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 Heavy Machinery & Vehicles 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 Heavy Machinery & Vehicles 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 Heavy Machinery & Vehicles 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 Heavy Machinery & Vehicles industry for Monday, September 16, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Heavy Machinery & Vehicles 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.

Art's Way Manufacturing Co Inc’s Value Grade

Value Grade:

Art's-Way Manufacturing Co., Inc. is a manufacturer of agricultural equipment and specialized in modular science and agricultural buildings. The Company operates through two segments: Agricultural Products and Modular Buildings. The Agricultural Products segment manufactures a variety of specialized farm machinery under its own label, including portable and stationary animal feed processing equipment and related attachments used to mill and mix feed grains into custom animal feed rations; a line of forage equipment consisting of forage boxes, bale processors, running gear, and dump boxes; a line of manure spreaders; sugar beet harvesting equipment, and a line of dirt work equipment. The Modular Buildings segment produces, sells and leases modular buildings, which are custom designed to meet the specific research needs of its customers. The buildings it commonly produces range from basic swine buildings to complex containment research laboratories.

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.

Art's Way Manufacturing Co Inc has a Value Score of 67, which is considered to be undervalued.

When you look at Art's Way Manufacturing Co Inc’s price-to-sales ratio at 0.34 compared to the industry median at 0.75, this company has a lower price relative to revenue compared to its peers. This could make Art's Way Manufacturing Co Inc’s stock more attractive for value investors.

Now, let’s assess Art's Way Manufacturing Co Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 15.3, when compared to the industry median of 9.5, the company may be considered overvalued 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. Art's Way Manufacturing Co Inc’s shareholder yield is lower than its industry median ratio of 0.98%. 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. Art's Way Manufacturing Co Inc’s price-to-book ratio is lower than its industry median ratio of 1.72. This could make Art's Way Manufacturing Co Inc more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Art's Way Manufacturing Co Inc’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Art's Way Manufacturing Co Inc’s price-to-free-cash-flow ratio is lower than its industry median ratio of 20.70. This could make Art's Way Manufacturing Co Inc more attractive because the lower P/FCF ratio indicates that Art's Way Manufacturing Co 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.

Astec Industries, Inc.’s Value Grade

Value Grade:

Astec Industries, Inc. designs, engineers, manufactures, markets, and equipment and components used primarily in asphalt and concrete road building and related construction activities. Its Infrastructure Solutions segment designs, engineers, manufactures and markets a complete line of asphalt and concrete plants, components and ancillary equipment, and asphalt road construction equipment, industrial thermal systems, land clearing, recycling and other heavy equipment. Its Materials Solutions segment designs and manufactures heavy rock processing equipment, in addition to servicing and supplying parts for the aggregate, mining, recycling, ports and bulk handling markets. The Company's products are marketed both domestically and internationally primarily to asphalt producers; highway and heavy equipment contractors; utility contractors; sand and gravel producers; construction, demolition, recycle and crushing contractors; forestry and environmental recycling contractors, 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.

Astec Industries, Inc. has a Value Score of 79, which is considered to be undervalued.

Astec Industries, Inc.’s price-to-book ratio is higher than its peers. This could make Astec Industries, Inc. less attractive for value investors when compared to the industry median at 1.72.

You can read more about Astec Industries, 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.

Columbus McKinnon Corp.’s Value Grade

Value Grade:

Columbus McKinnon Corporation is a designer, manufacturer and marketer of intelligent motion solutions for material handling. Its products include a variety of electric, air-powered, lever, and hand hoists, hoist trolleys, explosion-protected hoists, winches, and aluminum work stations; alloy and carbon steel chain; forged attachments, such as hooks, shackles, textile slings, clamps, and load binders; mechanical and electromechanical actuators and rotary unions; below-the-hook special purpose lifters; and power and motion control systems, such as alternate current (AC) and direct current (DC) drive systems, radio remote controls, push button pendant stations, brakes, and collision avoidance and power delivery subsystems. Its brands include Budgit, Chester, CM, Coffing, Little Mule, Pfaff, Shaw-Box, STAHL, Yale, Magnetek and Herc-Alloy. Its targeted market verticals include manufacturing, transportation including EV production and aerospace, energy and utilities, and process industries.

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.

Columbus McKinnon Corp. has a Value Score of 61, which is considered to be undervalued.

Columbus McKinnon Corp.’s price-earnings ratio is 19.5 compared to the industry median at 14.3. This means that it has a higher price relative to its earnings compared to its peers. This makes Columbus McKinnon Corp. less attractive for value investors.

Columbus McKinnon Corp.’s price-to-book ratio is higher than its peers. This could make Columbus McKinnon Corp. less attractive for value investors when compared to the industry median at 1.72.

You can read more about Columbus McKinnon 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.

Other Heavy Machinery & Vehicles 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 Heavy Machinery & Vehicles stocks as well as other industrys.

Choosing Which of the 3 Best Heavy Machinery & Vehicles 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.

• Art's Way Manufacturing Co Inc stock has a Value Grade of B.
• Astec Industries, Inc. stock has a Value Grade of B.
• Columbus McKinnon Corp. stock has a Value Grade of B.

Now that you have a bit more background about each of the 3 undervalued stocks in the Heavy Machinery & Vehicles 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 Heavy Machinery & Vehicles Stocks

Want to learn more about Heavy Machinery & Vehicles 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 Heavy Machinery & Vehicles Stocks for Monday, September 16
• Why Gencor Industries Inc’s (GENC) Stock Is Up 4.41%
• Why Blue Bird Corp’s (BLBD) Stock Is Up 6.07%
• 3 Undervalued Heavy Machinery & Vehicles Stocks for Tuesday, September 10

AAII Disclaimer

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