs, and other regulated hazardous air pollutants from the flue gases produced by the combustion of coal, biomass, diesel and other fuels. The Company’s technological solutions consist of three main divisions: Emission Control Systems (ECS), Concentrated Solar Power (CSP), and Battery Energy Storage Systems (BESS). Its subsidiaries include Pacific Green Innoergy Technologies Ltd., Sheaf Energy Ltd, and others.

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.

Pacific Green Technologies Inc has a Value Score of 87, which is considered to be undervalued.

Pacific Green Technologies Inc’s price-earnings ratio is 3.1 compared to the industry median at 34.3. This means that it has a lower price relative to its earnings compared to its peers. This makes Pacific Green Technologies Inc more attractive for value investors.

Pacific Green Technologies Inc’s price-to-book ratio is higher than its peers. This could make Pacific Green Technologies Inc less attractive for value investors when compared to the industry median at 3.07.

You can read more about Pacific Green Technologies 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 Environmental Services & Equipment 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 Environmental Services & Equipment stocks as well as other industrys.

Choosing Which of the 4 Best Environmental Services & Equipment 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.

• Ambipar Emergency Response stock has a Value Grade of B.
• Aris Water Solutions Inc stock has a Value Grade of B.
• Avalon Holdings Corp stock has a Value Grade of B.
• Pacific Green Technologies Inc stock has a Value Grade of A.

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

Want to learn more about Environmental Services & Equipment 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 Environmental Services & Equipment Stocks for Wednesday, August 21
• 3 Undervalued Environmental Services & Equipment Stocks for Friday, August 16
• Why CECO Environmental Corp.’s (CECO) Stock Is Up 4.25%
• 3 Undervalued Environmental Services & Equipment Stocks for Wednesday, August 14

AAII Disclaimer

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