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 Leisure Products 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 Leisure Products 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 Leisure Products 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 Leisure Products industry for Thursday, October 03, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Leisure Products 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.

BRP Inc.’s Value Grade

Value Grade:

BRP Inc., together with its subsidiaries, designs, develops, manufactures, distributes, and markets powersports vehicles and marine products in the United States, Canada, Europe, the Asia Pacific, Mexico, Austria, and internationally. The Powersports segment offers year-round products, such as Can-Am all-terrain vehicles, side-by-side vehicles, and three-wheeled vehicles; and seasonal products, including Ski-Doo and Lynx snowmobiles, Sea-Doo personal watercrafts and pontoons, Rotax engines for karts and recreational aircraft, and Pinion gearboxes with smart shift systems. The Marine segment provides Alumacraft, Manitou, Quintrex, Stacer, and Yellowfin boats; Rotax engines for jet boats; and Rotax S outboard engine. The company was formerly known as J.A. Bombardier (J.A.B.) Inc. and changed its name to BRP Inc. in April 2013. BRP Inc. was founded in 1937 and is headquartered in Valcourt, Canada.

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.

BRP Inc. has a Value Score of 66, which is considered to be undervalued.

When you look at BRP Inc.’s price-to-sales ratio at 0.50 compared to the industry median at 0.83, this company has a lower price relative to revenue compared to its peers. This could make BRP Inc.’s stock more attractive for value investors.

BRP Inc.’s price-earnings ratio is 24.40 compared to the industry median at 17.20. This means it has a higher share price relative to earnings compared to its peers. This could make BRP Inc. less attractive for value investors.

Now, let’s assess BRP Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 10.4, when compared to the industry median of 13.1, 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. BRP Inc.’s shareholder yield is higher than its industry median ratio of 1.00%. 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. BRP Inc.’s price-to-book ratio is higher than its industry median ratio of 1.52. This could make BRP Inc. less attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at BRP Inc.’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. BRP Inc.’s price-to-free-cash-flow ratio is lower than its industry median ratio of 11.45. This could make BRP Inc. more attractive because the lower P/FCF ratio indicates that BRP 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.

Thule Group AB (publ)’s Value Grade

Value Grade:

Thule Group AB (publ) operates as a sports and outdoor company in Sweden and internationally. The company offers roof racks, roof boxes, and carriers for transporting cycling, water, and winter sports equipment; rooftop tents mounted on a car; awnings, bike carriers, and tents for RVs and caravans; bike trailers, child bike seats, and strollers; luggage, backpacks, and laptop and sport bags; and hiking backpacks, camera bags, and cases for consumer electronics. It sells its products under the Thule and Case Logic brands. Thule Group AB (publ) was founded in 1942 and is headquartered in Malmö, Sweden.

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.

Thule Group AB (publ) has a Value Score of 91, which is considered to be undervalued.

Thule Group AB (publ)’s price-earnings ratio is 14.6 compared to the industry median at 17.2. This means that it has a lower price relative to its earnings compared to its peers. This makes Thule Group AB (publ) more attractive for value investors.

Thule Group AB (publ)’s price-to-book ratio is higher than its peers. This could make Thule Group AB (publ) less attractive for value investors when compared to the industry median at 1.52.

You can read more about Thule Group AB (publ)’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.

Vision Marine Technologies Inc.’s Value Grade

Value Grade:

Vision Marine Technologies Inc. designs, develops, manufactures, sells, and rents electric boats in Canada, the United States, and internationally. It offers e-motion electric powertrain technology; e-motion electric outboard powertrain system; electric boats; maintenance, repair, and customer support services; as well as manufactures customized boats. The company also provides its products through website and distributors. It serves original equipment manufacturers, retail customer, boat clubs, and boat rental operations. The company was formerly known as Riopel Marine Inc. and changed its name to Vision Marine Technologies Inc. in April 2020. Vision Marine Technologies Inc. was founded in 1995 and is headquartered in Boisbriand, Canada.

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.

Vision Marine Technologies Inc. has a Value Score of 82, which is considered to be undervalued.

Vision Marine Technologies Inc.’s price-to-book ratio is higher than its peers. This could make Vision Marine Technologies Inc. less attractive for value investors when compared to the industry median at 1.52.

You can read more about Vision Marine 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.

Yamaha Corporation’s Value Grade

Value Grade:

Yamaha Corporation, together with its subsidiaries, engages in the musical instruments, audio equipment, and other businesses in Japan and internationally. It manufactures and sells pianos; digital musical instruments; guitars; keyboards; strings; basses and amps; brass and woodwinds; marching instruments; drums; percussion instruments; music production tools; audio and visual products; information and telecommunication equipment; home audios; and professional audio equipment under the Bösendorfer, Steinberg, Line 6, Ampeg, Nexo, Córdoba, Guild, DrArmond, and HumiCase brands. The company also provides acoustic design, unified communication devices, electronic devices, automotive sound system, automobile interior wood components, factory automation equipment, and golf products. In addition, it is involved in the music schools and resort business. The company was founded in 1887 and is headquartered in Hamamatsu, Japan.

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.

Yamaha Corporation has a Value Score of 69, which is considered to be undervalued.

Yamaha Corporation’s price-earnings ratio is 21.3 compared to the industry median at 17.2. This means that it has a higher price relative to its earnings compared to its peers. This makes Yamaha Corporation less attractive for value investors.

You can read more about Yamaha 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.

Other Leisure Products 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 Leisure Products stocks as well as other industrys.

Choosing Which of the 4 Best Leisure Products 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.

• BRP Inc. stock has a Value Grade of B.
• Thule Group AB (publ) stock has a Value Grade of A.
• Vision Marine Technologies Inc. stock has a Value Grade of A.
• Yamaha Corporation stock has a Value Grade of B.

Now that you have a bit more background about each of the 4 undervalued stocks in the Leisure Products 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 Leisure Products Stocks

Want to learn more about Leisure Products 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 Leisure Products Stocks for Thursday, October 03
• Why Yeti Holdings Inc’s (YETI) Stock Is Up 4.40%
• 3 Undervalued Recreational Products Stocks for Wednesday, September 25
• Why Peloton Interactive Inc’s (PTON) Stock Is Down 5.61%

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.