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. 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 Monday, May 01, 2023. 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.

DXP Enterprises Inc’s Value Grade

Value Grade:

DXP Enterprises, Inc. is engaged in the business of distributing maintenance, repair and operating (MRO) products, equipment and services to energy and industrial customers. The Company?s segments include Service Centers (SC), Supply Chain Services (SCS) and Innovative Pumping Solutions (IPS). The SC segment is engaged in providing MRO products, equipment and services, including technical expertise and logistics capabilities, to a variety of customers serving varied end markets with the ability to provide same day delivery. Its IPS segment provides integrated, custom pump skid packages, pump remanufacturing and manufactures branded private label pumps to meet the capital equipment needs of its global customer base. Its SCS segment manages all or part of its customers? supply chains, including procurement and inventory management. It operates from over 180 locations which include 37 states in the United States, nine provinces in Canada, and one location in Dubai.

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.

DXP Enterprises Inc has a Value Score of 61, which is considered to be undervalued.

When you look at DXP Enterprises Inc’s price-to-sales ratio at 0.31 compared to the industry median at 1.70, this company has a lower price relative to revenue compared to its peers. This could make DXP Enterprises Inc’s stock more attractive for value investors.

DXP Enterprises Inc’s price-earnings ratio is 10.23 compared to the industry median at 21.58. This means it has a lower share price relative to earnings compared to its peers. This could make DXP Enterprises Inc more attractive for value investors.

Now, let’s assess DXP Enterprises Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 6.9, 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. DXP Enterprises Inc’s shareholder yield is higher than its industry median ratio of 0.93%. 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. DXP Enterprises Inc’s price-to-book ratio is lower than its industry median ratio of 2.11. This could make DXP Enterprises Inc more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at DXP Enterprises Inc’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. DXP Enterprises Inc’s price-to-free-cash-flow ratio is higher than its industry median ratio of 37.94. This could make DXP Enterprises Inc less attractive because the higher P/FCF ratio indicates that DXP Enterprises Inc 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.

Eastern Company’s Value Grade

Value Grade:

The Eastern Company is engaged in designing, manufacturing, and selling engineered solutions to industrial markets. The Company?s operations consist of Big 3 Precision, Eberhard, and Velvac. These businesses design, manufacture, and market a diverse product line of custom and standard vehicular and industrial hardware, including turnkey returnable packaging solutions, access and security hardware, mirrors, and mirror-cameras. Big 3 Products and Big 3 Mold?s turnkey returnable packaging solutions are used in the assembly processes of vehicles, aircraft, and durable goods and in the production processes of plastic packaging products, packaged consumer goods and pharmaceuticals. Velvac is a provider of aftermarket components for the heavy-duty truck market in North America. Eberhard offers a product line of rotary latches, compression latches, draw latches, hinges, camlocks, key switches, padlocks, and handles, as well as comprehensive development and program management 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.

Eastern Company has a Value Score of 77, which is considered to be undervalued.

Eastern Company’s price-earnings ratio is 10.0 compared to the industry median at 21.6. This means that it has a lower price relative to its earnings compared to its peers. This makes Eastern Company more attractive for value investors.

Eastern Company’s price-to-book ratio is higher than its peers. This could make Eastern Company less attractive for value investors when compared to the industry median at 2.11.

You can read more about Eastern Company’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.

Lifeloc Technologies Inc’s Value Grade

Value Grade:

Lifeloc Technologies, Inc. is a manufacturer of evidential breath alcohol testers and related training and supplies for workplace, law enforcement, corrections, and international customers. The Company designs, produces and sells fuel-cell based breath alcohol testing equipment. It operates through two segments: Products and Rentals. The Products segment is engaged in the sale of physical products, including portable hand-held breathalyzers and related accessories, supplies, education, training, and royalties from development contracts with original equipment manufacturers (OEMs). The Rentals segment is engaged in the rental of a portion of its building. In addition, the Company offers a line of supplies, accessories, services, and training to support customers alcohol testing programs. It sells globally through distributors as well as directly to users. It sells certain of its components to customers for incorporation into their own product lines and for resale under their own name.

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.

Lifeloc Technologies Inc has a Value Score of 82, which is considered to be undervalued.

