Companies that trade at market prices below their actual values, such as Patriot Transportation Holding and Palatin Technologies, are perceived to be 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.
Patriot Transportation Holding, Inc. (NASDAQ:PATI)
Patriot Transportation Holding, Inc., through its subsidiary Florida Rock & Tank Lines, Inc., engages in the transportation business. The company currently employs 857 people and has a market cap of USD $64.75M, putting it in the small-cap stocks category.
PATI’s shares are now floating at around -31% lower than its true value of $28.33, at the market price of US$19.60, according to my discounted cash flow model. This difference in price and value gives us a chance to buy low. Furthermore, PATI’s PE ratio is trading at 14.35x while its Transportation peer level trades at, 14.48x suggesting that relative to its peers, you can buy PATI for a cheaper price. PATI is also strong financially, with near-term assets able to cover upcoming and long-term liabilities. PATI also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility. Dig deeper into Patriot Transportation Holding here.
Palatin Technologies, Inc. (AMEX:PTN)
Palatin Technologies, Inc., a biopharmaceutical company, develops targeted, receptor-specific peptide therapeutics for the treatment of various diseases in the United States. Established in 1986, and run by CEO Carl Spana, the company now has 22 employees and with the company’s market cap sitting at USD $189.14M, it falls under the small-cap stocks category.
PTN’s shares are now hovering at around -53% below its value of $2.07, at a price of US$0.97, based on its expected future cash flows. This discrepancy gives us a chance to invest in PTN at a discount. Also, PTN’s PE ratio is around 8.1x compared to its Biotechs peer level of, 26.64x implying that relative to its comparable set of companies, you can buy PTN for a cheaper price. PTN is also in great financial shape, as current assets can cover liabilities in the near term and over the long run.
Continue research on Palatin Technologies here.
SandRidge Permian Trust (NYSE:PER)
SandRidge Permian Trust holds royalty interests in specified oil and natural gas properties in the Permian Basin located in Andrews County, Texas. SandRidge Permian Trust was started in 2011 and with the company’s market cap sitting at USD $105.00M, it falls under the small-cap category.
PER’s shares are now trading at -68% beneath its intrinsic level of $6.17, at a price tag of US$2.00, based on my discounted cash flow model. This discrepancy signals a potential opportunity to buy PER shares at a low price. What’s even more appeal is that PER’s PE ratio stands at 4.31x against its its Oil and Gas peer level of, 12.87x meaning that relative to its comparable company group, we can purchase PER’s shares for cheaper. PER is also in great financial shape, with near-term assets able to cover upcoming and long-term liabilities. PER also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility. Continue research on SandRidge Permian Trust 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.