Companies that are recently trading at a market price lower than their real values include Pro-Dex and TICC Capital. Investors can determine how much a company is worth based on how much money they are expected to make in the future, or compared to the value of their peers. The list I’ve put together below are of stocks that compare favourably on all criteria, which potentially makes them good investments if you believe the price should eventually reflect the stock’s actual value.
Pro-Dex, Inc. (NASDAQ:PDEX)
Pro-Dex, Inc., together with its subsidiaries, designs, develops, and manufactures powered surgical instruments for medical device original equipment manufacturers, dental instruments, and rotary air motors worldwide. Started in 1978, and now led by CEO Richard Van Kirk, the company provides employment to 76 people and with the company’s market capitalisation at USD $32.70M, we can put it in the small-cap group.
PDEX’s stock is currently hovering at around -43% less than its actual value of $13.1, at the market price of $7.5, based on its expected future cash flows. This mismatch indicates a potential opportunity to buy low. In addition to this, PDEX’s PE ratio is currently around 5.9x against its its healthcare equipment and supplies peer level of 41.8x, meaning that relative to other stocks in the industry, PDEX’s shares can be purchased for a lower price. PDEX is also strong in terms of its financial health, as short-term assets amply cover upcoming and long-term liabilities. PDEX also has a miniscule amount of debt on its balance sheet, which gives it headroom to grow and financial flexibility.
TICC Capital Corp. (NASDAQ:TICC)
TICC Capital Corp. is a business development company, operates as a closed-end, non-diversified management investment company. TICC Capital was started in 2003 and with the market cap of USD $311.97M, it falls under the small-cap group.
TICC’s shares are currently floating at around -52% below its true level of $12.72, at a price tag of $6.06, based on its expected future cash flows. signalling an opportunity to buy the stock at a low price. Also, TICC’s PE ratio is trading at around 4.9x while its capital markets peer level trades at 17.9x, meaning that relative to its peers, we can purchase TICC’s shares for cheaper. TICC also has a healthy balance sheet, as short-term assets amply cover upcoming and long-term liabilities. It’s debt-to-equity ratio of 41% has been reducing for the past few years demonstrating TICC’s ability to pay down its debt.
Ossen Innovation Co., Ltd. (NASDAQ:OSN)
Ossen Innovation Co., Ltd. manufactures and sells various plain surface prestressed steel materials, and rare earth coated and zinc coated prestressed steel materials in the People’s Republic of China. The company now has 191 employees and with the company’s market cap sitting at USD $15.80M, it falls under the small-cap group.
OSN’s shares are currently trading at -76% under its actual value of $9.97, at a price of $2.39, based on my discounted cash flow model. This discrepancy signals a potential opportunity to buy OSN shares at a low price. In addition to this, OSN’s PE ratio is trading at 3x relative to its metals and mining peer level of 26.1x, indicating that relative to its peers, OSN can be bought at a cheaper price right now. OSN is also in great financial shape, with near-term assets able to cover upcoming and long-term liabilities. Finally, its debt relative to equity is 28%, which has been diminishing for the last couple of years indicating OSN’s capacity to reduce its debt obligations year on year.
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.