Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 4 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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4 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 4 undervalued stocks in the Business Support Services industry for Wednesday, March 29, 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.

Air Lease Corp’s Value Grade

Value Grade:

Air Lease Corporation is an aircraft leasing company. The Company is engaged in purchasing the new technology commercial jet aircraft directly from aircraft manufacturers, such as The Boeing Company (Boeing) and Airbus S.A.S.(Airbus) and leasing those aircraft to airlines throughout the world. In addition to its leasing activities, the Company sells aircraft from its fleet to third parties, including other leasing companies, financial service companies, airlines and other investors. It also provides fleet management services. The Company owns approximately 200 airlines across 70 countries. It operates its business on a global basis, providing aircraft to airline customers in geographical regions, including markets, such as Asia, Europe, the Middle East and Africa, United Stated and Canada, Central America, South America and Mexico, and the Pacific, Australia and New Zealand.

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.

Air Lease Corp has a Value Score of 84, which is considered to be undervalued.

When you look at Air Lease Corp’s price-to-sales ratio at 1.79 compared to the industry median at 1.88, this company has a lower price relative to revenue compared to its peers. This could make Air Lease Corp’s stock more attractive for value investors.

Now, let’s assess Air Lease Corp’s EV/EBITDA ratio, also known as enterprise multiple. At 10.3, when compared to the industry median of 10.9, 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. Air Lease Corp’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. Air Lease Corp’s price-to-book ratio is lower than its industry median ratio of 2.35. This could make Air Lease Corp more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Air Lease Corp’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Air Lease Corp’s price-to-free-cash-flow ratio is lower than its industry median ratio of 17.04. This could make Air Lease Corp more attractive because the lower P/FCF ratio indicates that Air Lease 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.

Costar Technologies Inc’s Value Grade

Value Grade:

Costar Technologies, Inc., through its subsidiaries, develops, designs and distributes a range of security solution products, such as surveillance cameras, lenses, digital video recorders, high speed domes and industrial vision products. Its segments include Costar Video Systems, CostarHD and Other. CostarHD is a provider of video cameras and related products, specializing in Internet protocol (IP) video solutions for traffic monitoring, security, surveillance and military applications; and accessories, such as cables, camera mounts, lenses and data storage devices. It provides solutions for financial institutions, educational facilities, retail stores, manufacturing plants, highways, government buildings, military bases, borders and other applications. The Company's wholly owned subsidiaries include Costar Video Systems, LLC (Costar), Innotech Security, Inc. (Innotech), Arecont Vision Costar, LLC (Arecont Vision), LQ Corporation (LQ) and CostarHD, LLC (CostarHD).

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.

Costar Technologies Inc has a Value Score of 79, which is considered to be undervalued.

Costar Technologies Inc’s price-to-book ratio is higher than its peers. This could make Costar Technologies Inc less attractive for value investors when compared to the industry median at 2.35.

You can read more about Costar Technologies 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.

Nocera Inc’s Value Grade

Value Grade:

Nocera Inc. is engaged in the manufacturing of aquaculture equipment, construction of aquaculture facilities, managing and operating aquaculture facilities, and consulting for third party operators of aquaculture facilities. The Company provides land-based recirculation aquaculture systems (RASs) for fish farming. Its primary business operations consist of the design, development, and production of RASs large scale fish tank systems, for fish farms along with expert consulting, technology transfer, and aquaculture project management services to new and existing aquaculture management business services. It manufactures, sells, and installs RASs for land-based fish farms. Its systems are designed and constructed from used marine shipping containers. It also developed another RASs, a cylindrical shaped tank that holds approximately 15,000 United States gallons of water. It also provides consulting services and solutions for aquaculture projects and provides such services in Taiwan.

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.

Nocera Inc has a Value Score of 84, which is considered to be undervalued.

Nocera Inc’s price-to-book ratio is higher than its peers. This could make Nocera Inc less attractive for value investors when compared to the industry median at 2.35.

You can read more about Nocera 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.

United Rentals, Inc.’s Value Grade

Value Grade:

United Rentals, Inc. is an equipment rental company. The Company operates through two segments: general rentals and specialty. The general rentals segment includes the rental of construction, aerial and industrial equipment, general tools and light equipment, and related services and activities. The general rentals segment?s customers include construction and industrial companies, manufacturers, utilities, municipalities and homeowners. The Company's specialty segment includes the rental of specialty construction products, such as trench safety equipment; power and heating, ventilation, and air conditioning (HVAC) equipment; fluid solutions equipment, and mobile storage equipment and modular office space. The specialty segment?s customers include construction companies engaged in infrastructure projects, municipalities and industrial companies. It operates throughout the United States, Canada, Europe, Australia and New Zealand. Its subsidiary is United Rentals (North America), 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.

United Rentals, Inc. has a Value Score of 64, which is considered to be undervalued.

United Rentals, Inc.’s price-earnings ratio is 12.6 compared to the industry median at 22.3. This means that it has a lower price relative to its earnings compared to its peers. This makes United Rentals, Inc. more attractive for value investors.

United Rentals, Inc.’s price-to-book ratio is lower than its peers. This could make United Rentals, Inc. more attractive for value investors when compared to the industry median at 2.35.

You can read more about United Rentals, 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 4 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.

• Air Lease Corp stock has a Value Grade of A.
• Costar Technologies Inc stock has a Value Grade of B.
• Nocera Inc stock has a Value Grade of A.
• United Rentals, Inc. stock has a Value Grade of B.

Now that you have a bit more background about each of the 4 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.

• 4 Undervalued Business Support Services Stocks for Wednesday, March 29
• 3 Undervalued Business Support Services Stocks for Tuesday, March 28
• Why Brightview Holdings Inc’s (BV) Stock Is Down 5.39%
• Why Cass Information Systems’s (CASS) Stock Is Down 4.38%

AAII Disclaimer

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