Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 3 stocks made the list for top value stocks in the Personal Care Products 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 Personal Care Products 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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3 Undervalued Personal Care Products Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 3 undervalued stocks in the Personal Care Products industry for Wednesday, November 13, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Personal Care Products 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.

Big Tree Cloud Holdings Limited’s Value Grade

Value Grade:

Big Tree Cloud Holdings Limited manufactures and sells personal care products and other consumer goods. The company is based in Shenzhen, China. Big Tree Cloud Holdings Limited operates as a subsidiary of Ploutos Group Limited.

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.

Big Tree Cloud Holdings Limited has a Value Score of 82, which is considered to be undervalued.

Big Tree Cloud Holdings Limited’s price-earnings ratio is 0.30 compared to the industry median at 27.40. This means it has a lower share price relative to earnings compared to its peers. This could make Big Tree Cloud Holdings Limited more attractive for value investors.

Now, let’s assess Big Tree Cloud Holdings Limited’s EV/EBITDA ratio, also known as enterprise multiple. At 72.3, when compared to the industry median of 13.3, 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. Big Tree Cloud Holdings Limited’s shareholder yield is higher than its industry median ratio of (0.40%). 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. Big Tree Cloud Holdings Limited’s price-to-book ratio is lower than its industry median ratio of 1.91. This could make Big Tree Cloud Holdings Limited more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Big Tree Cloud Holdings Limited’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Big Tree Cloud Holdings Limited’s price-to-free-cash-flow ratio is lower than its industry median ratio of 24.75. This could make Big Tree Cloud Holdings Limited more attractive because the lower P/FCF ratio indicates that Big Tree Cloud Holdings Limited 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.

Natural Alternatives International, Inc.’s Value Grade

Value Grade:

Natural Alternatives International, Inc. engages in formulating, manufacturing, and marketing nutritional supplements in the United States and internationally. It operates through two segments: Private-Label Contract Manufacturing, and Patent and Trademark Licensing. The company offers private-label contract manufacturing services to companies that market and distribute vitamins, minerals, herbal, and other nutritional supplements, as well as other health care products. It also provides strategic partnering services, such as customized product formulation, clinical study design and support, manufacturing, marketing support, international regulatory and label law compliance, international product registration, packaging in multiple formats and labeling design, scientific research, proprietary ingredients, customer-specific nutritional product formulation, product testing and evaluation, marketing management, packaging and delivery system design, regulatory review, and international product registration assistance. In addition, the company sells beta-alanine ingredient under the CarnoSyn and SR CarnoSyn names. The company manufactures products in various forms, including capsules, tablets, chewable wafers, and powders. Its private-label contract manufacturing customers include companies that market nutritional supplements through direct sales marketing channels, direct to consumer e-commerce channels, and retail stores. Natural Alternatives International, Inc. was founded in 1980 and is headquartered in Carlsbad, 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.

Natural Alternatives International, Inc. has a Value Score of 89, which is considered to be undervalued.

Natural Alternatives International, Inc.’s price-to-book ratio is higher than its peers. This could make Natural Alternatives International, Inc. less attractive for value investors when compared to the industry median at 1.91.

You can read more about Natural Alternatives 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.

Paranovus Entertainment Technology Ltd.’s Value Grade

Value Grade:

Paranovus Entertainment Technology Ltd., through its subsidiary, engages in the artificial intelligence-powered entertainment industry. The company offers AI entertainment application. It sells its products through website and mobile app. The company was formerly known as Happiness Development Group Limited and changed its name to Paranovus Entertainment Technology Ltd. in March 2023. Paranovus Entertainment Technology Ltd. was founded in 2004 and is based 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.

Paranovus Entertainment Technology Ltd. has a Value Score of 90, which is considered to be undervalued.

Paranovus Entertainment Technology Ltd.’s price-to-book ratio is higher than its peers. This could make Paranovus Entertainment Technology Ltd. less attractive for value investors when compared to the industry median at 1.91.

You can read more about Paranovus Entertainment Technology 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.

Other Personal Care Products 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 Personal Care Products stocks as well as other industrys.

Choosing Which of the 3 Best Personal Care Products 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.

• Big Tree Cloud Holdings Limited stock has a Value Grade of A.
• Natural Alternatives International, Inc. stock has a Value Grade of A.
• Paranovus Entertainment Technology Ltd. stock has a Value Grade of A.

Now that you have a bit more background about each of the 3 undervalued stocks in the Personal Care Products 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 Personal Care Products Stocks

Want to learn more about Personal Care Products 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.

• 3 Undervalued Personal Care Products Stocks for Wednesday, November 13
• 3 Undervalued Personal Care Products Stocks for Tuesday, November 12
• 4 Undervalued Personal Care Products Stocks for Monday, November 11
• 3 Undervalued Personal Care Products Stocks for Friday, November 08

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.