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 Thursday, November 07, 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.

Ambipar Emergency Response’s Value Grade

Value Grade:

Ambipar Emergency Response provides environmental emergency response and industrial field services in Brazil and internationally. The company offers response services for accidents involving hazardous and non-hazardous chemical and non-chemical products and waste, as well as natural disasters, such as fire, flood, and hurricanes; tank cleaning, silo cleaning, asbestos removal, vessel and container cleaning, waste transportation and disposal, soil remediation, turnaround, and decommissioning; and biological emergency management and response services, including epidemics and pandemics. It also provides operates Global Environmental Solutions platform, which offers environmental products and services, including studies of locational alternatives for projects; environmental licensing; construction management; and health, safety, and environment, as well as the execution of environmental programs, management of contaminated areas, effluents, and contaminant waste. It serves clients in various industries, such as chemicals, pulp and paper, mining, oil and gas, logistics, power, steel, meatpacking, cement, and other industries. The company is based in São Paulo, Brazil. Ambipar Emergency Response is a subsidiary of Ambipar Participações e Empreendimentos S.A.

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.

Ambipar Emergency Response has a Value Score of 99, which is considered to be undervalued.

When you look at Ambipar Emergency Response’s price-to-sales ratio at 0.13 compared to the industry median at 1.14, this company has a lower price relative to revenue compared to its peers. This could make Ambipar Emergency Response’s stock more attractive for value investors.

Ambipar Emergency Response’s price-earnings ratio is 10.90 compared to the industry median at 29.30. This means it has a lower share price relative to earnings compared to its peers. This could make Ambipar Emergency Response more attractive for value investors.

Now, let’s assess Ambipar Emergency Response’s EV/EBITDA ratio, also known as enterprise multiple. At 7.8, when compared to the industry median of 12.1, 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. Ambipar Emergency Response’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. Ambipar Emergency Response’s price-to-book ratio is lower than its industry median ratio of 2.12. This could make Ambipar Emergency Response more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Ambipar Emergency Response’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Ambipar Emergency Response’s price-to-free-cash-flow ratio is lower than its industry median ratio of 18.30. This could make Ambipar Emergency Response more attractive because the lower P/FCF ratio indicates that Ambipar Emergency Response 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.

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 77, which is considered to be undervalued.

Avalon Holdings Corporation’s price-earnings ratio is 387.1 compared to the industry median at 29.3. 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 2.12.

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.

Deluxe Corporation’s Value Grade

Value Grade:

Deluxe Corporation provides technology-enabled solutions to enterprises, small businesses, and financial institutions in the United States, Canada, and Australia. It operates through Merchant Services, B2B Payments, Data Solutions, and Print segments. The Merchant Services offers credit and debit card authorization and payment systems, as well as processing services primarily to small and medium-sized retail and service businesses. The B2B Payments segment provides treasury management solutions, including remittance and lockbox processing, remote deposit capture, automated receivables management, payment processing, and cash application, as well as automated payables management, such as medical payment and deluxe payment exchange. The Data solutions segment offers data-driven marketing solutions, financial institution profitability reporting, and business incorporation services. The Print segment provides printed personal and business checks, printed business forms, business accessories, and promotional products. It sells through multi-channel sales and marketing, and scalable partnerships. The company was formerly known as Deluxe Check Printers, Incorporated and changed its name to Deluxe Corporation in 1988. Deluxe Corporation was founded in 1915 and is headquartered in Minneapolis, 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.

Deluxe Corporation has a Value Score of 82, which is considered to be undervalued.

Deluxe Corporation’s price-earnings ratio is 24.1 compared to the industry median at 29.3. This means that it has a lower price relative to its earnings compared to its peers. This makes Deluxe Corporation more attractive for value investors.

Deluxe Corporation’s price-to-book ratio is higher than its peers. This could make Deluxe Corporation less attractive for value investors when compared to the industry median at 2.12.

You can read more about Deluxe 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.

Fuel Tech, Inc.’s Value Grade

Value Grade:

Fuel Tech, Inc. provides boiler optimization, efficiency improvement, and air pollution reduction and control solutions to utility and industrial customers worldwide. The company operates through Air Pollution Control Technology and FUEL CHEM Technology segments. The Air Pollution Control Technology segment offers technologies to reduce nitrogen oxide (NOx) emissions in flue gas from boilers, incinerators, furnaces, and other stationary combustion sources; NOxOUT and HERT selective non-catalytic reduction systems; selective catalytic reduction systems comprising ammonia injection grid, and graduated straightening grid systems; I-NOx systems; ESP Processes and Services; ULTRA technology; and flue gas conditioning systems. The FUEL CHEM Technology segment provides programs to improve the efficiency, reliability, fuel flexibility, boiler heat rate, and environmental status of combustion units by controlling slagging, fouling, corrosion, opacity, and acid plume, as well as the formation of sulfur trioxide, ammonium bisulfate, particulate matter, sulfur dioxide, and carbon dioxide through the addition of chemicals into the furnace using TIFI targeted in-furnace injection technology. This segment offers its FUEL CHEM program for plants operating in the electric utility, industrial, pulp and paper, waste-to-energy, and university and district heating markets; and the owners of boilers, furnaces, and other combustion units. Fuel Tech, Inc. was incorporated in 1987 and is headquartered in Warrenville, 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.

Fuel Tech, Inc. has a Value Score of 70, which is considered to be undervalued.

Fuel Tech, Inc.’s price-to-book ratio is higher than its peers. This could make Fuel Tech, Inc. less attractive for value investors when compared to the industry median at 2.12.

You can read more about Fuel Tech, 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.

Pitney Bowes Inc.’s Value Grade

Value Grade:

Pitney Bowes Inc., a shipping and mailing company, provides technology, logistics, and financial services to small and medium-sized businesses, large enterprises, retailers, and government clients in the United States and internationally. It operates through Global Ecommerce, Presort Services, and SendTech Solutions segments. The Global Ecommerce segment provides domestic parcel services, cross-border solutions, and digital delivery services. The Presort Services segment offers mail sortation services, which allow clients to qualify volumes of first-class mail, marketing mail, marketing mail flats, and bound printed matter for postal work sharing discounts. The SendTech Solutions segment provides physical and digital mailing and shipping technology solutions, and other applications for sending, tracking and receiving of letters, parcels, and flats as well as financing alternatives to finance equipment and product purchases. It markets its products, solutions, and services through direct and inside sales force, global and regional partner channels, direct mailings, and digital channels. The company was formerly known as Pitney Bowes Postage Meter Company. Pitney Bowes Inc. was incorporated in 1920 and is headquartered in Stamford, Connecticut.

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.

Pitney Bowes Inc. has a Value Score of 76, which is considered to be undervalued.

You can read more about Pitney Bowes 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 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.

• Ambipar Emergency Response stock has a Value Grade of A.
• Avalon Holdings Corporation stock has a Value Grade of B.
• Deluxe Corporation stock has a Value Grade of A.
• Fuel Tech, Inc. stock has a Value Grade of B.
• Pitney Bowes Inc. 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.

• 5 Undervalued Commercial Services & Supplies Stocks for Thursday, November 07
• 6 Undervalued Commercial Services & Supplies Stocks for Wednesday, November 06
• 4 Undervalued Commercial Services & Supplies Stocks for Tuesday, November 05
• 4 Undervalued Commercial Services & Supplies Stocks for Monday, November 04

AAII Disclaimer

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