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 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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3 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 3 undervalued stocks in the Business Support Services industry for Thursday, May 25, 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.

Acacia Research Corp’s Value Grade

Value Grade:

Acacia Research Corporation is a capital platform that purchases businesses based on the differentials between public and private market valuations. The Company operates through two segments: Intellectual Property Operations and Industrial Operations. The Company?s Intellectual Property Operations segment invests in intellectual property (IP) and related absolute return assets and engages in the licensing and enforcement of patented technologies. Through its patent licensing, enforcement and technologies businesses, the Company is a principal in the licensing and enforcement of patent portfolios, with its operating subsidiaries obtaining the rights in the patent portfolio or purchasing the patent portfolio outright. The Company?s Industrial Operations segment is engaged in the design and manufacture of printers and consumable products for various industrial printing applications. Its printers consist of hardware and embedded software. Its consumable products include inked ribbons.

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.

Acacia Research Corp has a Value Score of 64, which is considered to be undervalued.

When you look at Acacia Research Corp’s price-to-sales ratio at 2.97 compared to the industry median at 1.61, this company has a higher price relative to revenue compared to its peers. This could make Acacia Research Corp’s stock less attractive for value investors.

Now, let’s assess Acacia Research Corp’s EV/EBITDA ratio, also known as enterprise multiple. At 3.7, when compared to the industry median of 11.3, 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. Acacia Research Corp’s shareholder yield is lower 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. Acacia Research Corp’s price-to-book ratio is lower than its industry median ratio of 2.32. This could make Acacia Research Corp more attractive to investors looking for a new addition to their portfolio.

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 75, which is considered to be undervalued.

Nocera Inc’s price-to-book ratio is lower than its peers. This could make Nocera Inc fairly attractive for value investors when compared to the industry median at 2.32.

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.

Repay Holdings Corp’s Value Grade

Value Grade:

Repay Holdings Corporation is a payments technology company. The Company provides integrated payment processing solutions to industry-oriented markets in which clients have specific transaction processing needs. Its segments include Consumer Payments and Business Payments. The Consumer Payments segment provides payment processing solutions, including debit and credit card processing, Automated Clearing House (ACH) processing and other electronic payment acceptance solutions, as well as its loan disbursement product that enable its clients to collect payments and disburse funds to consumers and includes its clearing and settlement solutions (RCS) and Blue Cow Software business (BCS). Business Payments segment provides payment processing solutions, including accounts payable automation, debit and credit card processing, virtual credit card processing, ACH processing and other electronic payment acceptance solutions that enable its clients to collect or send payments to other businesses.

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.

Repay Holdings Corp has a Value Score of 66, which is considered to be undervalued.

Repay Holdings Corp’s price-to-book ratio is higher than its peers. This could make Repay Holdings Corp less attractive for value investors when compared to the industry median at 2.32.

You can read more about Repay Holdings Corp’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 3 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.

• Acacia Research Corp stock has a Value Grade of B.
• Nocera Inc stock has a Value Grade of B.
• Repay Holdings Corp stock has a Value Grade of B.

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

• 3 Undervalued Business Support Services Stocks for Thursday, May 25
• 3 Undervalued Business Support Services Stocks for Wednesday, May 24
• Why Global Blue Group Holding Ltd’s (GB) Stock Is Down 6.53%
• Why PagSeguro Digital Ltd’s (PAGS) Stock Is Down 4.53%

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.