Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 5 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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5 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 5 undervalued stocks in the Diversified Consumer Services industry for Thursday, October 24, 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.

ATA Creativity Global’s Value Grade

Value Grade:

ATA Creativity Global, together with its subsidiaries, provides educational services to individual students through its training center network in China and internationally. Its educational services include portfolio training, research-based learning, overseas study counselling, in-school art classes through cooperation with high schools and training organizations, foreign language training services, junior art education, and other related educational services to its students. The company also offers online courses for students. It provides its services through partnership with sales channels, internet and mobile advertisement, word of mouth referral, and marketing events and activities. The company was formerly known as ATA Inc. and changed its name to ATA Creativity Global in September 2019. ATA Creativity Global was founded in 1999 and is headquartered in Hefei, 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.

ATA Creativity Global has a Value Score of 95, which is considered to be undervalued.

When you look at ATA Creativity Global’s price-to-sales ratio at 0.13 compared to the industry median at 1.02, this company has a lower price relative to revenue compared to its peers. This could make ATA Creativity Global’s stock more attractive for value investors.

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. ATA Creativity Global’s shareholder yield is lower 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. ATA Creativity Global’s price-to-book ratio is lower than its industry median ratio of 1.57. This could make ATA Creativity Global more attractive to investors looking for a new addition to their portfolio.

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.

Afya Limited’s price-earnings ratio is 15.2 compared to the industry median at 21.5. This means that it has a lower price relative to its earnings compared to its peers. This makes Afya Limited more attractive for value investors.

Afya Limited’s price-to-book ratio is higher than its peers. This could make Afya Limited less attractive for value investors when compared to the industry median at 1.57.

You can read more about Afya 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.

Graham Holdings Company’s Value Grade

Value Grade:

Graham Holdings Company, through its subsidiaries, operates as a diversified education and media company in the United States and internationally. It provides test preparation services and materials; professional training and exam preparation for professional certifications and licensures; and non-academic operations support services to the Purdue University Global; operations support services for online courses and programs; training and test preparation services for accounting and financial services professionals; English-language training, academic preparation programs, and test preparation for English proficiency exams; and A-level examination preparation services, as well as operates colleges, business school, higher education institution, and an online learning institution. The company also owns and operates television stations, restaurants, and entertainment venues; engages in the financial training and automobile dealerships business; offers social media management tools to connect newsrooms with their users; produces Foreign Policy magazine and ForeignPolicy.com website; and publishes Slate, an online magazine, as well as French-language news magazine websites at slate.fr and slateafrique.com. In addition, it provides social media marketing solutions; home health, hospice, and palliative services; burners, igniters, dampers, and controls; screw jacks, linear actuators, and related linear motion products, and lifting systems; pressure impregnated kiln-dried lumber and plywood products; digital advertising services; power charging and data systems, industrial and commercial indoor lighting solutions, and electrical components and assemblies; dermatology and professional aesthetics, and skin care services; software and services; and operates pharmacy. The company was formerly known as The Washington Post Company and changed its name to Graham Holdings Company in November 2013. Graham Holdings Company was founded in 1877 and is based in Arlington, Virginia.

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.

Graham Holdings Company has a Value Score of 73, which is considered to be undervalued.

Graham Holdings Company’s price-earnings ratio is 26.5 compared to the industry median at 21.5. This means that it has a higher price relative to its earnings compared to its peers. This makes Graham Holdings Company less attractive for value investors.

Graham Holdings Company’s price-to-book ratio is higher than its peers. This could make Graham Holdings Company less attractive for value investors when compared to the industry median at 1.57.

You can read more about Graham Holdings Company’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.

WW International, Inc.’s Value Grade

Value Grade:

WW International, Inc. provides weight management products and services worldwide. It offers a range of nutritional, activity, behavioral, and lifestyle tools and approaches products and services. The company also provides various digital subscription products to wellness and weight management business, which provide interactive and personalized resources that allow users to follow its weight management program through its app and web-based platform; and allows members to inspire and support each other by sharing their experiences with other people on weight health journeys. In addition, it licenses its trademarks and other intellectual property in food, beverages, and other relevant consumer products and services, as well as provides publishing services. The company was formerly known as Weight Watchers International, Inc. and changed its name to WW International, Inc. in September 2019. WW International, Inc. was founded in 1961 and is headquartered in New York, New York.

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.

WW International, Inc. has a Value Score of 62, which is considered to be undervalued.

You can read more about WW International, 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.

17 Education & Technology Group Inc.’s Value Grade

Value Grade:

17 Education & Technology Group Inc., an education technology company, provides education and education technology services in the People’s Republic of China. The company offers other educational products and services, including membership-based premium educational content subscriptions for educational contents, light courses, Chinese reading, math oral arithmetic, reading machines, study plans, and related services. It also provides teaching and learning SaaS solutions, such as education informatization services for education-related government entities, schools, and service providers. The company was incorporated in 2012 and is headquartered in Beijing, 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.

17 Education & Technology Group Inc. has a Value Score of 100, which is considered to be undervalued.

17 Education & Technology Group Inc.’s price-to-book ratio is higher than its peers. This could make 17 Education & Technology Group Inc. less attractive for value investors when compared to the industry median at 1.57.

You can read more about 17 Education & Technology Group 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 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 5 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.

• ATA Creativity Global stock has a Value Grade of A.
• Afya Limited stock has a Value Grade of A.
• Graham Holdings Company stock has a Value Grade of B.
• WW International, Inc. stock has a Value Grade of B.
• 17 Education & Technology Group Inc. stock has a Value Grade of A.

Now that you have a bit more background about each of the 5 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.

• 5 Undervalued Diversified Consumer Services Stocks for Thursday, October 24
• 7 Undervalued Diversified Consumer Services Stocks for Wednesday, October 23
• 3 Undervalued Diversified Consumer Services Stocks for Tuesday, October 22
• 3 Undervalued Diversified Consumer Services Stocks for Monday, October 21

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.