Cheap Stocks To Invest In
Magna International and Viemed Healthcare 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.
Magna International Inc. (TSX:MG)
Magna International Inc. designs, develops, and manufactures automotive systems, assemblies, modules, and components in North America, Europe, Asia, and South America. Founded in 1957, and headed by CEO Donald Walker, the company now has 163,000 employees and with the stock’s market cap sitting at CAD CA$25.70B, it comes under the large-cap group.
MG’s shares are currently trading at -26% beneath its intrinsic value of $95.19, at the market price of $70.91, based on its expected future cash flows. The difference between value and price signals a potential opportunity to buy MG shares at a discount. Additionally, MG’s PE ratio stands at around 10.2x compared to its auto components peer level of 23.6x, suggesting that relative to its comparable set of companies, we can purchase MG’s shares for cheaper. MG also has a healthy balance sheet, as short-term assets amply cover upcoming and long-term liabilities.
Continue research on Magna International here.
Viemed Healthcare, Inc. (TSXV:VMD)
Viemed Healthcare, Inc., through its subsidiaries, provides equipment and home therapy to patients affected by specific respiratory diseases in the United States. Viemed Healthcare is currently run by Casey Hoyt. The company currently has a market cap of CAD CA$92.88M, putting it in the small-cap category
VMD’s shares are now floating at around -29% less than its value of $3.42, at the market price of $2.42, according to my discounted cash flow model. This difference in price and value gives us a chance to buy low. Additionally, VMD’s PE ratio is around 1.1x compared to its healthcare peer level of 19.5x, meaning that relative to its peers, VMD’s shares can be purchased for a lower price. VMD is also strong in terms of its financial health, as current assets can cover liabilities in the near term and over the long run.
Dig deeper into Viemed Healthcare here.
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 currently headed by CEO Sean Morrison, the company size now stands at 39 people and with the company’s market cap sitting at CAD CA$359.18M, it falls under the small-cap group.
DIV’s stock is currently trading at -76% less than its real value of $13.82, at a price of $3.29, based on my discounted cash flow model. The discrepancy signals an opportunity to buy low.
DIV is also in great financial shape, with short-term assets covering liabilities in the near future as well as in the long run.
Dig deeper into Diversified Royalty here.
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.
