Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 6 stocks made the list for top value stocks in the Diversified Consumer Services 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 Diversified Consumer Services 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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6 Undervalued Diversified Consumer Services Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 6 undervalued stocks in the Diversified Consumer Services industry for Monday, October 07, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Diversified Consumer Services 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.

Afya Limited’s Value Grade

Value Grade:

Afya Limited operates as a medical education group in Brazil. The company operates through three segments: Undergrad, Continuing Education, and Digital Services. It offers educational products and services, including medical schools, medical residency preparatory courses, graduate courses, and other programs to lifelong medical learners enrolled across its distribution network, as well as to third-party medical schools. The company provides digital health services, such as subscription-based mobile app and website portal that focuses on assisting health professionals and students with clinical decision-making through tools, such as medical calculators, charts, and updated content, as well as prescriptions, clinical scores, medical procedures and laboratory exams, and others. It offers health sciences courses, which comprise medicine, dentistry, nursing, radiology, psychology, pharmacy, physical education, physiotherapy, nutrition, and biomedicine; and degree programs and courses in other subjects and disciplines, including undergraduate and post graduate courses in business administration, accounting, law, civil engineering, industrial engineering, and pedagogy. In addition, the company provides medical postgraduate specialization programs; printed and digital content; and an online medical education platform and practical medical training services. Further, it offers iClinic, a practice management software; educational health and medical imaging solutions through an interactive platform; Cliquefarma, a free-to-use website that tracks prescription drugs, cosmetics and personal hygiene product prices; Shosp, a clinical management software; RX PRO, a solution that connects physicians with the pharmaceutical industry; and Glic, a free diabetes care and management app solution for physicians and patients. The company was founded in 1999 and is headquartered in Nova Lima, Brazil.

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.

Afya Limited has a Value Score of 96, which is considered to be undervalued.

When you look at Afya Limited’s price-to-sales ratio at 0.53 compared to the industry median at 1.20, this company has a lower price relative to revenue compared to its peers. This could make Afya Limited’s stock more attractive for value investors.

Afya Limited’s price-earnings ratio is 15.30 compared to the industry median at 18.65. This means it has a lower share price relative to earnings compared to its peers. This could make Afya Limited more attractive for value investors.

Now, let’s assess Afya Limited’s EV/EBITDA ratio, also known as enterprise multiple. At 9.6, when compared to the industry median of 11.4, 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. Afya Limited’s shareholder yield is higher 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. Afya Limited’s price-to-book ratio is lower than its industry median ratio of 1.36. This could make Afya Limited more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Afya Limited’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Afya Limited’s price-to-free-cash-flow ratio is lower than its industry median ratio of 15.45. This could make Afya Limited more attractive because the lower P/FCF ratio indicates that Afya Limited 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.

Chegg, Inc.’s Value Grade

Value Grade:

Chegg, Inc. operates a direct-to-student learning platform that helps learners build essential life and job skills to accelerate their path from learning programs in the United States and internationally. Its subscription services include Chegg Study, which offers personalized step-by-step learning support from AI, computational engines, and subject matter experts, as well as Tinger Gold and DashPash Student services; Chegg Writing that provides students with a suite of tools, such as plagiarism detection scans, grammar and writing fluency checking, expert personalized writing feedback, and premium citation generation; Chegg Math, a step-by-step math problem solver and calculator that helps students to solve problems; Chegg Study Pack, a bundle of various subscription product offerings, including Chegg Study, Chegg Writing, and Chegg Math services; and Busuu, an online language learning platform that offers comprehensive support through self-paced lessons, live classes with expert tutors, and a community of members to practice alongside. The company also provides a skills-based learning platform to learn technical skills comprising AI, coding, data analytics, and cybersecurity, as well as competencies consisting of emotional intelligence, mindset, emerging leadership, and decision making. In addition, it rents and sells print textbooks and eTextbooks; and offers advertising services. The company serves students and companies through direct marketing channels and social media. Chegg, Inc. was incorporated in 2005 and is headquartered in Santa Clara, California.

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.

Chegg, Inc. has a Value Score of 98, which is considered to be undervalued.

Chegg, Inc.’s price-to-book ratio is higher than its peers. This could make Chegg, Inc. less attractive for value investors when compared to the industry median at 1.36.

You can read more about Chegg, 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.

Four Seasons Education (Cayman) Inc.’s Value Grade

Value Grade:

Four Seasons Education (Cayman) Inc. provides after-school education services for kindergarten, elementary, and middle school students in the People’s Republic of China and internationally. It also offers consulting services; and tourism services, including travel agency services. The company was founded in 2007 and is headquartered in Shanghai, the People’s Republic of China.

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.

Four Seasons Education (Cayman) Inc. has a Value Score of 62, which is considered to be undervalued.

Four Seasons Education (Cayman) Inc.’s price-earnings ratio is 42.5 compared to the industry median at 18.7. This means that it has a higher price relative to its earnings compared to its peers. This makes Four Seasons Education (Cayman) Inc. less attractive for value investors.

Four Seasons Education (Cayman) Inc.’s price-to-book ratio is higher than its peers. This could make Four Seasons Education (Cayman) Inc. less attractive for value investors when compared to the industry median at 1.36.

You can read more about Four Seasons Education (Cayman) 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.

