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 Machinery 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 Machinery 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 Machinery 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 Machinery industry for Wednesday, October 30, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Machinery 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.

Art's-Way Manufacturing Co., Inc.’s Value Grade

Value Grade:

Art's-Way Manufacturing Co., Inc. manufactures and sells agricultural equipment, specialized modular science and agricultural buildings in the United States and internationally. The company operates through Agricultural Products and Modular Buildings. The Agricultural Products segment offers various specialized farm machinery, including portable and stationary animal feed processing equipment and related attachments; hay and forage equipment, such as forage boxes, bale processors, running gears, and dump boxes; manure spreaders; sugar beet harvesting equipment; dirt work equipment; and after-market service parts. The Modular Buildings segment produces, sells, and leases swine buildings, complex containment research laboratories, and research facilities for academic research institutions, government research and diagnostic centers, public health institutions, and private research and pharmaceutical companies. This segment also designs, manufactures, delivers, installs, and rents building units. It markets and sells its products through independent farm equipment dealers, and OEM sales channels. Art's-Way Manufacturing Co., Inc. was founded in 1956 and is based in Armstrong, Iowa.

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.

Art's-Way Manufacturing Co., Inc. has a Value Score of 67, which is considered to be undervalued.

When you look at Art's-Way Manufacturing Co., Inc.’s price-to-sales ratio at 0.32 compared to the industry median at 1.33, this company has a lower price relative to revenue compared to its peers. This could make Art's-Way Manufacturing Co., Inc.’s stock more attractive for value investors.

Now, let’s assess Art's-Way Manufacturing Co., Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 20.8, when compared to the industry median of 13.1, 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. Art's-Way Manufacturing Co., Inc.’s shareholder yield is lower than its industry median ratio of 0.15%. 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. Art's-Way Manufacturing Co., Inc.’s price-to-book ratio is lower than its industry median ratio of 2.23. This could make Art's-Way Manufacturing Co., Inc. more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Art's-Way Manufacturing Co., Inc.’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Art's-Way Manufacturing Co., Inc.’s price-to-free-cash-flow ratio is lower than its industry median ratio of 26.60. This could make Art's-Way Manufacturing Co., Inc. more attractive because the lower P/FCF ratio indicates that Art's-Way Manufacturing Co., 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.

Chicago Rivet & Machine Co.’s Value Grade

Value Grade:

Chicago Rivet & Machine Co. operates in the fastener industry in North America. It operates in two segments, Fasteners and Assembly Equipment. The Fastener segment manufactures and sells rivets, cold-formed fasteners and parts, and screw machine products. The Assembly Equipment segment engages in the manufacture and sale of automatic rivet setting machines, as well as parts and tools for related machines. The company sells its products to automotive industry through independent sales representatives. Chicago Rivet & Machine Co. was founded in 1920 and is headquartered in Naperville, 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.

Chicago Rivet & Machine Co. has a Value Score of 92, which is considered to be undervalued.

Chicago Rivet & Machine Co.’s price-to-book ratio is higher than its peers. This could make Chicago Rivet & Machine Co. less attractive for value investors when compared to the industry median at 2.23.

You can read more about Chicago Rivet & Machine Co.’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.

The Greenbrier Companies, Inc.’s Value Grade

Value Grade:

The Greenbrier Companies, Inc. designs, manufactures, and markets railroad freight car equipment in North America, Europe, and South America. It operates through three segments: Manufacturing; Maintenance Services; and Leasing & Management Services. The Manufacturing segment offers covered hopper cars, gondolas, open top hoppers, boxcars, center partition cars, tank cars, sustainable conversions, intermodal railcars, and railcar equipment. The Maintenance Services segment provides wheel services, including reconditioning of wheels and axles, new axle machining and finishing, and downsizing; operates a railcar maintenance network; and reconditions and manufactures railcar cushioning units, couplers, yokes, side frames, bolsters, and various other parts. The Leasing & Management Services segment offers operating leases and per diem leases for a fleet of approximately 15,500 railcars; and management services comprising railcar maintenance management, railcar accounting services, fleet management and logistics, administration, and railcar re-marketing. This segment provides management services for railroads, shippers, carriers, institutional investors, and other leasing and transportation companies. It serves railroads, leasing companies, financial institutions, shippers, carriers, and transportation companies. The company was founded in 1974 and is headquartered in Lake Oswego, Oregon.

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.

The Greenbrier Companies, Inc. has a Value Score of 84, which is considered to be undervalued.

The Greenbrier Companies, Inc.’s price-earnings ratio is 12.3 compared to the industry median at 22.3. This means that it has a lower price relative to its earnings compared to its peers. This makes The Greenbrier Companies, Inc. more attractive for value investors.

The Greenbrier Companies, Inc.’s price-to-book ratio is higher than its peers. This could make The Greenbrier Companies, Inc. less attractive for value investors when compared to the industry median at 2.23.

You can read more about The Greenbrier Companies, 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.

