Companies that are recently trading at a market price lower than their real values include Fonar and Natural Alternatives International. Smart investors can make money from this discrepancy by buying these shares, because they believe the current market prices will eventually move towards their true value. If you’re looking for capital gains in your next investment, I suggest you take a look at my list of potentially undervalued stocks.
Fonar Corporation (NASDAQ:FONR)
Fonar Corporation, together with its subsidiaries, engages in the design, manufacture, sale, and servicing of magnetic resonance imaging (MRI) scanners for the detection and diagnosis of human diseases, abnormalities, and other medical conditions and injuries. Established in 1978, and currently lead by Timothy Damadian, the company size now stands at 500 people and with the market cap of USD $170.96M, it falls under the small-cap category.
FONR’s stock is currently trading at -23% less than its actual value of $34.71, at the market price of US$26.85, based on my discounted cash flow model. The mismatch signals a potential chance to invest in FONR at a discounted price. What’s even more appeal is that FONR’s PE ratio is currently around 10.44x against its its Medical Equipment peer level of, 37.78x implying that relative to its competitors, FONR’s stock can be bought at a cheaper price. FONR is also in great financial shape, as near-term assets sufficiently cover liabilities in the near future as well as in the long run. FONR also has a miniscule amount of debt on its balance sheet, which gives it headroom to grow and financial flexibility. Dig deeper into Fonar here.
Natural Alternatives International, Inc. (NASDAQ:NAII)
Natural Alternatives International, Inc. engages in formulating, manufacturing, and marketing nutritional supplements in the United States and internationally. Established in 1980, and now run by Mark LeDoux, the company currently employs 212 people and with the stock’s market cap sitting at USD $79.74M, it comes under the small-cap stocks category.
NAII’s shares are now hovering at around -58% below its intrinsic value of $25.71, at a price of US$10.87, according to my discounted cash flow model. The divergence signals an opportunity to buy NAII shares at a low price. What’s even more appeal is that NAII’s PE ratio is trading at 19.43x relative to its Personal Products peer level of, 21.8x meaning that relative to its comparable company group, NAII’s shares can be purchased for a lower price. NAII is also in great financial shape, with short-term assets covering liabilities in the near future as well as in the long run. NAII also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility. More detail on Natural Alternatives International here.
Magellan Health, Inc. (NASDAQ:MGLN)
Magellan Health, Inc. provides healthcare management services in the United States. Formed in 1969, and currently lead by Barry Smith, the company now has 10,700 employees and with the market cap of USD $2.12B, it falls under the mid-cap category.
MGLN’s shares are now floating at around -51% lower than its actual value of $184.36, at a price of US$89.60, based on its expected future cash flows. This mismatch indicates a chance to invest in MGLN at a discounted price. Moreover, MGLN’s PE ratio is around 20.41x while its Healthcare peer level trades at, 20.95x suggesting that relative to other stocks in the industry, MGLN’s stock can be bought at a cheaper price. MGLN is also robust in terms of financial health, with current assets covering liabilities in the near term and over the long run.
Continue research on Magellan Health 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.