4 Undervalued Machinery Stocks for Wednesday, March 05

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?

4 Undervalued Machinery 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 Machinery industry for Wednesday, March 05, 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:

AGCO Corporation manufactures and distributes agricultural equipment and replacement parts worldwide. It offers horsepower tractors for row crop production, soil cultivation, planting, land leveling, seeding, and commercial hay operations; utility tractors for small- and medium-sized farms, as well as for dairy, livestock, orchards, and vineyards; and compact tractors for small farms, specialty agricultural industries, landscaping, equestrian, and residential uses. The company also provides grain storage bins and related drying and handling equipment systems; seed-processing systems; swine and poultry feed storage and delivery; ventilation and watering systems; and egg production systems and broiler production equipment. In addition, it offers round and rectangular balers, loader wagons, self-propelled windrowers, forage harvesters, disc mowers, spreaders, rakes, tedders, and mower conditioners for harvesting and packaging vegetative feeds used in cattle, dairy, horse, and renewable fuel industries. Further, the company provides implements, including disc harrows leveling seed beds and mixing chemicals with the soils; heavy tillage to break up soil and mix crop residue into topsoil; field cultivators that prepare smooth seed bed and destroy weeds; drills for small grain seeding; planters and other planting equipment; and loaders. Additionally, it offers combines for harvesting grain crops, such as corn, wheat, soybeans, and rice; and application equipment, such as self-propelled, three- and four-wheeled vehicles, and related equipment for liquid and dry fertilizers and crop protection chemicals, and for after crops emerge from the ground, as well as produces diesel engines, gears, and generating sets. The company markets its products under the Fendt, Massey Ferguson, PTx, and Valtra brands through a network of independent dealers and distributors. AGCO Corporation was founded in 1990 and is headquartered in Duluth, 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.

AGCO Corporation has a Value Score of 62, which is considered to be undervalued.

When you look at AGCO Corporation’s price-to-sales ratio at 0.58 compared to the industry median at 1.50, this company has a lower price relative to revenue compared to its peers. This could make AGCO Corporation’s stock more attractive for value investors.

Now, let’s assess AGCO Corporation’s EV/EBITDA ratio, also known as enterprise multiple. At 11.6, 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. AGCO Corporation’s shareholder yield is higher than its industry median ratio of 0.55%. 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. AGCO Corporation’s price-to-book ratio is lower than its industry median ratio of 2.39. This could make AGCO Corporation more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at AGCO Corporation’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. AGCO Corporation’s price-to-free-cash-flow ratio is higher than its industry median ratio of 28.80. This could make AGCO Corporation less attractive because the higher P/FCF ratio indicates that AGCO 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.

Blue Bird Corporation’s Value Grade

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 68, which is considered to be undervalued.

Blue Bird Corporation’s price-earnings ratio is 10.2 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 Blue Bird Corporation more attractive for value investors.

Blue Bird Corporation’s price-to-book ratio is lower than its peers. This could make Blue Bird Corporation more attractive for value investors when compared to the industry median at 2.39.

Value Grade:

China Yuchai International Limited, through its subsidiaries, manufactures, assembles, and sells diesel and natural gas engines for trucks, buses and passenger vehicles, marine, industrial, construction, agriculture, and generator set applications in the People’s Republic of China and internationally. It operates through two segments, Yuchai and HLGE. The Yuchai segment manufactures on- and off-road powertrain solutions and applications. The HLGE is engaged in hospitality and property development activities. The company provides diesel engines comprising 4- and 6-cylinder diesel engines, high horsepower marine diesel engines, and power generator engines; natural gas engines, methanol combustion engines, diesel power generators, diesel engine parts, and remanufacturing services; as well as plug in hybrid engines, range extenders, power generation powertrains, hybrid powertrains, integrated electric drive axel powertrains, and fuel cell systems. It also offers maintenance and retrofitting services. It distributes its engines directly to auto original equipment manufacturers, agents, and retailers. The company was founded in 1951 and is based in Singapore.

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.

China Yuchai International Limited has a Value Score of 98, which is considered to be undervalued.

China Yuchai International Limited’s price-earnings ratio is 15.7 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 China Yuchai International Limited more attractive for value investors.

Value Grade:

Titan International, Inc., together with its subsidiaries, manufactures and sells wheels, tires, and undercarriage systems and components for off-highway vehicles in the United States and internationally. The company operates in Agricultural, Earthmoving/Construction, and Consumer segments. It offers wheels, tires, and undercarriage systems and components for various agricultural equipment, including tractors, combines, skidders, plows, planters, and irrigation equipment. The company also offers wheels, tires, and undercarriage systems and components for off-the-road earthmoving, mining, military, construction, and forestry equipment, including skid steers, aerial lifts, cranes, graders and levelers, scrapers, self-propelled shovel loaders, articulated dump trucks, load transporters, haul trucks, backhoe loaders, crawler tractors, lattice cranes, shovels, and hydraulic excavators. In addition, it provides bias and light truck tires; and products for ATVs, rock climbers, and turf applications, as well as specialty products and train brakes. It sells its products directly to original equipment manufacturers, as well as to the aftermarket through independent distributors, equipment dealers, and its distribution centers. Titan International, Inc. was founded in 1890 and is headquartered in West Chicago, Illinois.

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.

Titan International, Inc. has a Value Score of 72, which is considered to be undervalued.

Titan International, Inc.’s price-to-book ratio is higher than its peers. This could make Titan International, Inc. less attractive for value investors when compared to the industry median at 2.39.

Choosing Which of the 4 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.

• AGCO Corporation stock has a Value Grade of B.
• Blue Bird Corporation stock has a Value Grade of B.
• China Yuchai International Limited stock has a Value Grade of A.
• Titan International, Inc. stock has a Value Grade of B.

Now that you have a bit more background about each of the 4 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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