Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 7 stocks made the list for top value stocks in the Business Support Services 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 Business Support Services Stock News

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

The fundamental outlook for the business support services industry is neutral. Participants across the sub-industry carry out a wide scope of applications, including payments for goods and services, human resource (HR) payroll processing, and outsourcing. A variety of factors including inflation, pandemic-related impacts and geopolitical tensions have created a difficult set of obstacles for companies to maneuver. However, companies have largely recovered from pandemic-related impacts. Companies overly exposed to consumer groups have experienced larger inflationary pressures. Contractionary measures such as the Federal Reserve continuing to raise interest rates could further dampen consumer spending. It will be important that no other exogenous events emerge, such as intensified geopolitical conflicts disrupting the ongoing recovery in TPV (third party verification), employment levels, etc. Underlying payment economics likely flip to tailwinds as value-added services (VAS) revenue lines help fill the void and provide a “cushion” for upside, especially if other verticals or regions temporarily relax in the interim.

Why Focus on Undervalued Business Support Services 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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7 Undervalued Business Support Services Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 7 undervalued stocks in the Business Support Services industry for Friday, February 17, 2023. Let’s take a closer look at their individual scores to see how they measure up against each other and the Business Support Services 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.

ABM Industries Inc’s Value Grade

Value Grade:

ABM Industries Incorporated is a provider of integrated facility, infrastructure, and mobility solutions. Its segments include Business & Industry (B&I;), Manufacturing & Distribution (M&D;), Education, Aviation, and Technical Solutions. B&I; segment includes janitorial, facilities engineering, and parking services for commercial real estate properties, sports and entertainment venues, and non-acute healthcare facilities. M&D; segment provides facility services, engineering, janitorial, and other specialized services in manufacturing and distribution. Education segment delivers custodial, landscaping and grounds, facilities engineering, and parking services for public school districts, private schools, colleges, and universities. Aviation segment supports airlines and airports with services ranging from parking and janitorial to passenger assistance, catering logistics, air cabin maintenance and transportation. Technical Solutions segment includes mechanical and electrical services.

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.

ABM Industries Inc has a Value Score of 73, which is considered to be undervalued.

When you look at ABM Industries Inc’s price-to-sales ratio at 0.42 compared to the industry median at 2.04, this company has a lower price relative to revenue compared to its peers. This could make ABM Industries Inc’s stock more attractive for value investors.

ABM Industries Inc’s price-earnings ratio is 14.32 compared to the industry median at 21.91. This means it has a lower share price relative to earnings compared to its peers. This could make ABM Industries Inc more attractive for value investors.

Now, let’s assess ABM Industries Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 8.9, when compared to the industry median of 11.7, 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. ABM Industries Inc’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. ABM Industries Inc’s price-to-book ratio is lower than its industry median ratio of 2.57. This could make ABM Industries Inc more attractive to investors looking for a new addition to their portfolio.

ALJ Regional Holdings, Inc.’s Value Grade

Value Grade:

ALJ Regional Holdings, Inc. is a holding company, which operates through its subsidiary, Faneuil, Inc. (Faneuil). Faneuil provides call center services to commercial and governmental clients across the United States. The Faneuil segment is specialized in designing, implementing managing and operating multichannel customer care, back-office business processing, and solution as a service (SaaS) offerings for government and commercial clients operating in complex, regulated environments nationwide.

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.

ALJ Regional Holdings, Inc. has a Value Score of 86, which is considered to be undervalued.

ALJ Regional Holdings, Inc.’s price-earnings ratio is 1.3 compared to the industry median at 21.9. This means that it has a lower price relative to its earnings compared to its peers. This makes ALJ Regional Holdings, Inc. more attractive for value investors.

ALJ Regional Holdings, Inc.’s price-to-book ratio is higher than its peers. This could make ALJ Regional Holdings, Inc. less attractive for value investors when compared to the industry median at 2.57.

You can read more about ALJ Regional 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.

Geo Group Inc’s Value Grade

Value Grade:

The GEO Group, Inc. owns, leases and operates a range of secure facilities including maximum, medium and minimum-security facilities, processing centers, as well as community-based reentry facilities. The Company provides technologies and monitoring services, and evidence-based supervision and treatment programs for community-based programs. It also provides transportation services domestically and in the United Kingdom through GEOAmey PECS Ltd. It operates through four segments. U.S. Secure Services segment primarily encompasses its U.S.-based public-private partnership secure services business. Its Electronic Monitoring and Supervision Services segment, which conducts its services in the U.S., consists of its electronic monitoring and supervision services. Reentry Services segment consists of various community-based and reentry services. International Services segment primarily consists of its public-private partnership secure services operations in Australia and South Africa.

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.

Geo Group Inc has a Value Score of 79, which is considered to be undervalued.

Geo Group Inc’s price-earnings ratio is 19.7 compared to the industry median at 21.9. This means that it has a lower price relative to its earnings compared to its peers. This makes Geo Group Inc more attractive for value investors.

Geo Group Inc’s price-to-book ratio is higher than its peers. This could make Geo Group Inc less attractive for value investors when compared to the industry median at 2.57.

You can read more about Geo Group 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.

