Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 7 stocks made the list for top value stocks in the Auto, Truck & Motorcycle Parts 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 Auto, Truck & Motorcycle Parts 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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7 Undervalued Auto, Truck & Motorcycle Parts Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 7 undervalued stocks in the Auto, Truck & Motorcycle Parts industry for Tuesday, October 01, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Auto, Truck & Motorcycle Parts 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.

China Automotive Systems, Inc.’s Value Grade

Value Grade:

China Automotive Systems, Inc., (China Automotive) is a holding company. The Company, through its subsidiary, Great Genesis Holdings Limited (Genesis), owns interests in over eight Sino-joint ventures and over five subsidiaries in the People's Republic of China (PRC), which manufacture power steering systems and/or related products for various segments of the automobile industry. Genesis also owns interests in a Brazil-based trading company, which engages mainly in the import and sales of automotive parts in Brazil. Henglong USA Corporation (HLUSA), which is a subsidiary of the Company, engages in marketing of automotive parts in North America, and provides after sales service and research and development support. The Company's geographical segments include the United States, China and other foreign countries. One of its subsidiaries, Shenyang Jinbei Henglong Automotive Steering System Co., Ltd., focuses on power steering parts for light duty vehicles.

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.

China Automotive Systems, Inc. has a Value Score of 94, which is considered to be undervalued.

When you look at China Automotive Systems, Inc.’s price-to-sales ratio at 0.23 compared to the industry median at 0.54, this company has a lower price relative to revenue compared to its peers. This could make China Automotive Systems, Inc.’s stock more attractive for value investors.

China Automotive Systems, Inc.’s price-earnings ratio is 3.88 compared to the industry median at 15.00. This means it has a lower share price relative to earnings compared to its peers. This could make China Automotive Systems, Inc. more attractive for value investors.

Now, let’s assess China Automotive Systems, Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 3.1, when compared to the industry median of 6.2, 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. China Automotive Systems, Inc.’s shareholder yield is the same 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. China Automotive Systems, Inc.’s price-to-book ratio is lower than its industry median ratio of 1.19. This could make China Automotive Systems, Inc. more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at China Automotive Systems, Inc.’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. China Automotive Systems, Inc.’s price-to-free-cash-flow ratio is higher than its industry median ratio of 12.88. This could make China Automotive Systems, Inc. less attractive because the higher P/FCF ratio indicates that China Automotive Systems, 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.

Cooper-Standard Holdings Inc’s Value Grade

Value Grade:

Cooper-Standard Holdings Inc. is a manufacturer of sealing and fluid handling systems (consisting of fuel and brake delivery and fluid transfer systems). Its products are primarily for use in passenger vehicles and light trucks that are manufactured by global automotive original equipment manufacturers (OEMs) and replacement markets. It operates through four segments: North America, Europe, Asia Pacific, and South America. The Company’s product lines include sealing systems and fluid handling systems (consisting of fuel and brake delivery and fluid transfer systems). The Company's brands include FlushSeal, Gen III Posi-Lock, Easy-Lock, MagAlloy, Ergo-Lock +, PlastiCool and Fortrex. FlushSeal is an advanced integrated solution for frame under glass static sealing systems. Its Easy-Lock is a small package coolant and fuel vapor quick connect. Its MagAlloy is a processing technology for brake lines that increases long term durability through superior corrosion resistance.

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.

Cooper-Standard Holdings Inc has a Value Score of 75, which is considered to be undervalued.

You can read more about Cooper-Standard 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.

China Yuchai International Limited’s Value Grade

Value Grade:

China Yuchai International Limited is a holding company. The Company operates through two segments: Guangxi Yuchai Machinery Company Limited (Yuchai) and HL Global Enterprises Limited (HLGE). The Yuchai segment primarily conducts manufacturing for on- and off-road powertrain solutions and applications which are mainly distributed in the Republic of China (PRC) market. Yuchai engages in the manufacture, assembly and sale of a wide variety of light, medium and heavy-duty engines for trucks, buses, passenger vehicles, construction equipment, marine, and agriculture applications. Yuchai also produces engines for diesel-powered generators. The HLGE segment is engaged in hospitality and property development activities conducted mainly in the PRC and Malaysia. The HLGE also operates Copthorne Hotel Cameron Highlands, a hotel in Cameron Highlands, Malaysia.

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.

China Yuchai International Limited has a Value Score of 98, which is considered to be undervalued.

China Yuchai International Limited’s price-earnings ratio is 10.5 compared to the industry median at 15.0. This means that it has a lower price relative to its earnings compared to its peers. This makes China Yuchai International Limited more attractive for value investors.

China Yuchai International Limited’s price-to-book ratio is higher than its peers. This could make China Yuchai International Limited less attractive for value investors when compared to the industry median at 1.19.

You can read more about China Yuchai International Limited’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.

Holley Inc’s Value Grade

Value Grade:

Holley, Inc. is a designer, marketer, and manufacturer of automotive aftermarket products for car and truck enthusiasts primarily in the United States, Canada and Europe. The Company's products span a number of automotive platforms and are sold across multiple channels. It manufactures a diversified line of performance automotive products, including carburetors, fuel pumps, fuel injection systems, nitrous oxide injection systems, superchargers, exhaust headers, mufflers, distributors, ignition components, engine tuners and automotive performance plumbing products. Its portfolio consists of over 70 brands spanning across over 30 product categories. Its brands include Holley EFI, Holley, MSD, Simpson, Powerteq, Accel and Flowmaster, among others. Its Holley EFI brand focuses on electronic fuel injection technology and showcases its new product development engine. Simpson brand is focused on motorsport safety products including helmets, head and neck restraints, seat belts and fire suits.