Lifeloc Technologies Inc’s price-to-book ratio is higher than its peers. This could make Lifeloc Technologies Inc less attractive for value investors when compared to the industry median at 2.11.

You can read more about Lifeloc 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.

Medavail Holdings Inc’s Value Grade

Value Grade:

MedAvail Holdings, Inc. is a pharmacy technology and services company. The Company is focused on developing and commercializing a self-service pharmacy, mobile application, and kiosk. Its core technology and product, the MedAvail MedCenter (the MedCenter), is a pharmacist-controlled, patient-interactive, prescription dispensing system akin to a pharmacy in a box. It operates through two segments: Retail Pharmacy Services and Pharmacy Technology. The Retail Pharmacy Services segment operates as SpotRx, or the Pharmacy, which is a full-service retail pharmacy utilizing its automated pharmacy technology, primarily servicing Medicare patients in the United States. The Pharmacy Technology segment, through its MedAvail Technologies, Inc., develops and commercializes the MedCenter for direct sale or subscription to third-party customers, including some of the healthcare providers and systems, as well as large retail chains that provide full retail-pharmacy services using its technology.

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 63, which is considered to be undervalued.

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 2.11.

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.

NL Industries Inc’s Value Grade

Value Grade:

NL Industries, Inc. is a holding company. The Company operates in the component products industry through its subsidiary, CompX International Inc (CompX). CompX is a manufacturer of engineered components utilized in a variety of applications and industries. Through its Security Products operations, CompX manufactures mechanical and electronic cabinet locks and other locking mechanisms used in postal, recreational transportation, office and institutional furniture, cabinetry, tool storage and healthcare applications. CompX also manufactures wake enhancement systems, stainless steel exhaust systems, gauges, throttle controls, trim tabs and related hardware and accessories for the recreational marine and other industries through its Marine Components operations. It also operates in the chemicals industry through its noncontrolling interest in Kronos Worldwide, Inc (Kronos). Kronos is a global producer and marketer of value-added titanium dioxide pigments (TiO2), a base industrial product.

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.

NL Industries Inc has a Value Score of 67, which is considered to be undervalued.

NL Industries Inc’s price-earnings ratio is 9.3 compared to the industry median at 21.6. This means that it has a lower price relative to its earnings compared to its peers. This makes NL Industries Inc more attractive for value investors.

NL Industries Inc’s price-to-book ratio is higher than its peers. This could make NL Industries Inc less attractive for value investors when compared to the industry median at 2.11.

You can read more about NL Industries 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.

NN Inc’s Value Grade

Value Grade:

NN, Inc. is a diversified industrial company. The Company combines advanced engineering and production capabilities with materials science to design and manufacture high-precision components and assemblies. The Company operates through two segments: Mobile Solutions and Power Solutions. Mobile Solutions segment manufactures components for use in power steering, braking, transmissions and gasoline fuel system applications, along with components utilized in heating, ventilation and air conditioning and diesel injection and diesel emissions treatment applications. The segment?s technical capabilities can be utilized in various applications, including for use in battery electric, hybrid electric, and internal combustion engine vehicles. Power Solutions segment manufactures a range of products, including electrical contacts, connectors, contact assemblies, and precision stampings for the electrical end market and high-precision products for the aerospace and defence end 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.

NN Inc has a Value Score of 85, which is considered to be undervalued.

NN Inc’s price-to-book ratio is higher than its peers. This could make NN Inc less attractive for value investors when compared to the industry median at 2.11.

You can read more about NN 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 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.

• DXP Enterprises Inc stock has a Value Grade of B.
• Eastern Company stock has a Value Grade of B.
• Lifeloc Technologies Inc stock has a Value Grade of A.
• Medavail Holdings Inc stock has a Value Grade of B.
• NL Industries Inc stock has a Value Grade of B.
• NN Inc stock has a Value Grade of A.

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 Monday, May 01
• 3 Undervalued Industrial Machinery & Equipment Stocks for Friday, April 28
• 3 Undervalued Investment Management & Fund Operators Stocks for Friday, April 28
• Why Stanley Black & Decker Inc’s (SWK) Stock Is Up 4.85%

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