H&E; Equipment Services, Inc.’s Value Grade

Value Grade:

H&E; Equipment Services, Inc. is an integrated equipment services company. Its segments include equipment rentals, used equipment sales, new equipment sales, parts sales, and repair and maintenance services. Its equipment rentals segment rents its core types of construction and industrial equipment. Its used equipment sales segment is engaged in the sale of used equipment from its rental fleet, as well as from sales of inventoried equipment. Its new equipment sales segment is engaged in selling equipment through a professional in-house retail sales force. Its parts sales segment provides parts to its own rental fleet and sells parts for the equipment it sells. It also maintains a parts inventory. Its repair and maintenance services segment provides services to its own rental fleet and for its customers owned equipment. It provides ongoing preventative maintenance services. The Company provides ancillary equipment support activities, including transportation, hauling, and parts shipping.

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.

H&E; Equipment Services, Inc. has a Value Score of 61, which is considered to be undervalued.

H&E; Equipment Services, Inc.’s price-earnings ratio is 17.8 compared to the industry median at 21.9. This means that it has a lower price relative to its earnings compared to its peers. This makes H&E; Equipment Services, Inc. more attractive for value investors.

H&E; Equipment Services, Inc.’s price-to-book ratio is lower than its peers. This could make H&E; Equipment Services, Inc. more attractive for value investors when compared to the industry median at 2.57.

You can read more about H&E; Equipment Services, 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.

StarTek, Inc.’s Value Grade

Value Grade:

StarTek, Inc. is a global provider of technology-enabled business process management solutions. The Company operates through six segments: Americas, India and Sri Lanka, Malaysia, Middle East, Argentina and Peru, and Rest of World. The Company provides omni-channel customer experience, digital transformation, and technology services to some of the brands globally. It also provides back-office services such as finance and accounting services, human resource processing services, data management, and spend management services. The Company offers a range of solutions, including Customer Engagement, Omnichannel, Social Media, Analytics & Insights, Work from Home, and Startek Cloud. The Company services clients across a range of industries, such as banking and financial services, insurance, technology, telecoms, healthcare, travel and hospitality, consumer goods, retail and energy and utilities.

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.

StarTek, Inc. has a Value Score of 83, which is considered to be undervalued.

StarTek, Inc.’s price-earnings ratio is 21.9 compared to the industry median at 21.9. This means that it has a higher price relative to its earnings compared to its peers. This makes StarTek, Inc. fairly attractive for value investors.

StarTek, Inc.’s price-to-book ratio is higher than its peers. This could make StarTek, Inc. less attractive for value investors when compared to the industry median at 2.57.

You can read more about StarTek, 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.

TuanChe Ltd (ADR)’s Value Grade

Value Grade:

TuanChe Limited is a China-based company that mainly provides a scalable omni-channel automotive marketplace approach to automotive marketing and distribution. The Company mainly provides offline marketing solutions, referral service for commercial bank and online marketing services and others. The Company offers marketing solutions by integrating our online platform and offline sales events. Its online platform, which consists of its tuanche.com website, apps, official WeChat account, WeChat mini-programs, Cheshangtong, and other mobile outlets, serves as a platform for consumer acquisition and management.

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.

TuanChe Ltd (ADR) has a Value Score of 87, which is considered to be undervalued.

TuanChe Ltd (ADR)’s price-to-book ratio is higher than its peers. This could make TuanChe Ltd (ADR) less attractive for value investors when compared to the industry median at 2.57.

You can read more about TuanChe Ltd (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.

Value Exchange International Inc’s Value Grade

Value Grade:

Value Exchange International, Inc., formerly Sino Payments, Inc., is a credit card processing and merchant-acquiring services company. The Company provides credit card clearing services to merchants and financial institutions in the People's Republic of China (PRC). It provides Internet protocol (IP) processing services in Asia to bank card-accepting merchants. The Company markets its services to local merchants with regional retail locations across Asia Pacific. The Company, through its subsidiaries, is engaged in providing information technology services and solutions, which consists of select services and solutions in computer software programming and integration, computer systems, Internet and information technology systems engineering, consulting, and administration and maintenance, including e-commerce and payment processing.

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.

Value Exchange International Inc has a Value Score of 67, which is considered to be undervalued.

Value Exchange International Inc’s price-earnings ratio is 15.9 compared to the industry median at 21.9. This means that it has a lower price relative to its earnings compared to its peers. This makes Value Exchange International Inc more attractive for value investors.

Value Exchange International Inc’s price-to-book ratio is higher than its peers. This could make Value Exchange International Inc less attractive for value investors when compared to the industry median at 2.57.

You can read more about Value Exchange 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.

Other Business Support Services 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 Business Support Services stocks as well as other industrys.

Choosing Which of the 7 Best Business Support Services 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.

• ABM Industries Inc stock has a Value Grade of B.
• ALJ Regional Holdings, Inc. stock has a Value Grade of A.
• Geo Group Inc stock has a Value Grade of B.
• H&E; Equipment Services, Inc. stock has a Value Grade of B.
• StarTek, Inc. stock has a Value Grade of A.
• TuanChe Ltd (ADR) stock has a Value Grade of A.
• Value Exchange International Inc stock has a Value Grade of B.

Now that you have a bit more background about each of the 7 undervalued stocks in the Business Support Services 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 Business Support Services Stocks

Want to learn more about Business Support Services 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.

• 7 Undervalued Business Support Services Stocks for Friday, February 17
• 7 Undervalued Business Support Services Stocks for Thursday, February 16
• Why Block Inc’s (SQ) Stock Is Down 4.91%
• Why Dlocal Ltd’s (DLO) Stock Is Down 6.10%

AAII Disclaimer

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