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 Commercial Printing 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 Commercial Printing 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 Commercial Printing 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 Commercial Printing Services industry for Monday, October 30, 2023. Let’s take a closer look at their individual scores to see how they measure up against each other and the Commercial Printing 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.

Deluxe Corporation’s Value Grade

Value Grade:

Deluxe Corporation is a payments and business technology company. The Company operates through four segments: Payments, Cloud Solutions, Promotional Solutions and Checks. Its Payments segment includes its treasury management solutions, including remittance and lockbox processing, remote deposit capture, receivables management, payment processing and paperless treasury management; merchant in-store, online and mobile payment solutions; payroll and disbursement services, including Deluxe Payment Exchange, and fraud and security services. Its Cloud Solutions segment includes Web hosting and design services, data-driven marketing solutions and hosted solutions, including digital engagement, logo design, financial institution profitability reporting and business incorporation services. Its Promotional Solutions segment includes business forms, accessories, advertising specialties, promotional apparel and retail packaging. Its Checks segment includes printed business and personal checks.

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.

Deluxe Corporation has a Value Score of 85, which is considered to be undervalued.

When you look at Deluxe Corporation’s price-to-sales ratio at 0.33 compared to the industry median at 0.49, this company has a lower price relative to revenue compared to its peers. This could make Deluxe Corporation’s stock more attractive for value investors.

Deluxe Corporation’s price-earnings ratio is 13.91 compared to the industry median at 12.88. This means it has a higher share price relative to earnings compared to its peers. This could make Deluxe Corporation less attractive for value investors.

Now, let’s assess Deluxe Corporation’s EV/EBITDA ratio, also known as enterprise multiple. At 6.0, when compared to the industry median of 6.0, the company may be considered fairly valued 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. Deluxe Corporation’s shareholder yield is higher than its industry median ratio of 4.90%. 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. Deluxe Corporation’s price-to-book ratio is lower than its industry median ratio of 1.36. This could make Deluxe Corporation more attractive to investors looking for a new addition to their portfolio.

Ennis Inc’s Value Grade

Value Grade:

Ennis, Inc. is engaged in the business of manufacturing, designing and selling business forms and other printed business products, primarily to distributors located in the United States. The Company offers snap sets, continuous forms, laser cut sheets, tags, labels, envelopes, integrated products, jumbo rolls and pressure-sensitive products in short, medium and long runs. The Company?s Adams McClure brand provides point of purchase (POP) advertising; the Admore, Folder Express, and Independent Folders brands provide presentation folders and document folders; Ennis Tag & LabelSM provides custom printed, labels and custom and stock tags; Allen-Bailey Tag & LabelSM, Atlas Tag & Label, Kay Toledo Tag, and Special Service Partners (SSP) provide custom and stock tags and labels; and Trade Envelopes, Block Graphics, Wisco, and National Imprint Corporation provide custom and imprinted envelopes. It operates approximately 54 manufacturing plants throughout the United States in 20 states.

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.

Ennis Inc has a Value Score of 64, which is considered to be undervalued.

Ennis Inc’s price-earnings ratio is 11.8 compared to the industry median at 12.9. This means that it has a lower price relative to its earnings compared to its peers. This makes Ennis Inc more attractive for value investors.

Ennis Inc’s price-to-book ratio is lower than its peers. This could make Ennis Inc more attractive for value investors when compared to the industry median at 1.36.

You can read more about Ennis 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.

TOPPAN Holdings Inc - ADR’s Value Grade

Value Grade:

TOPPAN Holdings Inc, formerly Toppan Inc, is a Japan-based company mainly engaged in a wide range of business activities across three business fields, including information communication business, lifestyle and industrial business, and electronics business. The Company operates through three segments. The Information Communication Business segment provides general securities, passbooks, cards, business forms, catalogs and other advertising materials, magazines, books and other printed materials, and business process outsourcing (BPO). The Lifestyle and Industrial Business segment provides packaging such as flexible packaging materials and paper cartons, and construction materials such as plastic molded products, inks, transparent barrier films, decorative sheets and wallpaper. The Electronics Business segment provides liquid crystal display (LCD) color filters, thin film transistor (TFT) LCDs, anti-reflection films, photomasks, and semiconductor packaging products.

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.

TOPPAN Holdings Inc - ADR has a Value Score of 69, which is considered to be undervalued.

TOPPAN Holdings Inc - ADR’s price-earnings ratio is 20.5 compared to the industry median at 12.9. This means that it has a higher price relative to its earnings compared to its peers. This makes TOPPAN Holdings Inc - ADR less attractive for value investors.

TOPPAN Holdings Inc - ADR’s price-to-book ratio is higher than its peers. This could make TOPPAN Holdings Inc - ADR less attractive for value investors when compared to the industry median at 1.36.

You can read more about TOPPAN Holdings Inc - ADR’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 Commercial Printing 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 Commercial Printing Services stocks as well as other industrys.

Choosing Which of the 3 Best Commercial Printing 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.

• Deluxe Corporation stock has a Value Grade of A.
• Ennis Inc stock has a Value Grade of B.
• TOPPAN Holdings Inc - ADR stock has a Value Grade of B.

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

Want to learn more about Commercial Printing 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 Commercial Printing Services Stocks for Monday, October 30
• Why Cimpress PLC’s (CMPR) Stock Is Down 6.13%
• Why Cimpress PLC’s (CMPR) Stock Is Up 4.61%
• Why Cimpress PLC’s (CMPR) Stock Is Down 4.17%

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.