Undervalued companies are those that trade at a price lower than their actual values, such as Park-Ohio Holdings and Nautilus. There’s a few ways you can value a company. The most popular methods include discounting the company’s cash flows it is expected to create in the future, or comparing its price to its peers or the value of its assets. Analysing the most recent financial data, I’ve created a list of companies that compare favourably in all criteria, making them potentially good investments.
Park-Ohio Holdings Corp. (NASDAQ:PKOH)
Park-Ohio Holdings Corp., through its subsidiaries, provides supply chain management outsourcing services, capital equipment, and manufactured components in the United States, Asia, Europe, Canada, Mexico, and internationally. Started in 1961, and currently lead by Edward Crawford, the company now has 6,100 employees and with the company’s market cap sitting at USD $523.38M, it falls under the small-cap category.
PKOH’s stock is now floating at around -12% lower than its actual value of $47.4, at the market price of US$41.65, based on my discounted cash flow model. The divergence signals an opportunity to buy PKOH shares at a low price. In addition to this, PKOH’s PE ratio stands at 17.78x relative to its Machinery peer level of, 24.43x meaning that relative to its peers, we can buy PKOH’s stock at a cheaper price today. PKOH is also in great financial shape, with current assets covering liabilities in the near term and over the long run. The stock’s debt-to-equity ratio of 185.14% has been dropping over time, indicating PKOH’s ability to reduce its debt obligations year on year. Continue research on Park-Ohio Holdings here.
Nautilus, Inc. (NYSE:NLS)
Nautilus, Inc., a consumer fitness products company, designs, develops, sources, and markets cardio and strength fitness products, and related accessories for consumer use in the United States, Canada, and internationally. Established in 1986, and currently lead by Bruce Cazenave, the company now has 491 employees and with the market cap of USD $413.98M, it falls under the small-cap stocks category.
NLS’s stock is now floating at around -56% lower than its actual value of $29.54, at a price of US$13.05, based on my discounted cash flow model. This discrepancy signals a potential opportunity to buy NLS shares at a low price. Moreover, NLS’s PE ratio stands at around 14.49x against its its Leisure peer level of, 23.45x meaning that relative to its peers, you can purchase NLS’s stock for a lower price right now. NLS is also a financially robust company, with current assets covering liabilities in the near term and over the long run.
Interested in Nautilus? Find out more here.
Biostar Pharmaceuticals, Inc. (NASDAQ:BSPM)
Biostar Pharmaceuticals, Inc. develops, manufactures, and markets over-the-counter (OTC) and prescription pharmaceutical products for various diseases and conditions in the People’s Republic of China. Founded in 2007, and headed by CEO Ronghua Wang, the company currently employs 200 people and with the stock’s market cap sitting at USD $9.94M, it comes under the small-cap group.
BSPM’s shares are currently floating at around -78% less than its value of $18.29, at a price of US$3.98, according to my discounted cash flow model. This mismatch indicates a chance to invest in BSPM at a discounted price. What’s even more appeal is that BSPM’s PE ratio stands at around 11.15x against its its Pharmaceuticals peer level of, 22.83x implying that relative to its competitors, you can purchase BSPM’s stock for a lower price right now. BSPM is also in great financial shape, as short-term assets amply cover upcoming and long-term liabilities.
Continue research on Biostar Pharmaceuticals here.
Or create your own list by filtering companies based on fundamentals such as intrinsic discount, health score and future outlook using this free stock screener.
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.