Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 4 stocks made the list for top value stocks in the Computer Hardware 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 Computer Hardware Stock News

Before choosing which top Computer Hardware 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 outlook for technology and computer hardware is generally positive. While the past year has been hectic between the pandemic, semiconductor chip shortages, and trade talks, there are encouraging signs of improvement. With rising demand for computers by consumers, a backlog of orders is expected to generate 18-20% growth in computer sales. Computer and table sales increased throughout 2020 with people working from home, and growth is expected to continue with work from home becoming more viable for many consumers. Another focus for computer hardware is wearable technology. Smart devices are becoming commonplace amongst consumers, with growth expected to be increase into the double digits throughout 2022. According to the Business Research Company, the global computer hardware market is expected to grow from $862.93 billion in 2020 to $944.09 billion in 2021 at a compound annual growth rate (CAGR) of 9.4%. The market is expected to reach $1178.15 billion in 2025 at a CAGR of 6%.

Why Focus on Undervalued Computer Hardware 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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4 Undervalued Computer Hardware Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 4 undervalued stocks in the Computer Hardware industry for Wednesday, November 15, 2023. Let’s take a closer look at their individual scores to see how they measure up against each other and the Computer Hardware 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.

Dell Technologies Inc’s Value Grade

Value Grade:

Dell Technologies Inc. is an end-to-end technology provider that designs, develops, manufactures, markets, sells, and supports a range of comprehensive and integrated solutions, products, and services. The Company operates through two segments: Infrastructure Solutions Group (ISG) and Client Solutions Group (CSG). Its ISG segment enables the Company?s customers? digital transformation with solutions that address the fundamental shift to multi-cloud environments, machine learning, artificial intelligence, and data analytics. The Company?s storage portfolio includes traditional as well as next-generation storage solutions, including all-flash arrays, scale-out file, object platforms, hyperconverged infrastructure, and software-defined storage. This segment also offers attached software, peripherals, and services. The CSG segment includes sales to commercial and consumer customers of branded hardware and branded peripherals, as well as services and third-party software and peripherals.

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.

Dell Technologies Inc has a Value Score of 72, which is considered to be undervalued.

When you look at Dell Technologies Inc’s price-to-sales ratio at 0.57 compared to the industry median at 0.70, this company has a lower price relative to revenue compared to its peers. This could make Dell Technologies Inc’s stock more attractive for value investors.

Dell Technologies Inc’s price-earnings ratio is 28.62 compared to the industry median at 20.20. This means it has a higher share price relative to earnings compared to its peers. This could make Dell Technologies Inc less attractive for value investors.

Now, let’s assess Dell Technologies Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 5.4, when compared to the industry median of 11.0, 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. Dell Technologies Inc’s shareholder yield is higher 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.

Lastly, let’s take a look at Dell Technologies Inc’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Dell Technologies Inc’s price-to-free-cash-flow ratio is lower than its industry median ratio of 20.45. This could make Dell Technologies Inc more attractive because the lower P/FCF ratio indicates that Dell Technologies Inc 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.

Ebang International Holdings Inc’s Value Grade

Value Grade:

Ebang International Holdings Inc. is a global blockchain technology and fintech company. The Company has application-specific integrated circuit (ASIC) chip design capability. It is a global Bitcoin mining machine producer. It is a design company for non-functional integrated circuits and ICs. It has technology for designing ASIC chips, channels for obtaining third-party wafer casting capabilities, and capabilities for producing blockchain products. It is focusing on developing its proprietary 5 nm ASIC chip. It has two cryptocurrency exchange platforms and one cross-border payment and foreign exchange platform. The Company also provides telecommunication products and management and maintenance services. Its transmission network products include ETN5000, ETN200, ETN200-E, ETN204G, and EB-MSAP.

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.

Ebang International Holdings Inc has a Value Score of 69, which is considered to be undervalued.

Ebang International Holdings Inc’s price-to-book ratio is higher than its peers. This could make Ebang International Holdings Inc less attractive for value investors when compared to the industry median at 1.47.

You can read more about Ebang International 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.

Insight Enterprises, Inc.’s Value Grade

Value Grade:

Insight Enterprises, Inc. is a technology company. The Company provides end-to-end digital transformation through a portfolio of solutions. The Company operates through three geographical segments: North America, Europe, Middle East, and Africa (EMEA), and Asia-Pacific (APAC). Its offerings in North America and certain countries in EMEA and APAC include hardware, software, and services, including cloud solutions. The Company?s offerings in the remainder of its EMEA and APAC segments consist of software and certain software-related services and cloud solutions. The Company's service offerings include software maintenance, vendor direct support services contracts, cloud / software-as-a-service offerings, insight delivered services, one-call support service contracts, and third-party provided services. The Company?s software maintenance agreements provide its clients with the right to obtain any software upgrades, bug fixes and help desks and other 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.

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

Insight Enterprises, Inc.’s price-earnings ratio is 20.3 compared to the industry median at 20.2. This means that it has a higher price relative to its earnings compared to its peers. This makes Insight Enterprises, Inc. less attractive for value investors.

Insight Enterprises, Inc.’s price-to-book ratio is lower than its peers. This could make Insight Enterprises, Inc. more attractive for value investors when compared to the industry median at 1.47.

You can read more about Insight Enterprises, 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.

Scansource Inc’s Value Grade

Value Grade:

ScanSource, Inc. is a hybrid distributor connecting devices to partners across hardware, software-as-a-service (SaaS), connectivity and cloud. The Company provides technology solutions and services from suppliers of mobility, barcode, point-of-sale (POS), payments, physical security and networking, communications and collaboration, connectivity and cloud services. It segments include Specialty Technology Solutions and Modern Communications & Cloud. Its Specialty Technology Solutions segment includes enterprise mobile computing, data capture, barcode printing, POS, payments, networking, electronic physical security, cyber security and other technologies. Its Modern Communications & Cloud segment includes communications technologies and services for voice, video conferencing, wireless, data networking, cyber security, cable, unified communications and collaboration, cloud and technology services. Its segments operate in the United States, Canada, Brazil and the United Kingdom.

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.

Scansource Inc has a Value Score of 90, which is considered to be undervalued.

Scansource Inc’s price-earnings ratio is 9.4 compared to the industry median at 20.2. This means that it has a lower price relative to its earnings compared to its peers. This makes Scansource Inc more attractive for value investors.

Scansource Inc’s price-to-book ratio is higher than its peers. This could make Scansource Inc less attractive for value investors when compared to the industry median at 1.47.

You can read more about Scansource 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 Computer Hardware 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 Computer Hardware stocks as well as other industrys.

Choosing Which of the 4 Best Computer Hardware 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.

• Dell Technologies Inc stock has a Value Grade of B.
• Ebang International Holdings Inc stock has a Value Grade of B.
• Insight Enterprises, Inc. stock has a Value Grade of B.
• Scansource Inc stock has a Value Grade of A.

Now that you have a bit more background about each of the 4 undervalued stocks in the Computer Hardware 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 Computer Hardware Stocks

Want to learn more about Computer Hardware 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.

• 4 Undervalued Computer Hardware Stocks for Wednesday, November 15
• Why Corsair Gaming Inc’s (CRSR) Stock Is Up 7.36%
• Why Diebold Nixdorf Inc’s (DBD) Stock Is Up 7.08%
• Why Super Micro Computer Inc’s (SMCI) Stock Is Up 14.88%

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