Best Cheap Stock in November
Stocks, such as SSE and Serabi Gold, are trading at a value below what they may actually be worth. Investors can benefit from buying these companies while they are discounted, because they gain when the market prices move towards the stocks’ true values. Below is a list of stocks I’ve compiled that are deemed undervalued based on the latest financial data.
SSE plc (LSE:SSE)
SSE plc produces, generates, distributes, and supplies electricity and gas, as well as other energy-related services in the United Kingdom and Ireland. Formed in 1989, and currently run by Alistair Phillips-Davies, the company employs 21,157 people and with the stock’s market cap sitting at GBP £14.04B, it comes under the large-cap stocks category.
SSE’s shares are currently trading at -40% under its actual level of £23.09, at a price tag of £13.82, according to my discounted cash flow model. This mismatch indicates a chance to invest in SSE at a discounted price. Furthermore, SSE’s PE ratio is around 8.7x compared to its electric utilities peer level of 21.5x, implying that relative to its peers, SSE’s shares can be purchased for a lower price. SSE is also robust in terms of financial health, as current assets can cover liabilities in the near term and over the long run. It’s debt-to-equity ratio of 135% has been declining over the past couple of years signalling its capability to pay down its debt.
Serabi Gold plc (AIM:SRB)
Serabi Gold plc, a gold exploration and production company, engages in the evaluation and development of gold projects in Brazil. Formed in 1999, and currently headed by CEO Michael Hodgson, the company size now stands at 364 people and with the stock’s market cap sitting at GBP £29.69M, it comes under the small-cap stocks category.
SRB’s shares are now trading at -81% beneath its true level of $0.23, at a price of $0.04, based on my discounted cash flow model. This price and value mismatch indicates a potential opportunity to buy the stock at a low price. In addition to this, SRB’s PE ratio stands at 16.2x against its its metals and mining peer level of 11x, indicating that relative to its comparable set of companies, we can purchase SRB’s shares for cheaper. SRB also has a healthy balance sheet, with current assets covering liabilities in the near term and over the long run. The stock’s debt-to equity ratio of 5% has over the past couple of years indicating its ability
RedstoneConnect Plc (AIM:REDS)
RedstoneConnect Plc, together with its subsidiaries, provides software, technology, and services in the smart buildings and commercial spaces market in the United Kingdom. Founded in 2000, and run by CEO Mark Braund, the company size now stands at 317 people and with the market cap of GBP £25.77M, it falls under the small-cap group.
REDS’s shares are now hovering at around -33% less than its true value of £1.88, at a price tag of £1.25, according to my discounted cash flow model. The divergence signals an opportunity to buy REDS shares at a low price. What’s even more appeal is that REDS’s PE ratio is around 20.6x relative to its it services peer level of 23x, indicating that relative to its competitors, REDS’s stock can be bought at a cheaper price. REDS is also a financially robust company, as short-term assets amply cover upcoming and long-term liabilities. Finally, its debt relative to equity is 28%, which has for the last couple of years showing REDS’s capability
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.
