George Weston and Ivanhoe Mines are two of the stocks I have identified as undervalued. This means their current share prices are trading at levels less than what the companies are actually worth. 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.
George Weston Limited (TSX:WN)
George Weston Limited engages in the food processing and distribution business in Canada and internationally. Formed in 1882, and run by CEO Galen Weston, the company employs 198,000 people and with the company’s market capitalisation at CAD CA$13.28B, we can put it in the large-cap group.
WN’s stock is now floating at around -61% below its value of $264.55, at a price of CA$103.75, based on my discounted cash flow model. This discrepancy gives us a chance to invest in WN at a discount.
WN is also a financially robust company, as current assets can cover liabilities in the near term and over the long run.
More on George Weston here.
Ivanhoe Mines Ltd. (TSX:IVN)
Ivanhoe Mines Ltd. engages in the exploration, development, and recovery of minerals and precious metals located primarily in Africa. Started in 1993, and run by CEO Lars-Eric Johansson, the company provides employment to 745 people and with the company’s market capitalisation at CAD CA$2.67B, we can put it in the mid-cap stocks category.
IVN’s stock is currently floating at around -16% below its value of $3.66, at a price of CA$3.09, based on its expected future cash flows. This discrepancy signals a potential opportunity to buy IVN shares at a low price. Furthermore, IVN’s PE ratio is trading at around 10.96x while its Metals and Mining peer level trades at, 12.16x meaning that relative to its comparable company group, IVN’s shares can be purchased for a lower price. IVN is also a financially healthy company, with current assets covering liabilities in the near term and over the long run. It’s debt-to-equity ratio of 2.65% has been declining over time, indicating IVN’s ability to pay down its debt. More on Ivanhoe Mines here.
Cortex Business Solutions Inc. (TSXV:CBX)
Cortex Business Solutions Inc. supplies e-commerce products and services in Canada and the United States. Established in 1999, and currently lead by Joel Leetzow, the company provides employment to 63 people and has a market cap of CAD CA$35.45M, putting it in the small-cap group.
CBX’s stock is currently floating at around -24% below its intrinsic value of $5.11, at the market price of CA$3.88, based on my discounted cash flow model. The difference between value and price signals a potential opportunity to buy CBX shares at a discount.
CBX also has a healthy balance sheet, as current assets can cover liabilities in the near term and over the long run. CBX also has a miniscule amount of debt on its balance sheet, which gives it headroom to grow and financial flexibility. Interested in Cortex Business Solutions? Find out more here.
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.