Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 5 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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5 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 5 undervalued stocks in the Business Support Services industry for Wednesday, June 28, 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.

American Cannabis Company Inc’s Value Grade

Value Grade:

American Cannabis Company, Inc. provides advisory and consulting services specific to cannabis industry, design industry-specific products and facilities, and manage a strategic group partnership, which offers both exclusive and non-exclusive customer products commonly used in the industry. The Company operates through four divisions, consulting and professional services; the sale of products and equipment commonly utilized in the cultivation, processing, transportation or retail sale of cannabis; and its licensed owner operator medical marijuana dispensaries and cultivation facilities located in Colorado Springs, Colorado under the trade name Naturaleaf. Its service offerings include cannabis business planning, cannabis business license applications, cultivation build-out oversight services, compliance audit services and cannabis business monitoring. Its product offerings include The Satchel, SoHum Living Soil, High Density Cultivation System and The Cultivation Cube.

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.

American Cannabis Company Inc has a Value Score of 77, which is considered to be undervalued.

When you look at American Cannabis Company Inc’s price-to-sales ratio at 0.08 compared to the industry median at 1.82, this company has a lower price relative to revenue compared to its peers. This could make American Cannabis Company Inc’s stock more attractive for value investors.

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. American Cannabis Company Inc’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. American Cannabis Company Inc’s price-to-book ratio is lower than its industry median ratio of 2.37. This could make American Cannabis Company Inc more attractive to investors looking for a new addition to their portfolio.

American Shared Hospital Services’s Value Grade

Value Grade:

American Shared Hospital Services is a provider of financial and turnkey solutions to cancer treatment centers, hospitals, and large cancer networks worldwide. The Company's products include MR Guided Radiation Therapy Linacs, Advanced Linear Accelerators, Proton Beam Radiation Therapy Operations (PBRT), Brachytherapy systems, and through the Company's GK Financing partnership with Elekta, the Leksell Gamma Knife product and services. The Gamma Knife radiosurgery equipment is a non-invasive treatment for malignant and benign brain tumors, vascular malformations, and trigeminal neuralgia (facial pain). The PBRT is an alternative to traditional external beam, photon-based radiation delivered by linear accelerators. PBRT treats prostate, brain, spine, head and neck, lung, breast, gastrointestinal tract, and pediatric tumors. The Company typically provides the equipment, as well as planning, installation, reimbursement and marketing support 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.

American Shared Hospital Services has a Value Score of 87, which is considered to be undervalued.

American Shared Hospital Services’s price-earnings ratio is 12.8 compared to the industry median at 22.6. This means that it has a lower price relative to its earnings compared to its peers. This makes American Shared Hospital Services more attractive for value investors.

American Shared Hospital Services’s price-to-book ratio is higher than its peers. This could make American Shared Hospital Services less attractive for value investors when compared to the industry median at 2.37.

You can read more about American Shared Hospital Services’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. is a diversified government service provider. The Company is specialized in designing, financing, development and support services for secure facilities, processing centers, and community reentry centers in the United States, Australia, South Africa, and the United Kingdom. The Company operates through four segments: U.S. Secure Services segment, Electronic Monitoring and Supervision Services segment, Reentry Services segment, and International Services segment. U.S. Secure Services segment primarily encompasses its United States-based public-private partnership secure services business. Electronic Monitoring and Supervision Services segment consists of its electronic monitoring and supervision services in in the United States. 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 91, which is considered to be undervalued.

Geo Group Inc’s price-earnings ratio is 6.6 compared to the industry median at 22.6. 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 2.37.

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.

Resources Connection Inc’s Value Grade

Value Grade:

Resources Connection, Inc. is a global consulting company. It operates through three segments: Resources Global Professionals (RGP), Taskforce, and Sitrick. RGP segment is a global business consulting firm focused on project execution services that enable clients operational and change initiatives with experienced and diverse talent. Taskforce segment is a German professional services firm that operates under the taskforce brand. It utilizes a distinct independent contractor/partner business model and infrastructure and focuses on providing senior interim management and project management services to middle-market clients in the German market. Sitrick segment is a crisis communications and public relations firm, which operates under the Sitrick brand, providing corporate, financial, transactional and crisis communication and management services. It specializes in co-delivery of enterprise initiatives precipitated by business transformation, strategic transactions, or regulatory change.

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.

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

Resources Connection Inc’s price-earnings ratio is 8.4 compared to the industry median at 22.6. This means that it has a lower price relative to its earnings compared to its peers. This makes Resources Connection Inc more attractive for value investors.

Resources Connection Inc’s price-to-book ratio is higher than its peers. This could make Resources Connection Inc less attractive for value investors when compared to the industry median at 2.37.

You can read more about Resources Connection 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 provider of technology-enabled business process management solutions. It offers omni-channel customer experience (CX), digital transformation, and technology services. Its geographical segments include the Americas, India and Sri Lanka, Malaysia, Australia, South Africa, and the Rest of the World. It offers a range of CX, technology and back-office support solutions. It offers a range of services, such as customer engagement, omnichannel engagement, social media, customer intelligence analytics, work from home, back-office services and Startek Cloud. Its back-office services include finance and accounting services, human resource processing services, data management and spend management services. Its Startek Cloud is a next generation, hybrid, omni-cloud platform, which is integrated with artificial intelligence capabilities, which enables agents to work in remote and home-based roles. It serves various clients, such as insurance, healthcare, travel, and hospitality.

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 81, which is considered to be undervalued.

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 2.37.

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.

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 5 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.

• American Cannabis Company Inc stock has a Value Grade of B.
• American Shared Hospital Services stock has a Value Grade of A.
• Geo Group Inc stock has a Value Grade of A.
• Resources Connection Inc stock has a Value Grade of A.
• Startek Inc stock has a Value Grade of A.

Now that you have a bit more background about each of the 5 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.

• 5 Undervalued Business Support Services Stocks for Wednesday, June 28
• 6 Undervalued Business Support Services Stocks for Tuesday, June 27
• Why i3 Verticals Inc’s (IIIV) Stock Is Up 4.26%
• Why Nuvei Corp’s (NVEI) Stock Is Up 4.88%

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.