JIADE Limited’s Value Grade

Value Grade:

JIADE Limited, through its subsidiaries, provides education-supporting services to adult education institutions through a spectrum of a software platform and auxiliary solutions in China. Its KB Platform supports a range of services, such as enrollment consultation, student information collection, enrollment status management, learning progress management, grade inquiry, and graduation management. It also offers pre-enrollment guidance on school/selection and application strategy development, training for entrance exams, and assistance in the application process; offline tutoring, exam administration services, guidance on graduation thesis; and social practice assistance, including education supporting services. The company was incorporated in 2023 and is based in Chengdu, China.

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.

JIADE Limited has a Value Score of 92, which is considered to be undervalued.

JIADE Limited’s price-earnings ratio is 10.8 compared to the industry median at 18.7. This means that it has a lower price relative to its earnings compared to its peers. This makes JIADE Limited more attractive for value investors.

JIADE Limited’s price-to-book ratio is higher than its peers. This could make JIADE Limited less attractive for value investors when compared to the industry median at 1.36.

You can read more about JIADE 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.

Lixiang Education Holding Co., Ltd.’s Value Grade

Value Grade:

Lixiang Education Holding Co., Ltd., through its subsidiaries, provides private education services in the People’s Republic of China. The company offers high school and vocational education services through Qingtian International School, Lishui International School, Beijing Xinxiang, Langfang School, and Hainan Jiangcai. It also provides education and human resources services, including human resources comprising labor dispatch, human education, and agency recruitment; outsourcing vocational services; recruitment process outsourcing services; services for flexible employment, including the services for the part-time employment, retirement re-employment, internships, and other short-term or temporary employment methods; and vocational education. In addition, the company offers human resources services for internship and employment recommendations. The company was formerly known as Lianwai Education Group Limited and changed its name to Lixiang Education Holding Co., Ltd. in May 2020. The company was founded in 2001 and is headquartered in Lishui, the People’s Republic of China.

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.

Lixiang Education Holding Co., Ltd. has a Value Score of 90, which is considered to be undervalued.

Lixiang Education Holding Co., Ltd.’s price-to-book ratio is higher than its peers. This could make Lixiang Education Holding Co., Ltd. less attractive for value investors when compared to the industry median at 1.36.

You can read more about Lixiang Education Holding Co., Ltd.’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.

Vasta Platform Limited’s Value Grade

Value Grade:

Vasta Platform Limited provides educational printed and digital solutions to private schools operating in the K-12 education sector in Brazil. The company offers digital and printed textbooks, teacher handbooks, exercise books, multidisciplinary subject books, and student evaluations; and PAR platform that allows schools to select their preferred books and materials and follow their own specific teaching methods. It also provides traditional learning systems under the Anglo, Pitágoras, Rede Cristã de Educação, Maxi Ético, Fibonacci, Mackenzie, and Amplia brands; ongoing training for educators; and services to partner schools, including consulting services for school management and the organization of events, and a proprietary and differentiated evaluation system for partner schools and their students. In addition, the company offers Plurall that provides a digital learning experience and allows for tailor-made adjustments for each school; Plurall Maestro that develops digital solutions to help educators in planning and conducting classes; PROFS, a teacher training program; O Líder em Mim, a program with content, methodology, teaching material, and training to develop leadership; English Stars, an English educational platform; EduAll, a bilingual program to enhance its current solutions; Plurall Olímpico, a content for scientific competitions; MindMakers to develop leadership, collaboration, and persistence through multidisciplinary problem-solving exercises; Matific that provides interactive learning environments and adaptable worksheets; Plurall Store; Plurall Adapta for adaptive learning sessions; Plurall MeuProf to connect students with professors for private tutoring; Prepara to prepare students for external assessments; Leader in Me to develop socio-emotional competencies of K12 students; Education Systems, a structured teaching system for K12 students and teachers; and Prepara ENEM. Vasta Platform Limited was founded in 1966 and is based in São Paulo, Brazil.

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.

Vasta Platform Limited has a Value Score of 100, which is considered to be undervalued.

Vasta Platform Limited’s price-to-book ratio is higher than its peers. This could make Vasta Platform Limited less attractive for value investors when compared to the industry median at 1.36.

You can read more about Vasta Platform 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.

Other Diversified Consumer Services 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 Diversified Consumer Services stocks as well as other industrys.

Choosing Which of the 6 Best Diversified Consumer Services 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.

• Afya Limited stock has a Value Grade of A.
• Chegg, Inc. stock has a Value Grade of A.
• Four Seasons Education (Cayman) Inc. stock has a Value Grade of B.
• JIADE Limited stock has a Value Grade of A.
• Lixiang Education Holding Co., Ltd. stock has a Value Grade of A.
• Vasta Platform Limited stock has a Value Grade of A.

Now that you have a bit more background about each of the 6 undervalued stocks in the Diversified Consumer Services 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 Diversified Consumer Services Stocks

Want to learn more about Diversified Consumer Services 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.

• 6 Undervalued Diversified Consumer Services Stocks for Monday, October 07
• 7 Undervalued Diversified Consumer Services Stocks for Friday, October 04
• 4 Undervalued Diversified Consumer Services Stocks for Thursday, October 03
• 3 Undervalued Professional & Business Education Stocks for Tuesday, October 01

AAII Disclaimer

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