Kirkland’s and Village Super Market are two of the companies on my list that I consider are undervalued. 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.
Kirkland’s, Inc. (NASDAQ:KIRK)
Kirkland’s, Inc. operates as a specialty retailer of home décor and gifts in the United States. Started in 1966, and now run by W. Madden, the company employs 7,900 people and with the stock’s market cap sitting at USD $142.67M, it comes under the small-cap group.
KIRK’s stock is now hovering at around -63% under its actual value of $24.23, at a price tag of US$8.95, based on its expected future cash flows. This price and value mismatch indicates a potential opportunity to buy the stock at a low price.
KIRK is also a financially robust company, with near-term assets able to cover upcoming and long-term liabilities. KIRK has zero debt on its books as well, meaning it has no long term debt obligations to worry about. More detail on Kirkland’s here.
Village Super Market, Inc. (NASDAQ:VLGE.A)
Village Super Market, Inc. operates a chain of supermarkets in the United States. Started in 1937, and headed by CEO Robert Sumas, the company now has 4,128 employees and with the market cap of USD $346.38M, it falls under the small-cap category.
VLGE.A’s stock is now floating at around -60% less than its true value of $59.37, at the market price of US$23.89, based on my discounted cash flow model. The mismatch signals a potential chance to invest in VLGE.A at a discounted price. Furthermore, VLGE.A’s PE ratio is trading at 13.86x compared to its Consumer Retailing peer level of, 21.9x suggesting that relative to other stocks in the industry, you can buy VLGE.A for a cheaper price. VLGE.A is also strong financially, with near-term assets able to cover upcoming and long-term liabilities. The stock’s debt-to-equity ratio of 15.09% has been falling for the past few years revealing VLGE.A’s capability to pay down its debt. Continue research on Village Super Market here.
Sandridge Mississippian Trust II (NYSE:SDR)
SandRidge Mississippian Trust II, a statutory trust, holds royalty interests in specified oil and natural gas properties. Sandridge Mississippian Trust II was established in 2011 and has a market cap of USD $45.56M, putting it in the small-cap stocks category.
SDR’s stock is currently trading at -69% beneath its actual worth of $2.93, at the market price of US$0.92, based on its expected future cash flows. The difference between value and price signals a potential opportunity to buy SDR shares at a discount. Additionally, SDR’s PE ratio stands at around 4.46x against its its Oil and Gas peer level of, 12.95x implying that relative to its comparable company group, we can invest in SDR at a lower price. SDR is also a financially robust company, with current assets covering liabilities in the near term and over the long run. SDR has zero debt on its books as well, meaning it has no long term debt obligations to worry about. Interested in Sandridge Mississippian Trust II? Find out more here.
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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.