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 Industrial Machinery & Equipment 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.

Latest Industrial Machinery & Equipment Stock News

Before choosing which top Industrial Machinery & Equipment stock to buy, be sure to conduct proper due diligence: analyze various financial metrics and look at historical data, public statements and news coverage.

Our fundamental investment outlook for the Industrial Machinery & Equipment industry is neutral, reflecting our outlook for a gradual demand recovery in manufacturing and machinery usage in the U.S. and a gradual (and volatile) global recovery from Covid-19. In 2021, we expect a return to growth in the European economy, with most growth weighted towards the second half of the year. 2021 growth in China will likely be in the 8%-11% range, aided by government spending and strong export levels. There has been little enforcement of the Phase 1 trade deal between the U.S. and China signed in January of 2020, but we expect a new U.S. administration and recovery from the Covid-19 pandemic to shift focus back to trade in late 2021 or early 2022. Under new U.S. president Biden, we expect a change in foreign trade relations and think there will be more predictability in trade actions. According to the Federal Reserve, May 2021 industrial production expanded 0.8% to 99.9% vs. 99.0% in April (compared to the 2017 average). Manufacturing utilization was 75.6% in May, vs. 74.9% in April. For 2021, we expect average manufacturing utilization to remain volatile and below the 78.2% long-term average (1972-2019), reflecting supply shortages and supply chain delays. Total capacity utilization for the industrial sector increased slightly to 75.2% in May from 74.6% in April. We expect the 2021 rate to continue to exceed the all-time low of 66.7% in June 2009, but be shy of the historical average of 79.6%. Recent national PMI (Purchasing Managers' Index) data indicates continuing economic expansion in the manufacturing sector. A score above 50 generally indicates expansion of the manufacturing economy over the next three to six months. The most recent reading was above this threshold. Demand levels are rising rapidly, which is actually putting stress on suppliers who are struggling to keep up with the rate of demand growth. Lead times are elongated, materials are in shortage, commodity prices are rising, and freight costs and logistics are creating headwinds.

Why Focus on Undervalued Industrial Machinery & Equipment 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 Industrial Machinery & Equipment 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 Industrial Machinery & Equipment industry for Thursday, December 29, 2022. Let’s take a closer look at their individual scores to see how they measure up against each other and the Industrial Machinery & Equipment 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.

Fathom Digital Manufacturing Corp’s Value Grade

Value Grade:

Fathom Digital Manufacturing Corporation is engaged in offering on-demand digital manufacturing services. It offers on-demand digital manufacturing platforms in North America and serves the product development and low- to mid-volume manufacturing needs of the companies in the world. It blends in-house capabilities across plastic and metal additive technologies, computerized numerical control (CNC) machining, injection molding and tooling, sheet metal fabrication, and design and engineering. Its technical knowledge and integrated, software-driven approach underpin a suite of capabilities, with over 25 manufacturing processes spread across 12 manufacturing facilities with nearly 450,000 square feet of manufacturing capacity in the United States. It serves clients across sectors, such as technology, defense, aerospace, medical, automotive and Internet of things (IoT). It delivers hybridized solutions designed to meet the needs of its customers.

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.

Fathom Digital Manufacturing Corp has a Value Score of 83, which is considered to be undervalued.

When you look at Fathom Digital Manufacturing Corp’s price-to-sales ratio at 0.49 compared to the industry median at 1.15, this company has a lower price relative to revenue compared to its peers. This could make Fathom Digital Manufacturing Corp’s stock more attractive for value investors.

Now, let’s assess Fathom Digital Manufacturing Corp’s EV/EBITDA ratio, also known as enterprise multiple. At 18.6, when compared to the industry median of 10.3, 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. Fathom Digital Manufacturing Corp’s shareholder yield is lower than its industry median ratio of 0.0%. 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. Fathom Digital Manufacturing Corp’s price-to-book ratio is higher than its industry median ratio of 1.94. This could make Fathom Digital Manufacturing Corp less attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Fathom Digital Manufacturing Corp’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Fathom Digital Manufacturing Corp’s price-to-free-cash-flow ratio is lower than its industry median ratio of 23.4. This could make Fathom Digital Manufacturing Corp more attractive because the lower P/FCF ratio indicates that Fathom Digital Manufacturing Corp 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.

