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 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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3 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 3 undervalued stocks in the Industrial Machinery & Equipment industry for Friday, May 05, 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.

Crane NXT Co’s Value Grade

Value Grade:

Crane NXT, Co., formerly Crane Holdings, Co., is an industrial technology company. The Company provides technology solutions to secure, detect, and authenticate what matters most to its customers. The Company provides advanced micro-optics technology for securing physical products, and its electronic equipment and associated software leverages core capabilities with detection and sensing technologies. Its micro-optic technology protects brands from counterfeiters and fraud. Its advanced image recognition software analyzes various data points in more than 1,000 dimensions while simultaneously referencing 20 algorithms. With its comprehensive management platform, the Company's customers are offered remote diagnostics, payment transaction data, live machine monitoring, consumer analytics, and added revenue streams from its in-house advertising network. It operates manufacturing facilities in the United States, the United Kingdom, Mexico, Japan, Switzerland, Germany, Sweden and Malta.

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.

Crane NXT Co has a Value Score of 84, which is considered to be undervalued.

When you look at Crane NXT Co’s price-to-sales ratio at 0.79 compared to the industry median at 1.64, this company has a lower price relative to revenue compared to its peers. This could make Crane NXT Co’s stock more attractive for value investors.

Crane NXT Co’s price-earnings ratio is 6.68 compared to the industry median at 20.71. This means it has a lower share price relative to earnings compared to its peers. This could make Crane NXT Co more attractive for value investors.

Now, let’s assess Crane NXT Co’s EV/EBITDA ratio, also known as enterprise multiple. At 3.6, 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. Crane NXT Co’s shareholder yield is higher than its industry median ratio of 0.94%. 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. Crane NXT Co’s price-to-book ratio is lower than its industry median ratio of 2.14. This could make Crane NXT Co more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Crane NXT Co’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Crane NXT Co’s price-to-free-cash-flow ratio is lower than its industry median ratio of 37.59. This could make Crane NXT Co more attractive because the lower P/FCF ratio indicates that Crane NXT Co 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.

JE Cleantech Holdings Ltd’s Value Grade

Value Grade:

JE Cleantech Holdings Limited is engaged in the sale of cleaning systems and other equipment and the provision of centralized dishwashing and ancillary services. It manufactures a range of cleaning systems, including aqueous washing systems, plating and cleaning systems, train cleaning systems, and other equipment. It also provides centralized dishwashing services for the food and beverage industry, mainly for food and beverage establishments in Singapore such as food courts, hawker centers, restaurants, cookhouses, eldercare homes, and an inflight catering service provider. It also provides general cleaning services mainly for food courts in Singapore. It provides centralized dishwashing services at its Hygieia Facility in Singapore. It also provides leasing services of dishwashing equipment to its customers. The terms of the leases are typically for a period of one to two years (s) and renew automatically, and its customers are charged a fixed monthly fee for such leasing 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.

JE Cleantech Holdings Ltd has a Value Score of 90, which is considered to be undervalued.

JE Cleantech Holdings Ltd’s price-earnings ratio is 7.6 compared to the industry median at 20.7. This means that it has a lower price relative to its earnings compared to its peers. This makes JE Cleantech Holdings Ltd more attractive for value investors.

JE Cleantech Holdings Ltd’s price-to-book ratio is higher than its peers. This could make JE Cleantech Holdings Ltd less attractive for value investors when compared to the industry median at 2.14.

You can read more about JE Cleantech Holdings Ltd’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 2.14.

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 3 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.

• Crane NXT Co stock has a Value Grade of A.
• JE Cleantech Holdings Ltd stock has a Value Grade of A.
• NN Inc stock has a Value Grade of A.

Now that you have a bit more background about each of the 3 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.

• 3 Undervalued Industrial Machinery & Equipment Stocks for Friday, May 05
• 3 Undervalued Industrial Machinery & Equipment Stocks for Thursday, May 04
• Why Alta Equipment Group Inc’s (ALTG) Stock Is Down 4.09%
• Why Applied Industrial Technologies Inc’s (AIT) Stock Is Down 4.03%

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