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 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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5 Undervalued Machinery 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 Machinery industry for Wednesday, November 06, 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 0.33 compared to the industry median at 1.44, 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 0.30%. 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 2.18. 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 28.70. 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.

Hurco Companies, Inc.’s Value Grade

Value Grade:

Hurco Companies, Inc., an industrial technology company, designs, manufactures, and sells computerized machine tools to companies in the metal cutting industry worldwide. Its principal products include general-purpose computerized machine tools, including vertical and horizontal machining centers, turning centers, and toolroom machines. The company also provides computer control systems and related software for press brake applications. In addition, it offers machine tool components, automation integration equipment, and solutions for job shops; and software options, control upgrades, and accessories and replacement parts for its products, as well as customer service, training, and applications support services. Further, the company provides Autobend computer control systems for press brake machines. It serves independent job shops and specialized short-run production applications within large manufacturing operations, as well as precision tool, die, and mold manufacturers in aerospace, defense, medical equipment, energy, automotive/transportation, electronics, and computer industries. The company sells its products under the Hurco, Milltronics, and Takumi brands through independent agents and distributors, as well as through its direct sales and service organizations. Hurco Companies, Inc. was incorporated in 1968 and is headquartered in Indianapolis, Indiana.

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.

Hurco Companies, Inc. has a Value Score of 78, which is considered to be undervalued.

Hurco Companies, Inc.’s price-to-book ratio is higher than its peers. This could make Hurco Companies, Inc. less attractive for value investors when compared to the industry median at 2.18.

You can read more about Hurco 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.

Miller Industries, Inc.’s Value Grade

Value Grade:

Miller Industries, Inc., together with its subsidiaries, manufactures and sells towing and recovery equipment. The company offers wreckers that are used to recover and tow disabled vehicles and other equipment; and car carriers, which are specialized flat-bed vehicles with hydraulic tilt mechanisms, which are used to transport new or disabled vehicles and other equipment. It also provides transport trailers for moving various vehicles for auto auctions, car dealerships, leasing companies, and other similar operations. The company markets its products under the Century, Vulcan, Challenger, Holmes, Champion, Chevron, Eagle, Titan, Jige, and Boniface brands. Miller Industries, Inc. sells its products through independent distributors in North America, and Canada, Mexico; and through prime contractors to governmental entities. Miller Industries, Inc. was incorporated in 1990 and is headquartered in Ooltewah, Tennessee.

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.

Miller Industries, Inc. has a Value Score of 81, which is considered to be undervalued.

Miller Industries, Inc.’s price-earnings ratio is 11.1 compared to the industry median at 24.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Miller Industries, Inc. more attractive for value investors.

Miller Industries, Inc.’s price-to-book ratio is lower than its peers. This could make Miller Industries, Inc. more attractive for value investors when compared to the industry median at 2.18.

You can read more about Miller Industries, 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.

Stratasys Ltd.’s Value Grade

Value Grade:

Stratasys Ltd. provides connected polymer-based 3D printing solutions. It offers range of 3D printing systems, which includes polyjet printer, Fused Deposition Modeling (FDM) printers, stereolithography printing systems, origin P3 printers, and selective absorption fusion printer for additive manufacturing, and tooling and rapid prototyping for various vertical markets, such as automotive, aerospace, consumer products and healthcare. The company provides consumable materials, including 3D printing materials comprising FDM, polyjet, and stereolithography materials for manufacturing applications, such as jigs and fixtures, investment casting, and injection mold or composite tooling applications; and other material. In addition, it offers software and services, which includes cloud, desktop and mobile technologies comprising GrabCAD, an additive manufacturing platform to manage production-scale operations; and GrabCAD Print, job programming software enables the unique features of 3D printing technologies, such as creating lightweight, structurally sound infills for FDM, and multi-material and color and material management for polyjet. The company also provides GrabCAD Shop including scheduling, remote monitoring, and analytics; GrabCAD Connect provides two-way SDK integration for third-party software applications; and GrabCAD Community, an online community of professional engineers, designers, manufacturers and students who share their practices through tutorials, discussion forums, design/print challenges, and 3D content. Further, it offers GrabCAD Shop, which simplifies 3D printing shop workflow; GrabCAD Streamline Software Development Kit (SDK) to support enterprise goals such as system connectivity, compliance, and workflow automation; and Grab CAD Software Partner program for independent software vendors. The company sells its products through a network of resellers and independent sales agents worldwide. Stratasys Ltd. is headquartered in Eden Prairie, Minnesota.

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.

Stratasys Ltd. has a Value Score of 66, which is considered to be undervalued.

Stratasys Ltd.’s price-to-book ratio is higher than its peers. This could make Stratasys Ltd. less attractive for value investors when compared to the industry median at 2.18.

You can read more about Stratasys 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.

Wabash National Corporation’s Value Grade

Value Grade:

Wabash National Corporation provides connected solutions for the transportation, logistics, and distribution industries primarily in the United States. The company operates through two segments, Transportation Solutions and Parts & Services. The Transportation Solutions segment designs and manufactures transportation-related equipment and products dry and refrigerated van trailers, platform trailers, tank trailers, and truck-mounted tanks; truck bodies for dry-freight transportation; cargo and cargo XL bodies for commercial applications; refrigerated truck bodies; platform truck bodies; and used trailers, as well as laminated hardwood oak flooring products. The Parts & Services segment provides aftermarket parts and services; steel flatbed bodies, truck body mounting, shelving for package delivery, partitions, roof racks, hitches, liftgates, thermal solutions, and others; truck body repair parts; and door repair and replacement, collision repair, and basic maintenance services. It also develops and scales a digital marketplace for the transportation and logistics distribution industry; operates a parts and services distribution platform; and stainless steel storage tanks and silos, mixers, and processors for the dairy, food and beverage, pharmaceutical, chemical, craft brewing, and biotech markets; trailers as a service; and composite products, including truck bodies, overhead doors, and other industrial application products, as well as used trailers. The company offers its products under the Wabash, DuraPlate, DuraPlateHD, DuraPlate AeroSkirt, and AeroSkirt CX brands, as well as EcoNex brand. It serves its products to truckload common carriers, leasing companies, private fleet carriers, less-than-truckload common carriers, and package carriers. Wabash National Corporation was founded in 1985 and is headquartered in Lafayette, Indiana.

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.

Wabash National Corporation has a Value Score of 92, which is considered to be undervalued.

Wabash National Corporation’s price-to-book ratio is higher than its peers. This could make Wabash National Corporation less attractive for value investors when compared to the industry median at 2.18.

You can read more about Wabash National 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 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 5 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.
• Hurco Companies, Inc. stock has a Value Grade of B.
• Miller Industries, Inc. stock has a Value Grade of A.
• Stratasys Ltd. stock has a Value Grade of B.
• Wabash National Corporation stock has a Value Grade of A.

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

• 5 Undervalued Machinery Stocks for Wednesday, November 06
• 5 Undervalued Machinery Stocks for Tuesday, November 05
• 6 Undervalued Machinery Stocks for Monday, November 04
• 7 Undervalued Machinery Stocks for Friday, November 01

AAII Disclaimer

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