Luxfer Holdings PLC’s Value Grade

Value Grade:

Luxfer Holdings PLC is a global industrial company that is focused on niche applications in materials engineering. The Company's Gas Cylinders segment manufactures and markets specialized products using composites and aluminum, including pressurized cylinders for use in various applications, including self-contained breathing apparatus (SCBA) for firefighters, containment of oxygen and other medical gases for healthcare, alternative fuel vehicles, and general industrial. Its Elektron segment focuses on specialty materials based primarily on magnesium and zirconium, with product lines, including advanced lightweight magnesium alloys with a variety of uses across a variety of industries; magnesium powders for use in countermeasure flares, as well as heater meals; photoengraving plates for graphic arts; and high-performance zirconium-based materials and oxides used as catalysts and in the manufacture of advanced ceramics, fiber-optic fuel cells, and various other performance products.

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.

Luxfer Holdings PLC has a Value Score of 71, which is considered to be undervalued.

Luxfer Holdings PLC’s price-earnings ratio is 12.3 compared to the industry median at 18.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Luxfer Holdings PLC more attractive for value investors.

Luxfer Holdings PLC’s price-to-book ratio is lower than its peers. This could make Luxfer Holdings PLC more attractive for value investors when compared to the industry median at 1.94.

You can read more about Luxfer Holdings PLC’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.

Medavail Holdings Inc’s Value Grade

Value Grade:

MedAvail Holdings, Inc. (MedAvail) is a technology-enabled retail pharmacy company. The Company has developed and commercialized a pharmacy, mobile application, kiosk and drive-thru solution. MedAvail provides turnkey in-clinic pharmacy services through its robotic dispensing platform, MedCenter, and home delivery operations, to medicare clinics, which is similar to a pharmacy in a box or prescription-dispensing automated teller machine (ATM). The MedCenter facilitates live pharmacist counseling through two-way audio-video communication with the ability to dispense prescription medicines under pharmacist control. The Company also operates SpotRx, or the Pharmacy, a full-service retail pharmacy utilizing the Company’s automated pharmacy technology. MedAvail operates through two segments: Retail Pharmacy Services Segment and Pharmacy Technology Segment. The Company's subsidiaries include MedAvail Technologies, Inc., MedAvail Technologies (US), Inc., and MedAvail Pharmacy, Inc.

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.

Medavail Holdings Inc has a Value Score of 62, which is considered to be undervalued.

Medavail Holdings Inc’s price-earnings ratio is 0.0 compared to the industry median at 18.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Medavail Holdings Inc more attractive for value investors.

Medavail Holdings Inc’s price-to-book ratio is higher than its peers. This could make Medavail Holdings Inc less attractive for value investors when compared to the industry median at 1.94.

You can read more about Medavail Holdings 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.

Makita Corp (ADR)’s Value Grade

Value Grade:

Makita Corp is a Japan-based company mainly engaged in the manufacture and sale of electric tools, air tools, horticultural equipment, household equipment. The Company operates in four regional segments including Japan, Europe, North America and Asia. The Company provides lithium-ion series products, high-pressure air tool series products, dust collector series products, wireless interlocking series products and disaster preparedness series products.

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.

Makita Corp (ADR) has a Value Score of 62, which is considered to be undervalued.

Makita Corp (ADR)’s price-earnings ratio is 21.6 compared to the industry median at 18.0. This means that it has a higher price relative to its earnings compared to its peers. This makes Makita Corp (ADR) less attractive for value investors.

Makita Corp (ADR)’s price-to-book ratio is higher than its peers. This could make Makita Corp (ADR) less attractive for value investors when compared to the industry median at 1.94.

