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 Real Estate 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.

Why Focus on Undervalued Real Estate 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 Real Estate 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 Real Estate Services industry for Wednesday, August 02, 2023. Let’s take a closer look at their individual scores to see how they measure up against each other and the Real Estate 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 Strategic Investment Co’s Value Grade

Value Grade:

American Strategic Investment Co. owns a portfolio of commercial real estate. The Company's real estate assets consist of office properties and certain real estate assets that accompany office properties, including retail spaces and amenities. The Company's portfolio is diversified across eight office and retail condominium assets, consisting of 1,163,061 rentable square feet. The Company also invested in real estate assets that accompany office space, including retail spaces with amenities, and may also invest in hospitality assets, residential assets and other property types in New York City. The Company?s subsidiaries include New York City Operating Partnership, L.P., ARC NYC421W54, LLC, ARC NYC400E67, LLC, ARC NYC200RIVER01, LLC, ARC NYC123WILLIAM, LLC, ARC NYC570SEVENTH, LLC, ARC NYC1140SIXTH, LLC, ARG NYC8713FIFTH, LLC, ARG NYC196ORCHARD, LLC and Innovate NYC, LLC.

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 Strategic Investment Co has a Value Score of 86, which is considered to be undervalued.

When you look at American Strategic Investment Co’s price-to-sales ratio at 0.25 compared to the industry median at 0.71, this company has a lower price relative to revenue compared to its peers. This could make American Strategic Investment Co’s stock more attractive for value investors.

Now, let’s assess American Strategic Investment Co’s EV/EBITDA ratio, also known as enterprise multiple. At 275.1, when compared to the industry median of 12.4, the company may be considered overvalued 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. American Strategic Investment Co’s shareholder yield is higher than its industry median ratio of 0.53%. 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 Strategic Investment Co’s price-to-book ratio is lower than its industry median ratio of 2.13. This could make American Strategic Investment Co more attractive to investors looking for a new addition to their portfolio.

Offerpad Solutions Inc’s Value Grade

Value Grade:

Offerpad Solutions Inc. is a tech-enabled platform for residential real estate. It provides streamlined, data driven iBuying and real estate solutions for the on-demand customer. Its digital Solutions Center platform gives users a holistic, customer-centric experience, enabling them to efficiently sell and buy their homes online with streamlined access to ancillary services, such as mortgage and title insurance. Its platform provides a dual approach to helping home sellers. In its Express cash offer service, sellers can access its website or mobile application to receive a cash offer for their home. Its Flex listing service offering renovate and lists a seller?s home for sale. Its platform provides home buyers the opportunity to browse and tour homes online, get instant access to its listings in certain markets with their mobile devices and submit purchase offers online in a simple process on their own time, with or without an agent. It operates in approximately 1,800 cities and towns.

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.

Offerpad Solutions Inc has a Value Score of 70, which is considered to be undervalued.

Offerpad Solutions Inc’s price-to-book ratio is higher than its peers. This could make Offerpad Solutions Inc less attractive for value investors when compared to the industry median at 2.13.

You can read more about Offerpad Solutions 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.

Re/Max Holdings Inc’s Value Grade

Value Grade:

RE/MAX Holdings, Inc. is a franchisor in the real estate industry. The Company franchises real estate brokerages globally under the RE/MAX brand (RE/MAX) and mortgage brokerages in the United States under the Motto Mortgage brand (Motto). The Company operates through three segments: Real Estate, Mortgage and Marketing Funds. The Real Estate segment comprises its real estate brokerage franchising operations under the RE/MAX brand name and corporate-wide shared services expenses. The Mortgage segment is comprised of the Company?s mortgage brokerage franchising operations under the Motto Mortgage brand and mortgage loan processing software and services under the wemlo brand. The Marketing Funds segment represents the Company?s marketing campaigns designed to build and maintain brand awareness for both of its franchise brands and the costs of agent marketing technology, such as kvCORE.

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.

Re/Max Holdings Inc has a Value Score of 70, which is considered to be undervalued.

Re/Max Holdings Inc’s price-earnings ratio is 96.7 compared to the industry median at 39.8. This means that it has a higher price relative to its earnings compared to its peers. This makes Re/Max Holdings Inc less attractive for value investors.

Re/Max Holdings Inc’s price-to-book ratio is higher than its peers. This could make Re/Max Holdings Inc less attractive for value investors when compared to the industry median at 2.13.

You can read more about Re/Max 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.

Other Real Estate 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 Real Estate Services stocks as well as other industrys.

Choosing Which of the 3 Best Real Estate 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 Strategic Investment Co stock has a Value Grade of A.
• Offerpad Solutions Inc stock has a Value Grade of B.
• Re/Max Holdings Inc stock has a Value Grade of B.

Now that you have a bit more background about each of the 3 undervalued stocks in the Real Estate 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 Real Estate Services Stocks

Want to learn more about Real Estate 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 Real Estate Services Stocks for Wednesday, August 02
• What You Need to Know About Newmark Group Inc's Q2 Earnings
• What You Need to Know About CBRE Group Inc's Q2 Earnings
• What You Need to Know About Cushman & Wakefield PLC's Q2 Earnings

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.