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 Commercial Services & Supplies 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 Commercial Services & Supplies 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 Commercial Services & Supplies 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 Commercial Services & Supplies industry for Tuesday, October 29, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Commercial Services & Supplies 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.

ABM Industries Incorporated’s Value Grade

Value Grade:

ABM Industries Incorporated, through its subsidiaries, engages in the provision of integrated facility, infrastructure, and mobility solutions in the United States and internationally. It operates through Business & Industry, Manufacturing & Distribution, Education, Aviation, and Technical Solutions segments. The company offers janitorial, facilities engineering, and parking services for commercial real estate properties, including corporate offices for high tech clients, sports and entertainment venues, and traditional hospitals and non-acute healthcare facilities; provides vehicle maintenance and other services to rental car providers. It also offers integrated facility services, engineering, and other specialized services in various types of manufacturing, distribution, and data center facilities. In addition, the company delivers custodial and landscaping and grounds for public school districts, private schools, colleges, and universities. Further, it supports airlines and airports with services comprising passenger assistance, catering logistics, air cabin maintenance, and transportation services. Additionally, the company provides electric vehicle power design, installation, and maintenance, as well as microgrid systems installations. ABM Industries Incorporated was founded in 1909 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.

ABM Industries Incorporated has a Value Score of 66, which is considered to be undervalued.

When you look at ABM Industries Incorporated’s price-to-sales ratio at 0.42 compared to the industry median at 1.08, this company has a lower price relative to revenue compared to its peers. This could make ABM Industries Incorporated’s stock more attractive for value investors.

ABM Industries Incorporated’s price-earnings ratio is 22.10 compared to the industry median at 26.80. This means it has a lower share price relative to earnings compared to its peers. This could make ABM Industries Incorporated more attractive for value investors.

Now, let’s assess ABM Industries Incorporated’s EV/EBITDA ratio, also known as enterprise multiple. At 13.8, when compared to the industry median of 12.8, the company may be considered overvalued 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. ABM Industries Incorporated’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. ABM Industries Incorporated’s price-to-book ratio is lower than its industry median ratio of 2.03. This could make ABM Industries Incorporated more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at ABM Industries Incorporated’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. ABM Industries Incorporated’s price-to-free-cash-flow ratio is lower than its industry median ratio of 16.90. This could make ABM Industries Incorporated more attractive because the lower P/FCF ratio indicates that ABM Industries Incorporated 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.

ARC Document Solutions, Inc.’s Value Grade

Value Grade:

ARC Document Solutions, Inc., a digital printing company, provides digital printing and document-related services in the United States. It provides managed print services, that places, manages, and optimizes print and imaging equipment in customers' offices, job sites, and other facilities; and cloud-based document management software and other digital hosting services. The company also provides professional services and software services to re-produce and distribute large-format and small-format documents, and specialized graphic color printing. In addition, it engages in the sale and supply of equipment; and provides ancillary services. The company operates service centers in the United States, Canada, China, the United Kingdom, India, and the United Arab Emirates. It serves local restaurant owners, construction subcontractors, international retailers, regional energy companies, and largest school districts, as well as retail, technology, energy, education, hospitality, public utilities, and others. The company was formerly known as American Reprographics Company and changed its name to ARC Document Solutions, Inc. in 2012. ARC Document Solutions, Inc. was founded in 1988 is headquartered in San Ramon, 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.

ARC Document Solutions, Inc. has a Value Score of 78, which is considered to be undervalued.

ARC Document Solutions, Inc.’s price-earnings ratio is 19.1 compared to the industry median at 26.8. This means that it has a lower price relative to its earnings compared to its peers. This makes ARC Document Solutions, Inc. more attractive for value investors.

ARC Document Solutions, Inc.’s price-to-book ratio is higher than its peers. This could make ARC Document Solutions, Inc. less attractive for value investors when compared to the industry median at 2.03.

You can read more about ARC Document Solutions, 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.

Avalon Holdings Corporation’s Value Grade

Value Grade:

Avalon Holdings Corporation provides waste management services to industrial, commercial, municipal, and governmental customers in the United States. It operates in Waste Management Services, and Golf and Related Operations segments. The Waste Management Services segment offers hazardous and nonhazardous waste disposal brokerage and management services; captive landfill management services; and turnkey services, including daily operations, facilities management, and management reporting. This segment also engages in the salt water injection well operations; and sale of construction mats. The Golf and Related Operations segment is involved in operation and management of golf courses and related clubhouses and facilities; and a hotel and its associated resort amenities, as well as an athletic center. Its golf and country club facilities offer swimming pools, fitness centers, tennis courts, dining and banquet, conference facilities, salon, and spa services. The company also owns and operates hotel under the brand of The Grand Resort. Avalon Holdings Corporation was incorporated in 1998 and is headquartered in Warren, Ohio.

