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 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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3 Undervalued Leisure Products 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 Leisure Products industry for Wednesday, October 23, 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.

Brunswick Corporation’s Value Grade

Value Grade:

Brunswick Corporation designs, manufactures, and markets recreation products in the United States, Europe, the Asia-Pacific, Canada, and internationally. It operates through four segments: Propulsion, Engine P&A;, Navico Group, and Boat. The Propulsion segment provides outboard, sterndrive, inboard engines, propulsion-related controls, rigging, and propellers for boat builders through marine retail dealers under the Mercury, Mercury MerCruiser, Mariner, Mercury Racing, Mercury Diesel, Avator, and Fliteboard brands. The Engine P&A; segment offers engine parts and consumables, electrical products, boat parts and systems, and engine oils and lubricants through aftermarket retailers, dealers, distributors, and original equipment manufacturers for marine and non-marine markets under the Mercury, Mercury Precision Parts, Quicksilver, and Seachoice brands; and distributes marine parts and accessories. The Navico Group segment provides products and systems for the marine, recreational vehicle (RV), specialty vehicle, mobile, and industrial markets, as well as aftermarket channels; and marine electronics, sensors, control systems, instruments, power systems, and general accessories under the Ancor, Attwood, B&G;, BEP, Blue Sea Systems, C-MAP, CZone, Lenco, Lowrance, Marinco, Mastervolt, MotorGuide, Progressive Industries, ProMariner, RELiON, Simrad, and Whale brand names. The Boat segment offers Sea Ray sport boats and cruisers; Bayliner sport cruisers, runabouts, and Heyday wake boats; Boston Whaler fiberglass offshore boats; Lund fiberglass fishing boats; Crestliner, Harris, Lowe, Lund, Princecraft aluminum fishing, utility, pontoon, and deck boats; Thunder Jet heavy-gauge aluminum boats; Veer recreational and fishing boats; and the freedom boat club, dealer services, and technology to the marine industry through dealers and distributors. Brunswick Corporation was founded in 1845 and is headquartered in Mettawa, Illinois.

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.

Brunswick Corporation has a Value Score of 65, which is considered to be undervalued.

When you look at Brunswick Corporation’s price-to-sales ratio at 0.95 compared to the industry median at 0.88, this company has a higher price relative to revenue compared to its peers. This could make Brunswick Corporation’s stock less attractive for value investors.

Brunswick Corporation’s price-earnings ratio is 15.20 compared to the industry median at 20.10. This means it has a lower share price relative to earnings compared to its peers. This could make Brunswick Corporation more attractive for value investors.

Now, let’s assess Brunswick Corporation’s EV/EBITDA ratio, also known as enterprise multiple. At 8.7, when compared to the industry median of 13.3, 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. Brunswick Corporation’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. Brunswick Corporation’s price-to-book ratio is higher than its industry median ratio of 1.52. This could make Brunswick Corporation less attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Brunswick Corporation’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Brunswick Corporation’s price-to-free-cash-flow ratio is higher than its industry median ratio of 14.45. This could make Brunswick Corporation less attractive because the higher P/FCF ratio indicates that Brunswick Corporation 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.

Solo Brands, Inc.’s Value Grade

Value Grade:

Solo Brands, Inc. operates a direct-to-consumer platform that offers outdoor and lifestyle branded products in the United States. The company provides camp stoves under the Solo Stove Lite brand name; fire pits under the Solo Stove brand name; kayaks under the Oru brand name; paddle boards under the ISLE brand name; and storage solutions for fire pits, firewood, and other accessories. It also offers swim trunks, casual shorts, sport products, polos, shirts, and lounge products under the Chubbies brand name; consumables, such as color packs, starters, natural charcoal, fuel, pellets, and firewood products; and accessories comprising shelters, shields, roasting sticks, tools, paddles, and pumps under the Solo Stove, Oru, and ISLE brands. Solo Brands, Inc. was founded in 2011 and is headquartered in Grapevine, Texas.

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.

Solo Brands, Inc. has a Value Score of 93, which is considered to be undervalued.

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

You can read more about Solo Brands, 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.

Mattel, Inc.’s Value Grade

Value Grade:

Mattel, Inc., a toy and family entertainment company, designs, manufactures, and markets toys and consumer products in North America, Latin America, Europe, the Middle East, Africa, and the Asia Pacific. The company operates through North America, International, and American Girl segments. It offers dolls and accessories, as well as books, content, gaming, and lifestyle products for children under the Barbie, American Girl, Disney Princess and Disney Frozen, Monster High, and Polly Pocket brands; die-cast vehicles, tracks, playsets, and accessories for kids, adults, and collectors under the Hot Wheels, Hot Wheels Monster Trucks, Hot Wheels Mario Kart, Matchbox, and Cars brand names; and infant, toddler, and preschool products comprising content, toys, live events, and other consumer products under the Fisher-Price, Little People and Imaginext, and Thomas & Friends, and Power wheels brands. The company also provides action figures, building sets, games, and other products under the Masters of the Universe, MEGA, UNO, Jurassic World, Minecraft, WWE, Lightyear, and Star Wars; and licensor partner brands, including Disney Pixar, Microsoft, NBCUniversal, and WWE. It sells its products directly to consumers through its catalog, website, and proprietary retail stores; retailers, including omnichannel retailers, discount and free-standing toy stores, chain stores, department stores, and other retail outlets; and wholesalers, as well as through agents and distributors. Mattel, Inc. was founded in 1945 and is headquartered in El Segundo, 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.

Mattel, Inc. has a Value Score of 67, which is considered to be undervalued.

Mattel, Inc.’s price-earnings ratio is 20.0 compared to the industry median at 20.1. This means that it has a lower price relative to its earnings compared to its peers. This makes Mattel, Inc. more attractive for value investors.

Mattel, Inc.’s price-to-book ratio is lower than its peers. This could make Mattel, Inc. more attractive for value investors when compared to the industry median at 1.52.

You can read more about Mattel, 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 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 3 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.

• Brunswick Corporation stock has a Value Grade of B.
• Solo Brands, Inc. stock has a Value Grade of A.
• Mattel, Inc. stock has a Value Grade of B.

Now that you have a bit more background about each of the 3 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.

• 3 Undervalued Leisure Products Stocks for Wednesday, October 23
• 3 Undervalued Leisure Products Stocks for Tuesday, October 22
• 3 Undervalued Leisure Products Stocks for Monday, October 21
• 3 Undervalued Leisure Products Stocks for Wednesday, October 16

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.