You can read more about Makita Corp (ADR)’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.

Park-Ohio Holdings Corp.’s Value Grade

Value Grade:

Park-Ohio Holdings Corp. is a diversified international company that provides customers with a supply chain management outsourcing service, capital equipment used on their production lines, and manufactured components used to assemble their products. The Company’s segments include Supply Technologies, Assembly Components and Engineered Products. Its Supply Technologies segment includes production components, such as fasteners, pins, valves, hoses, wire harnesses, clamps and fittings, rubber and plastic components, and other class C and maintenance, repair and operations (MRO) products. Its Assembly Components segment includes extruded and molded rubber and thermoplastic products, fuel filler assemblies, gasoline direct injection systems, control arms, knuckles, engine cradles and brackets, and oil pans. Its Engineered Products include induction heating and melting systems, pipe threading systems, industrial oven systems, forging presses, and forged steel and machined products.

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.

Park-Ohio Holdings Corp. has a Value Score of 89, which is considered to be undervalued.

Park-Ohio Holdings Corp.’s price-earnings ratio is 0.0 compared to the industry median at 18.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Park-Ohio Holdings Corp. more attractive for value investors.

Park-Ohio Holdings Corp.’s price-to-book ratio is lower than its peers. This could make Park-Ohio Holdings Corp. more attractive for value investors when compared to the industry median at 1.94.

You can read more about Park-Ohio Holdings Corp.’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.

Sterling Consolidated Corp’s Value Grade

Value Grade:

Sterling Consolidated Corp. is a holding company, which operates through four subsidiaries, Sterling Seal & Supply, Inc. (Sterling Seal), ADDR Properties, LLC (ADDR), Q5 Ventures, LLC (Q5), and Integrity Cargo Freight Corporation (Integrity). Sterling Seal is engaged primarily in the distribution and sale of O-rings, rubber seals, oil seals, custom molded rubber parts, custom Teflon parts, Teflon rods, O-ring cord, bonded seals, O-ring kits, and stuffing box sealant. ADDR owns an approximately 28,000-square-foot facility in Neptune, NJ. Q5 owns an approximately 5,000-square-foot facility in Apopka, Florida, which is used by Sterling Seal for its Florida operations. Integrity is a freight forwarding business. Integrity is primarily responsible for transporting products that the Company orders from its suppliers back to its warehouse in Neptune, NJ. Integrity shares a facility with Sterling Seal and manages the importation of Sterling Seals products and its exports to various countries.

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.

Sterling Consolidated Corp has a Value Score of 62, which is considered to be undervalued.

Sterling Consolidated Corp’s price-earnings ratio is 14.5 compared to the industry median at 18.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Sterling Consolidated Corp more attractive for value investors.

Sterling Consolidated Corp’s price-to-book ratio is higher than its peers. This could make Sterling Consolidated Corp less attractive for value investors when compared to the industry median at 1.94.

You can read more about Sterling Consolidated Corp’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 Industrial Machinery & Equipment 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 Industrial Machinery & Equipment stocks as well as other industrys.

Choosing Which of the 6 Best Industrial Machinery & Equipment 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.

• Fathom Digital Manufacturing Corp stock has a Value Grade of A.
• Luxfer Holdings PLC stock has a Value Grade of B.
• Medavail Holdings Inc stock has a Value Grade of B.
• Makita Corp (ADR) stock has a Value Grade of B.
• Park-Ohio Holdings Corp. stock has a Value Grade of A.
• Sterling Consolidated Corp stock has a Value Grade of B.

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

Want to learn more about Industrial Machinery & Equipment 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 Industrial Machinery & Equipment Stocks for Thursday, December, 29
• Which Is a Better Investment, Dover Corp or Snap-on Incorporated Stock?
• Which Is a Better Investment, Fortive Corp or Snap-on Incorporated Stock?
• Is Schmitt Industries Inc (SMIT) Stock a Good Investment?

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.