3 Undervalued Machinery Stocks for Tuesday, March 18

Why Focus on Undervalued Machinery 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.

What Goes Into AAII’s Value Grade?

3 Undervalued Machinery 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 Machinery industry for Tuesday, March 18, 2025. Let’s take a closer look at their individual scores to see how they measure up against each other and the Machinery 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).

Value Grade:

Blue Bird Corporation, together with its subsidiaries, designs, engineers, manufactures, and sells school buses in the United States, Canada, and internationally. The company operates through two segments, Bus and Parts. It offers Type C, Type D, and specialty buses; and alternative power options through its propane powered, gasoline powered, compressed natural gas powered, and electric powered school buses, as well as diesel engines. The company also sells replacement bus parts; and provides extended warranties related to its products. Blue Bird Corporation sells its products through drop ship and a network of dealers, as well as directly to fleet operators, the United States government, and state governments; independent service centers; and maintains a parts distribution center. Blue Bird Corporation was founded in 1927 and is headquartered in Macon, Georgia.

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.

Blue Bird Corporation has a Value Score of 65, which is considered to be undervalued.

When you look at Blue Bird Corporation’s price-to-sales ratio at 0.84 compared to the industry median at 1.45, this company has a lower price relative to revenue compared to its peers. This could make Blue Bird Corporation’s stock more attractive for value investors.

Blue Bird Corporation’s price-earnings ratio is 10.90 compared to the industry median at 22.40. This means it has a lower share price relative to earnings compared to its peers. This could make Blue Bird Corporation more attractive for value investors.

Now, let’s assess Blue Bird Corporation’s EV/EBITDA ratio, also known as enterprise multiple. At 6.9, when compared to the industry median of 13.6, 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. Blue Bird Corporation’s shareholder yield is lower than its industry median ratio of 0.60%. 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. Blue Bird Corporation’s price-to-book ratio is higher than its industry median ratio of 2.37. This could make Blue Bird Corporation less attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Blue Bird Corporation’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Blue Bird Corporation’s price-to-free-cash-flow ratio is lower than its industry median ratio of 27.60. This could make Blue Bird Corporation more attractive because the lower P/FCF ratio indicates that Blue Bird Corporation 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.

L.B. Foster Company’s Value Grade

Value Grade:

L.B. Foster Company engages in the provision of engineered and manufactured products and services for the building and infrastructure projects in the United States, Canada, the United Kingdom, and internationally. It operates through two segments: Rail, Technologies, and Services; and Infrastructure Solutions. The Rail, Technologies, and Services segment offers new rail to passenger and short line freight railroads, industrial companies, and rail contractors, as well as used rails; rail accessories, such as track spikes, bolts, angle bars, tie plates, and other products; insulated rail joints and related accessories; fixation fasteners, coverboards, and special accessories; and trackwork products. This segment also provides engineered concrete railroad ties, friction management products and application systems, railroad condition monitoring systems and equipment including wheel impact load detection systems, wayside data collection and management systems, and rockfall, flood, earthworks, and bridge strike monitoring; and aftermarket services. The Infrastructure Solutions segment manufactures precast concrete products for use as restrooms, concession stands, and protective storage buildings under the CXT brand for national, state, and municipal parks; and manufactures sounds walls, bridge beams, box culverts, septic tanks, and other custom pre-stressed and precast concrete products. This segment also provides steel bridge products; corrosion protection solutions; concrete-reinforced steel grid decking, open steel grid deck, aluminum bridge railing, and stay-in-place steel bridge forms; cuts, threads, and paints pipe; threading services for oil and gas production; protective pipeline coating services; and turnkey solutions for metering and injection systems for oil and gas markets. L.B. Foster Company was founded in 1902 and is headquartered in Pittsburgh, Pennsylvania.

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.

L.B. Foster Company has a Value Score of 80, which is considered to be undervalued.

L.B. Foster Company’s price-earnings ratio is 5.2 compared to the industry median at 22.4. This means that it has a lower price relative to its earnings compared to its peers. This makes L.B. Foster Company more attractive for value investors.

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

Value Grade:

Trinity Industries, Inc. provides railcar products and services under the TrinityRail trade name in North America. It operates in two segments, Railcar Leasing and Services Group, and Rail Products Group. The Railcar Leasing and Services Group segment leases freight and tank railcars; originates and manages railcar leases for third-party investors; and provides fleet leasing, management, and administrative services, as well as railcar maintenance and modification services, and other railcar logistics products and services. As of December 31, 2023, it had a fleet of 109,635 railcars. This segment serves industrial shipper and railroad companies operating in agriculture, construction and metals, consumer products, energy, and refined products and chemicals markets. The Rail Products Group segment manufactures freight and tank railcars for transporting various liquids, gases, and dry cargo; and manufactures and sells railcars and related parts and components. This segment serves railroads, leasing companies, and industrial shippers of products in the refined products and chemicals, energy, agriculture, construction and metals, and consumer products markets. It sells or leases products and services through its own sales personnel and independent sales representatives. The company was incorporated in 1933 and is headquartered in Dallas, Texas.

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.

Trinity Industries, Inc. has a Value Score of 66, which is considered to be undervalued.

Trinity Industries, Inc.’s price-earnings ratio is 16.3 compared to the industry median at 22.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Trinity Industries, Inc. more attractive for value investors.

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

Choosing Which of the 3 Best Machinery 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.

• Blue Bird Corporation stock has a Value Grade of B.
• L.B. Foster Company stock has a Value Grade of B.
• Trinity Industries, 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 Machinery 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.

Additional Resources About Machinery Stocks

Want to learn more about Machinery 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.

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