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.

Avalon Holdings Corporation has a Value Score of 76, which is considered to be undervalued.

Avalon Holdings Corporation’s price-earnings ratio is 381.4 compared to the industry median at 26.8. This means that it has a higher price relative to its earnings compared to its peers. This makes Avalon Holdings Corporation less attractive for value investors.

Avalon Holdings Corporation’s price-to-book ratio is higher than its peers. This could make Avalon Holdings Corporation less attractive for value investors when compared to the industry median at 2.03.

You can read more about Avalon Holdings 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.

Healthcare Services Group, Inc.’s Value Grade

Value Grade:

Healthcare Services Group, Inc. provides management, administrative, and operating services to the housekeeping, laundry, linen, facility maintenance, and dietary service departments of nursing homes, retirement complexes, rehabilitation centers, and hospitals in the United States. It operates through two segments, Housekeeping and Dietary. The Housekeeping segment engages in the cleaning, disinfecting, and sanitizing of resident rooms and common areas of the customers’ facilities, as well as laundering and processing of the bed linens, uniforms, resident personal clothing, and other assorted linen items utilized at the customers’ facilities. The Dietary segment provides food purchasing, meal preparation, and professional dietitian services, which include the development of menus that meet the dietary needs of residents; and on-site management and clinical consulting services to facilities. It serves long-term and post-acute care facilities, hospitals, and the healthcare industry through referrals and solicitation of target facilities. The company was incorporated in 1976 and is based in Bensalem, Pennsylvania.

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.

Healthcare Services Group, Inc. has a Value Score of 65, which is considered to be undervalued.

Healthcare Services Group, Inc.’s price-earnings ratio is 15.8 compared to the industry median at 26.8. This means that it has a lower price relative to its earnings compared to its peers. This makes Healthcare Services Group, Inc. more attractive for value investors.

Healthcare Services Group, Inc.’s price-to-book ratio is higher than its peers. This could make Healthcare Services Group, Inc. less attractive for value investors when compared to the industry median at 2.03.

You can read more about Healthcare Services 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.

Vestis Corporation’s Value Grade

Value Grade:

Vestis Corporation provides uniform rentals and workplace supplies in the United States and Canada. Its products include uniform options, such as shirts, pants, outerwear, gowns, scrubs, high visibility garments, particulate-free garments, and flame-resistant garments, as well as shoes and accessories; and workplace supplies, including managed restroom supply services, first-aid supplies and safety products, floor mats, towels, and linens. The company serves manufacturing, hospitality, retail, food processing, food service, pharmaceuticals, healthcare, automotive, and cleanroom industries. Vestis Corporation was founded in 1936 and is headquartered in Roswell, Georgia.

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.

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

Vestis Corporation’s price-earnings ratio is 15.8 compared to the industry median at 26.8. This means that it has a lower price relative to its earnings compared to its peers. This makes Vestis Corporation more attractive for value investors.

Vestis Corporation’s price-to-book ratio is lower than its peers. This could make Vestis Corporation more attractive for value investors when compared to the industry median at 2.03.

You can read more about Vestis 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 Commercial Services & Supplies 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 Commercial Services & Supplies stocks as well as other industrys.

Choosing Which of the 5 Best Commercial Services & Supplies 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.

• ABM Industries Incorporated stock has a Value Grade of B.
• ARC Document Solutions, Inc. stock has a Value Grade of B.
• Avalon Holdings Corporation stock has a Value Grade of B.
• Healthcare Services Group, Inc. stock has a Value Grade of B.
• Vestis Corporation stock has a Value Grade of B.

Now that you have a bit more background about each of the 5 undervalued stocks in the Commercial Services & Supplies 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 Commercial Services & Supplies Stocks

Want to learn more about Commercial Services & Supplies 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 Commercial Services & Supplies Stocks for Tuesday, October 29
• 5 Undervalued Commercial Services & Supplies Stocks for Monday, October 28
• 7 Undervalued Commercial Services & Supplies Stocks for Friday, October 25
• 5 Undervalued Commercial Services & Supplies Stocks for Thursday, October 24

AAII Disclaimer

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