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.

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

Holley Inc’s price-earnings ratio is 15.4 compared to the industry median at 15.0. This means that it has a higher price relative to its earnings compared to its peers. This makes Holley Inc less attractive for value investors.

Holley Inc’s price-to-book ratio is higher than its peers. This could make Holley Inc less attractive for value investors when compared to the industry median at 1.19.

You can read more about Holley 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.

Mayville Engineering Company Inc’s Value Grade

Value Grade:

Mayville Engineering Company, Inc. is a vertically integrated, value-added manufacturing partner providing a full suite of manufacturing solutions from concept to production, including design, prototyping and tooling, fabrication, aluminum extrusion, coating, assembly and aftermarket components. Its customers operate in diverse end markets, such as heavy-and medium-duty commercial vehicles, construction and access equipment, powersports, agriculture, military and other end markets. Its capabilities include metal fabrication, metal stamping, aluminum extrusion and fabrication, tube bending and forming, robotic part forming, robotic welding, resistance welding, five-axis tube and fiber laser cutting and custom coatings, including high heat and chemical agent resistant coating painting, are used in a variety of applications. It serves its customers through 23 strategically located United States facilities, across seven states, with over three million square feet of manufacturing capacity.

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.

Mayville Engineering Company Inc has a Value Score of 61, which is considered to be undervalued.

Mayville Engineering Company Inc’s price-earnings ratio is 41.1 compared to the industry median at 15.0. This means that it has a higher price relative to its earnings compared to its peers. This makes Mayville Engineering Company Inc less attractive for value investors.

Mayville Engineering Company Inc’s price-to-book ratio is lower than its peers. This could make Mayville Engineering Company Inc more attractive for value investors when compared to the industry median at 1.19.

You can read more about Mayville Engineering Company 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.

Tytan Cybernetics Inc’s Value Grade

Value Grade:

Tytan Cybernetics, Inc., formerly Video River Networks, Inc., is a holding company for electric vehicle technology, financial technology, artificial intelligence, robotics, drones and distressed assets. The Company is engaged in expanding its technology portfolio, which includes electric vehicles, artificial intelligence, machine learning and robotics (EV-AI-ML-R), with businesses and operations in North America and Asia. The Company is also focused on business opportunities within financial technology, artificial intelligence, health, sports and entertainment 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.

Tytan Cybernetics Inc has a Value Score of 96, which is considered to be undervalued.

Tytan Cybernetics Inc’s price-earnings ratio is 0.6 compared to the industry median at 15.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Tytan Cybernetics Inc more attractive for value investors.

Tytan Cybernetics Inc’s price-to-book ratio is higher than its peers. This could make Tytan Cybernetics Inc less attractive for value investors when compared to the industry median at 1.19.

You can read more about Tytan Cybernetics 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.

Westport Fuel Systems Inc’s Value Grade

Value Grade:

Westport Fuel Systems Inc. is a global company focused on engineering, manufacturing, and supplying alternative fuel systems and components for transportation applications. Its segments include Light-Duty, High-Pressure Controls & Systems, Heavy-Duty OEM, Corporate, and HPDI joint venture (JV). Light-Duty segment manufactures liquified petroleum gas (LPG) and compressed natural gas (CNG) fuel storage solutions and supplies fuel storage tanks to the aftermarket, original equipment manufacturer (OEM), and other market segments across a range of brands. High Pressure Controls & Systems segment designs, develops, produces and sells components for transportation and industrial applications. Heavy-Duty OEM segment provides transitional services. The HPDI JV sells systems and components, including LNG HPDI 2.0 fuel system products, to engine OEMs and commercial vehicle OEMs. Its fuel systems and associated components control the pressure and flow of alternative fuels.

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.

Westport Fuel Systems Inc has a Value Score of 94, which is considered to be undervalued.

Westport Fuel Systems Inc’s price-to-book ratio is higher than its peers. This could make Westport Fuel Systems Inc less attractive for value investors when compared to the industry median at 1.19.

You can read more about Westport Fuel Systems 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 Auto, Truck & Motorcycle Parts 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 Auto, Truck & Motorcycle Parts stocks as well as other industrys.

Choosing Which of the 7 Best Auto, Truck & Motorcycle Parts 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.

• China Automotive Systems, Inc. stock has a Value Grade of A.
• Cooper-Standard Holdings Inc stock has a Value Grade of B.
• China Yuchai International Limited stock has a Value Grade of A.
• Holley Inc stock has a Value Grade of A.
• Mayville Engineering Company Inc stock has a Value Grade of B.
• Tytan Cybernetics Inc stock has a Value Grade of A.
• Westport Fuel Systems Inc stock has a Value Grade of A.

Now that you have a bit more background about each of the 7 undervalued stocks in the Auto, Truck & Motorcycle Parts 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 Auto, Truck & Motorcycle Parts Stocks

Want to learn more about Auto, Truck & Motorcycle Parts 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.

• 7 Undervalued Auto, Truck & Motorcycle Parts Stocks for Tuesday, October 01
• 3 Undervalued Auto, Truck & Motorcycle Parts Stocks for Monday, September 30
• Why Adient PLC’s (ADNT) Stock Is Down 4.77%
• Why China Yuchai International Limited’s (CYD) Stock Is Up 5.58%

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