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 Chemicals - Specialty 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 Chemicals - Specialty 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 Chemicals - Specialty 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 Chemicals - Specialty industry for Monday, September 09, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Chemicals - Specialty 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.

AdvanSix Inc’s Value Grade

Value Grade:

AdvanSix Inc. is a diversified chemistry company. It produces essential materials for its customers in a variety of end markets and applications, including building and construction, fertilizers, agrochemicals, plastics, solvents, packaging, paints, coatings, adhesives, and electronics. Its product lines include Nylon, Caprolactam, Ammonium Sulfate, and Chemical Intermediate. It sells its Nylon 6 resin globally, primarily under the Aegis brand name. Nylon 6 is a polymer resin, which is a synthetic material used by its customers to produce fibers, filaments, engineered plastics and films. Caprolactam is the monomer used in the production of Nylon 6 resin. Its ammonium sulfate is used by customers as a fertilizer containing nitrogen and sulfur, two key plant nutrients. It manufactures, markets, and sells a number of other chemical intermediate products, such as phenol, alpha-methyl styren, cyclohexanone, 2-pentanone oxime, cyclohexanol, sulfuric acid, ammonia and carbon dioxide.

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.

AdvanSix Inc has a Value Score of 63, which is considered to be undervalued.

When you look at AdvanSix Inc’s price-to-sales ratio at 0.48 compared to the industry median at 1.34, this company has a lower price relative to revenue compared to its peers. This could make AdvanSix Inc’s stock more attractive for value investors.

AdvanSix Inc’s price-earnings ratio is 88.63 compared to the industry median at 27.15. This means it has a higher share price relative to earnings compared to its peers. This could make AdvanSix Inc less attractive for value investors.

Now, let’s assess AdvanSix Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 9.4, when compared to the industry median of 10.7, 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. AdvanSix Inc’s shareholder yield is higher than its industry median ratio of 1.16%. 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. AdvanSix Inc’s price-to-book ratio is lower than its industry median ratio of 1.80. This could make AdvanSix Inc more attractive to investors looking for a new addition to their portfolio.

Celanese Corporation’s Value Grade

Value Grade:

Celanese Corporation is a global chemical and specialty materials company. It is a producer of engineered polymers that are used in a variety of applications. Its segments include Engineered Materials and Acetyl Chain. The Engineered Materials segment includes the engineered materials business and certain strategic affiliates. The Engineered Materials business develops, produces and supplies a portfolio of high-performance specialty polymers for automotive and medical applications, as well as industrial products and consumer electronics. The Acetyl Chain segment includes the integrated chain of intermediate chemistry, emulsion polymers, ethylene vinyl acetate polymers, redispersible powders (RDP), and acetate tow businesses. Its intermediate chemistry business produces and supplies acetyl products, including acetic acid, vinyl acetate monomer, acetic anhydride and acetate esters. It also produces organic solvents and intermediates for pharmaceutical, agricultural and chemical products.

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.

Celanese Corporation has a Value Score of 63, which is considered to be undervalued.

Celanese Corporation’s price-earnings ratio is 6.8 compared to the industry median at 27.2. This means that it has a lower price relative to its earnings compared to its peers. This makes Celanese Corporation more attractive for value investors.

Celanese Corporation’s price-to-book ratio is lower than its peers. This could make Celanese Corporation fairly attractive for value investors when compared to the industry median at 1.80.

You can read more about Celanese 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.

FUJIFILM Holdings Corp. (ADR)’s Value Grade

Value Grade:

FUJIFILM Holdings Corporation is engaged in the development, production, sales and service of imaging solutions, information solutions and document solutions. The Company's segments include Imaging Solutions, Information Solutions, Document Solutions and, Corporate expenses and eliminations. The Imaging Solutions segment consists of photo imaging, and optical device and electronic imaging products. The Information Solutions segment includes products used in medical systems, pharmaceuticals, regenerative medicine, life sciences, flat panel display (FPD) materials, industrial products, electronic materials, recording media and graphic systems. The Document Solutions segment includes office products, office printers, production services and global services. The Company's products include FUJI DRI-CHEM IMMUNO AG1, LASEREO, SYNAPSE Vendor Neutral Archive (VNA), FDR D-EVO II, SonoSite iViz, X FUJIFILM Index, FUJIFILM X-T2 and Instax Cameras Index.

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.

FUJIFILM Holdings Corp. (ADR) has a Value Score of 70, which is considered to be undervalued.

FUJIFILM Holdings Corp. (ADR)’s price-earnings ratio is 17.9 compared to the industry median at 27.2. This means that it has a lower price relative to its earnings compared to its peers. This makes FUJIFILM Holdings Corp. (ADR) more attractive for value investors.

FUJIFILM Holdings Corp. (ADR)’s price-to-book ratio is higher than its peers. This could make FUJIFILM Holdings Corp. (ADR) less attractive for value investors when compared to the industry median at 1.80.

You can read more about FUJIFILM Holdings Corp. (ADR)’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.

Tronox Holdings PLC’s Value Grade

Value Grade:

Tronox Holdings plc is a producer of titanium products, including titanium dioxide pigment, specialty-grade titanium dioxide products and high-purity titanium chemicals, and zircon. The Company mines titanium-bearing mineral sands and operates upgrading facilities that produce high-grade titanium feedstock materials, pig iron and other minerals, including the rare earth-bearing mineral, monazite. Its nine pigment facilities located in the United States, Australia, Brazil, United Kingdom, France, the Netherlands, China and the Kingdom of Saudi Arabia (KSA). Its principal products include TiO2 pigment, Ultrafine Specialty TiO2, Zircon (ZrSiO4), High Purity Pig Iron, Monazite, Feedstock and Titanium Tetrachloride. TiO2 pigment is used in a range of products due to its ability to impart whiteness, brightness and opacity. It produces ultrafine TiO2 at its manufacturing facility in Thann, France. It markets ultrafine TiO2 products under the CristalActiv trademark.

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.

Tronox Holdings PLC has a Value Score of 78, which is considered to be undervalued.

Tronox Holdings PLC’s price-to-book ratio is higher than its peers. This could make Tronox Holdings PLC less attractive for value investors when compared to the industry median at 1.80.

You can read more about Tronox Holdings PLC’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 Chemicals - Specialty 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 Chemicals - Specialty stocks as well as other industrys.

Choosing Which of the 4 Best Chemicals - Specialty 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.

• AdvanSix Inc stock has a Value Grade of B.
• Celanese Corporation stock has a Value Grade of B.
• FUJIFILM Holdings Corp. (ADR) stock has a Value Grade of B.
• Tronox Holdings PLC stock has a Value Grade of B.

Now that you have a bit more background about each of the 4 undervalued stocks in the Chemicals - Specialty 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 Chemicals - Specialty Stocks

Want to learn more about Chemicals - Specialty 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 Chemicals - Specialty Stocks for Monday, September 09
• Why Albemarle Corporation’s (ALB) Stock Is Down 6.90%
• Why Aspen Aerogels Inc’s (ASPN) Stock Is Down 7.15%
• Why Sociedad Quimica y Minr de Chile SA(ADR)’s (SQM) Stock Is Down 4.22%

AAII Disclaimer

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