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 Supplies 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 Business Support Supplies 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 Supplies 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 Supplies industry for Monday, October 23, 2023. Let’s take a closer look at their individual scores to see how they measure up against each other and the Business Support Supplies 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.

Acme United Corp’s Value Grade

Value Grade:

Acme United Corporation is a supplier of first aid and medical products and cutting technology to the school, home, office, hardware, sporting goods and industrial markets. The Company's business segments consist of the United States, Canada, and Europe. The Company sells its products primarily to mass market and e-commerce retailers, industrial distributors, wholesale, contract and retail stationery distributors, office supply superstores, sporting goods stores, and hardware chains. The Company markets and sells under two core categories: first aid and safety, and cutting, sharpening and measuring. The first aid and safety category include first aid and safety products (First Aid Only, PhysiciansCare, Pac-Kit, Spill Magic, First Aid Central, Med-Nap and Safety Made brands). The cutting, sharpening and measuring category includes school, home and office products (Westcott brand), and hardware, industrial and sporting goods products (Clauss, Camillus, Cuda and DMT brands).

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.

Acme United Corp has a Value Score of 62, which is considered to be undervalued.

When you look at Acme United Corp’s price-to-sales ratio at 0.52 compared to the industry median at 0.48, this company has a higher price relative to revenue compared to its peers. This could make Acme United Corp’s stock less attractive for value investors.

Acme United Corp’s price-earnings ratio is 26.17 compared to the industry median at 20.66. This means it has a higher share price relative to earnings compared to its peers. This could make Acme United Corp less attractive for value investors.

Now, let’s assess Acme United Corp’s EV/EBITDA ratio, also known as enterprise multiple. At 10.2, when compared to the industry median of 9.0, 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. Acme United Corp’s shareholder yield is lower than its industry median ratio of 1.12%. 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. Acme United Corp’s price-to-book ratio is lower than its industry median ratio of 1.39. This could make Acme United Corp more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Acme United Corp’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Acme United Corp’s price-to-free-cash-flow ratio is lower than its industry median ratio of 7.93. This could make Acme United Corp more attractive because the lower P/FCF ratio indicates that Acme United Corp 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.

MillerKnoll Inc’s Value Grade

Value Grade:

MillerKnoll, Inc. is engaged in the research, design, manufacture, selling and distribution of seating products, furniture systems, other freestanding furniture elements, textiles, leather, felt, home furnishings and related services. The Company's segments include Americas Contract, International Contract & Specialty, and Global Retail. The Americas Contract segment includes the operations associated with the design, manufacture and sale of furniture products directly or indirectly through an independent dealership network for office, healthcare, and educational environments throughout North and South America. The International Contract & Specialty segment includes the operations associated with the design, manufacture and sale of furniture products, directly or indirectly through an independent dealership network. The Global Retail segment includes operations associated with the sale of modern design furnishings and accessories to third party retailers.

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.

MillerKnoll Inc has a Value Score of 63, which is considered to be undervalued.

MillerKnoll Inc’s price-earnings ratio is 52.9 compared to the industry median at 20.7. This means that it has a higher price relative to its earnings compared to its peers. This makes MillerKnoll Inc less attractive for value investors.

MillerKnoll Inc’s price-to-book ratio is higher than its peers. This could make MillerKnoll Inc less attractive for value investors when compared to the industry median at 1.39.

You can read more about MillerKnoll 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.

Virco Mfg Corp’s Value Grade

Value Grade:

Virco Mfg. Corporation is engaged in designing, producing, and distributing furniture for a family of customers. The Company is a manufacturer and supplier of movable educational furniture and equipment for the preschool through 12th grade market in the United States. The Company manufactures an assortment of products, including mobile tables, mobile storage equipment, desks, technology tables, chairs, activity tables, folding chairs, and folding tables. In addition, it has also developed products for contemporary applications. These include the ZUMA Series; the Analogy and Civitas furniture collections; the Metaphor and Sage Series items for educational settings; the Plateau and Text Series, and the new Topaz Series. It also supplies furniture and equipment to colleges and universities; convention centers and arenas; the hospitality industry with respect to banquet and meeting facilities; government facilities at the federal, state, county, and municipal levels, and places of worship.

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.

Virco Mfg Corp has a Value Score of 85, which is considered to be undervalued.

Virco Mfg Corp’s price-earnings ratio is 4.4 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 Virco Mfg Corp more attractive for value investors.

Virco Mfg Corp’s price-to-book ratio is lower than its peers. This could make Virco Mfg Corp fairly attractive for value investors when compared to the industry median at 1.39.

You can read more about Virco Mfg 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 Supplies 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 Supplies stocks as well as other industrys.

Choosing Which of the 3 Best Business Support Supplies 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.

• Acme United Corp stock has a Value Grade of B.
• MillerKnoll Inc stock has a Value Grade of B.
• Virco Mfg Corp stock has a Value Grade of A.

Now that you have a bit more background about each of the 3 undervalued stocks in the Business Support Supplies 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 Supplies Stocks

Want to learn more about Business Support Supplies 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 Supplies Stocks for Monday, October 23
• Why ACCO Brands Corp’s (ACCO) Stock Is Down 4.08%
• Why MillerKnoll Inc’s (MLKN) Stock Is Down 6.60%
• Why Steelcase Inc’s (SCS) Stock Is Down 4.06%

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.