Best Cheap Stocks To Buy Now
Companies that trade at market prices below their actual values, such as Alaris Royalty and Diversified Royalty, are perceived to be undervalued. Investors can profit from the difference by investing in these stocks as the current market prices should eventually move towards their true values. If capital gains are what you’re after in your next investment, I’ve put together a list of undervalued stocks you may be interested in, based on the latest financial data from each company.
Alaris Royalty Corp. (TSX:AD)
Alaris Royalty Corp. is a private equity firm specializing in management buyouts, growth capital, middle market, later stage, industry consolidation, growth capital, and mature investments. Started in 2008, and now led by CEO Stephen King, the company now has 14 employees and has a market cap of CAD CA$673.33M, putting it in the small-cap stocks category.
AD’s stock is now floating at around -75% below its true value of $75.27, at a price of $18.47, based on its expected future cash flows. This difference in price and value gives us a chance to buy low. What’s even more appeal is that AD’s PE ratio stands at around 30.4x against its its capital markets peer level of 14.2x, implying that relative to its competitors, we can invest in AD at a lower price. AD is also in great financial shape, as current assets can cover liabilities in the near term and over the long run. Finally, its debt relative to equity is 19%, which has over time, indicating AD’s ability
Diversified Royalty Corp. (TSX:DIV)
Diversified Royalty Corp., a multi-royalty corporation, engages in the acquisition of royalties from multi-location businesses and franchisors in North America. Started in 1992, and headed by CEO Sean Morrison, the company size now stands at 39 people and has a market cap of CAD CA$378.06M, putting it in the small-cap stocks category.
DIV’s stock is now trading at -74% lower than its intrinsic value of $13.88, at the market price of $3.56, according to my discounted cash flow model. The discrepancy signals an opportunity to buy low. Furthermore, DIV’s PE ratio stands at around 28.5x compared to its hotels, restaurants and leisure peer level of 19.5x, indicating that relative to its peers, DIV’s stock can be bought at a cheaper price. DIV is also strong in terms of its financial health, 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 29% has for the past few years showing DIV’s ability
Pioneering Technology Corp. (TSXV:PTE)
Pioneering Technology Corp. engages in the development, manufacture, and sale of cooking fire prevention solutions for residential and commercial markets in Canada and the United States. Pioneering Technology is currently led by CEO Kevin Callahan. With the company’s market capitalisation at CAD CA$40.77M, we can put it in the small-cap group
PTE’s stock is now hovering at around -46% lower than its actual level of $1.36, at a price of $0.73, based on its expected future cash flows. The divergence signals an opportunity to buy PTE shares at a low price. Also, PTE’s PE ratio is currently around 11.3x relative to its household durables peer level of 15.7x, implying that relative to its peers, PTE’s stock can be bought at a cheaper price. PTE is also a financially robust company, as short-term assets amply cover upcoming and long-term liabilities. PTE has zero debt on its books as well, meaning it has no long term debt obligations to worry about.
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.
