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 Professional & Business Education 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 Professional & Business Education 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.

Click the button below to learn more about A+ Investor and subscribe today.

3 Undervalued Professional & Business Education 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 Professional & Business Education industry for Monday, January 02, 2023. Let’s take a closer look at their individual scores to see how they measure up against each other and the Professional & Business Education 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.

Skillful Craftsman Education Tech Ltd’s Value Grade

Value Grade:

Skillful Craftsman Education Technology Ltd is a holding company mainly engaged in the provision of online education and technology services. The Company is focused on vocational education, and also involve continuing education, basic education and higher education. The Company provides vocational training courses that cover a wide range of subjects such as mechanics, electrical, auto repair and construction. The online education businesses comprise of online vocational training and virtual simulation experimental training, involving three platforms which are lifelong education public service platform, vocational training platform and virtual simulation experimental training platform. The Company also provides clients with technology services, including software development and comprehensive cloud service. The Company conducts its businesses within the China market.

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.

Skillful Craftsman Education Tech Ltd has a Value Score of 85, which is considered to be undervalued.

When you look at Skillful Craftsman Education Tech Ltd’s price-to-sales ratio at 0.93 compared to the industry median at 1.11, this company has a lower price relative to revenue compared to its peers. This could make Skillful Craftsman Education Tech Ltd’s stock more attractive for value investors.

Now, let’s assess Skillful Craftsman Education Tech Ltd’s EV/EBITDA ratio, also known as enterprise multiple. At 0.8, when compared to the industry median of 6.2, 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. Skillful Craftsman Education Tech Ltd’s shareholder yield is lower than its industry median ratio of (0.8%). 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. Skillful Craftsman Education Tech Ltd’s price-to-book ratio is lower than its industry median ratio of 0.97. This could make Skillful Craftsman Education Tech Ltd more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Skillful Craftsman Education Tech Ltd’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Skillful Craftsman Education Tech Ltd’s price-to-free-cash-flow ratio is lower than its industry median ratio of 12.5. This could make Skillful Craftsman Education Tech Ltd more attractive because the lower P/FCF ratio indicates that Skillful Craftsman Education Tech Ltd 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.

Tarena International Inc(ADR)’s Value Grade

Value Grade:

Tarena International, Inc. (Tarena International) is a holding company. The Company, through its subsidiaries, provides professional education services, including professional information technology (IT) training courses and non-IT training courses across the People's Republic of China (PRC). The Company operates through training segment. The Company offers courses in 14 IT subjects and four non-IT subjects, and two K-12 education programs. The Company offers an education platform that combines live distance instruction, classroom-based tutoring and online learning modules. The Company complements the live instruction and tutoring with its learning management system, Tarena Teaching System (TTS). TTS has five core functions, featuring course content, self-assessment exams, student and teaching staff interaction tools, student management tools and an online student community. In addition, the Company offers Tongcheng and Tongmei featuring IT training courses and non-IT training courses.

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.

Tarena International Inc(ADR) has a Value Score of 98, which is considered to be undervalued.

Tarena International Inc(ADR)’s price-earnings ratio is 0.0 compared to the industry median at 19.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Tarena International Inc(ADR) more attractive for value investors.

Tarena International Inc(ADR)’s price-to-book ratio is lower than its peers. This could make Tarena International Inc(ADR) more attractive for value investors when compared to the industry median at 0.97.

You can read more about Tarena International Inc(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.

Universal Technical Institute, Inc.’s Value Grade

Value Grade:

Universal Technical Institute, Inc. is a provider of transportation and technical training programs. The Company offers certificate, diploma or degree programs at approximately 14 campuses across the United States under the banner of several brands, including Universal Technical Institute (UTI), Motorcycle Mechanics Institute and Marine Mechanics Institute (MMI) and NASCAR Technical Institute (NASCAR Tech). Additionally, it offers manufacturer-specific advanced training (MSAT) programs, including student-paid electives, at its campuses and manufacturer or dealer-sponsored training at certain campuses and training centers. The majority of its programs are designed to be completed in 36 to 90 weeks and culminate in a certificate, diploma or associate of occupational studies degree, depending on the program and campus. The Company provides manufacturer-paid MSAT programs using vehicles, equipment, specialty tools, and curricula provided by its manufacturer brand partners.

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.

Universal Technical Institute, Inc. has a Value Score of 71, which is considered to be undervalued.

Universal Technical Institute, Inc.’s price-earnings ratio is 17.5 compared to the industry median at 19.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Universal Technical Institute, Inc. more attractive for value investors.

Universal Technical Institute, Inc.’s price-to-book ratio is higher than its peers. This could make Universal Technical Institute, Inc. less attractive for value investors when compared to the industry median at 0.97.

You can read more about Universal Technical Institute, 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 Professional & Business Education 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 Professional & Business Education stocks as well as other industrys.

Choosing Which of the 3 Best Professional & Business Education 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.

• Skillful Craftsman Education Tech Ltd stock has a Value Grade of A.
• Tarena International Inc(ADR) stock has a Value Grade of A.
• Universal Technical Institute, Inc. stock has a Value Grade of B.

Now that you have a bit more background about each of the 3 undervalued stocks in the Professional & Business Education 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 Professional & Business Education Stocks

Want to learn more about Professional & Business Education 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 Professional & Business Education Stocks for Monday, January, 02
• Is American International Holdings Corp (AMIH) Stock a Good Investment?
• 4 Undervalued Professional & Business Education Stocks for Friday, December, 30
• 5 Undervalued Professional & Business Education Stocks for Thursday, December, 29

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.