April Top Cheap Stock To Invest In
Recent undervalued companies based on their current market price include Thor Industries and Alliance Resource Partners. There’s a few ways you can measure the value of a company – you can forecast how much money it will make in the future and base your valuation off of this, or you can look around at its peers of similar size and industry to roughly estimate what it should be worth. Below, I’ve created a list of companies that compare favourably in all criteria based on their most recent financial data, making them potentially good investments.
Thor Industries, Inc. (NYSE:THO)
Thor Industries, Inc., through its subsidiaries, designs, manufactures, and sells recreational vehicles, and related parts and accessories primarily in the United States and Canada. Founded in 1980, and currently run by Robert Martin, the company provides employment to 17,800 people and with the market cap of USD $5.49B, it falls under the mid-cap category.
THO’s shares are currently hovering at around -57% below its true value of $241.85, at a price tag of US$104.19, based on its expected future cash flows. This mismatch signals an opportunity to buy THO shares at a discount. In terms of relative valuation, THO’s PE ratio is trading at around 12.49x while its index peer level trades at, 18.35x meaning that relative to its comparable set of companies, THO’s shares can be purchased for a lower price. THO also has a healthy balance sheet, with current assets covering liabilities in the near term and over the long run.
Interested in Thor Industries? Find out more here.
Alliance Resource Partners, L.P. (NASDAQ:ARLP)
Alliance Resource Partners, L.P. produces and markets coal primarily to utilities and industrial users in the United States. Founded in 1971, and currently headed by CEO Joseph Craft, the company size now stands at 3,321 people and has a market cap of USD $2.17B, putting it in the mid-cap group.
ARLP’s shares are now hovering at around -54% lower than its intrinsic value of $36.3, at a price tag of US$16.55, according to my discounted cash flow model. This discrepancy gives us a chance to invest in ARLP at a discount. In terms of relative valuation, ARLP’s PE ratio is currently around 5.91x relative to its Oil and Gas peer level of, 12.63x implying that relative to its competitors, you can buy ARLP for a cheaper price. ARLP is also strong financially, with short-term assets covering liabilities in the near future as well as in the long run. The stock’s debt-to-equity ratio of 49.85% has been declining for the past few years revealing its ability to pay down its debt. Continue research on Alliance Resource Partners here.
The J. M. Smucker Company (NYSE:SJM)
The J. M. Smucker Company manufactures and markets branded food and beverage products worldwide. Started in 1897, and headed by CEO Mark Smucker, the company currently employs 7,140 people and with the company’s market cap sitting at USD $13.69B, it falls under the large-cap group.
SJM’s stock is now trading at -29% less than its intrinsic level of $169.54, at the market price of US$120.55, based on its expected future cash flows. This difference in price and value gives us a chance to buy low. In terms of relative valuation, SJM’s PE ratio is trading at around 10.87x relative to its Food peer level of, 18.64x suggesting that relative to other stocks in the industry, you can purchase SJM’s stock for a lower price right now. SJM is also a financially robust company, as short-term assets amply cover upcoming and long-term liabilities.
Continue research on J. M. Smucker here.
For more financially sound, undervalued companies to add to your portfolio, explore this interactive list of undervalued stocks.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