Greenland Technologies Holding Corporation’s Value Grade

Value Grade:

Greenland Technologies Holding Corporation designs, develops, manufactures, and sells components and products for material handling industries worldwide. The company offers transmission products, such as transmission systems and integrated powertrain primarily for electric forklift trucks; electric industrial heavy equipment, including electric wheeled front loader, electric excavator, and electric lithium forklifts; and provides charging solutions. Its products are used in manufacturing and logistic applications, such as factories, workshops, warehouses, fulfillment centers, shipyards, and seaports. Greenland Technologies Holding Corporation was and is headquartered in East Windsor, New Jersey.

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.

Greenland Technologies Holding Corporation has a Value Score of 78, which is considered to be undervalued.

Greenland Technologies Holding Corporation’s price-to-book ratio is higher than its peers. This could make Greenland Technologies Holding Corporation less attractive for value investors when compared to the industry median at 2.23.

You can read more about Greenland Technologies Holding 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.

Hydrofarm Holdings Group, Inc.’s Value Grade

Value Grade:

Hydrofarm Holdings Group, Inc., together with its subsidiaries, manufactures and distributes controlled environment agriculture (CEA) equipment and supplies in the United States and Canada. The company provides agricultural lighting devices, indoor climate control equipment, and nutrients, as well as plant additives used to grow, farm, and cultivate cannabis, flowers, fruits, plants, vegetables, grains, and herbs in controlled environment. It is also involved in the distribution of CEA equipment and supplies comprising nutrients and fertilizers; grow light systems; horticulture benches and racking systems; heating, ventilation, and air conditioning systems; humidity and carbon dioxide monitors and controllers; water pumps, heaters, chillers, and filters; and various growing media typically made from soil, peat, rock wool or coconut fiber, and others. The company offers its products to specialty hydroponic retailers, commercial resellers and greenhouse builders, garden centers, hardware stores, and e-commerce retailers under the Active Air, Active Aqua, Aurora Peat Products, HEAVY 16, House & Garden, Gaia Green, Grotek, Innovative Growers Equipment, Mad Farmer, Phantom, PHOTOBIO, Procision, Roots Organics, Soul, and SunBlaster brands. It serves its products through a range of commercial and home gardening equipment and supplies retailers. Hydrofarm Holdings Group, Inc. was founded in 1977 and is based in Shoemakersville, 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.

Hydrofarm Holdings Group, Inc. has a Value Score of 95, which is considered to be undervalued.

Hydrofarm Holdings Group, Inc.’s price-to-book ratio is higher than its peers. This could make Hydrofarm Holdings Group, Inc. less attractive for value investors when compared to the industry median at 2.23.

You can read more about Hydrofarm Holdings 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.

The Manitowoc Company, Inc.’s Value Grade

Value Grade:

The Manitowoc Company, Inc. provides engineered lifting solutions in the Americas, Europe, Africa, the Middle East, the Asia Pacific, and internationally. It designs, manufactures, and distributes crawler-mounted lattice-boom cranes under the Manitowoc brand; a line of top-slewing and self-erecting tower cranes under the Potain brand; mobile hydraulic cranes under the Grove, Shuttlelift, and National Crane brands; and hydraulic boom trucks under the National Crane brand. The company also provides aftermarket services, such as sale of parts and accessories, field service work, routine maintenance services, technical support, erection and decommissioning services, crane and component remanufacturing, training, and telematics services. Its crane products are used in various applications, including energy production/distribution and utilities; petrochemical and industrial; infrastructure, such as road, bridge, and airport construction; and commercial and residential construction. The company serves a range of customers, including dealers, rental companies, contractors, and government entities in the petrochemical, industrial, commercial construction, power and utilities, infrastructure, and residential construction end markets. The Manitowoc Company, Inc. was founded in 1902 and is headquartered in Milwaukee, Wisconsin.

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.

The Manitowoc Company, Inc. has a Value Score of 62, which is considered to be undervalued.

The Manitowoc Company, Inc.’s price-earnings ratio is 41.7 compared to the industry median at 22.3. This means that it has a higher price relative to its earnings compared to its peers. This makes The Manitowoc Company, Inc. less attractive for value investors.

The Manitowoc Company, Inc.’s price-to-book ratio is higher than its peers. This could make The Manitowoc Company, Inc. less attractive for value investors when compared to the industry median at 2.23.

You can read more about The Manitowoc Company, 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 Machinery 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 Machinery stocks as well as other industrys.

Choosing Which of the 6 Best Machinery 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.

• Art's-Way Manufacturing Co., Inc. stock has a Value Grade of B.
• Chicago Rivet & Machine Co. stock has a Value Grade of A.
• The Greenbrier Companies, Inc. stock has a Value Grade of A.
• Greenland Technologies Holding Corporation stock has a Value Grade of B.
• Hydrofarm Holdings Group, Inc. stock has a Value Grade of A.
• The Manitowoc Company, Inc. stock has a Value Grade of B.

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

Want to learn more about Machinery 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 Machinery Stocks for Wednesday, October 30
• 7 Undervalued Machinery Stocks for Tuesday, October 29
• 6 Undervalued Machinery Stocks for Monday, October 28
• 6 Undervalued Machinery Stocks for Friday, October 25

AAII Disclaimer

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