Best Cheap Stock in January
Companies, such as A.Plus Group Holdings, are deemed to be undervalued because their shares are currently trading below their true values. 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.
A.Plus Group Holdings Limited (SEHK:8251)
A.Plus Group Holdings Limited, an investment holding company, provides financial printing services under the A.Plus brand in Hong Kong. Formed in 2002, and currently lead by Wing Kong Fong, the company currently employs 93 people and has a market cap of HKD HK$244.00M, putting it in the small-cap stocks category.
8251’s shares are currently floating at around -61% under its actual value of $1.56, at a price of $0.61, based on its expected future cash flows. This mismatch indicates a potential opportunity to buy low. Moreover, 8251’s PE ratio is around 7.2x against its its commercial services peer level of 19x, implying that relative to its competitors, you can buy 8251’s shares at a cheaper price. 8251 is also strong in terms of its financial health, as current assets can cover liabilities in the near term and over the long run. 8251 also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility. Interested in A.Plus Group Holdings? Find out more here.
Chanhigh Holdings Limited (SEHK:2017)
Chanhigh Holdings Limited, an investment holding company, provides municipal landscape and works construction services in the People’s Republic of China. Founded in 2016, and currently headed by CEO Yonghui Peng, the company employs 289 people and with the company’s market cap sitting at HKD HK$964.86M, it falls under the small-cap category.
2017’s shares are currently floating at around -92% under its actual worth of ¥18.85, at the market price of ¥1.56, based on its expected future cash flows. signalling an opportunity to buy the stock at a low price. Moreover, 2017’s PE ratio is around 5.3x compared to its construction peer level of 9.3x, meaning that relative to its peers, 2017 can be bought at a cheaper price right now. 2017 is also in great financial shape, with near-term assets able to cover upcoming and long-term liabilities.
Interested in Chanhigh Holdings? Find out more here.
Microware Group Limited (SEHK:1985)
Microware Group Limited, an investment holding company, provides information technology (IT) infrastructure solutions and IT managed services in Hong Kong. Founded in 1985, and currently run by Ming Ho Chu, the company employs 268 people and has a market cap of HKD HK$354.00M, putting it in the small-cap category.
1985’s stock is currently hovering at around -72% less than its actual value of $4.24, at the market price of $1.18, according to my discounted cash flow model. The mismatch signals a potential chance to invest in 1985 at a discounted price. Furthermore, 1985’s PE ratio stands at 12.9x relative to its it peer level of 20.7x, indicating that relative to other stocks in the industry, we can buy 1985’s stock at a cheaper price today. 1985 is also strong financially, with short-term assets covering liabilities in the near future as well as in the long run. 1985 has zero debt on its books as well, meaning it has no long term debt obligations to worry about. Dig deeper into Microware Group here.
For more financially sound, undervalued companies to add to your portfolio, you can use our free platform to explore our 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.
