A stock that you can buy at a price below what it is worth is considered undervalued. This is the case for Chesapeake Granite Wash Trust and Micron Technology. Investors can benefit from buying these companies while they are discounted, because they gain when the market prices move towards the stocks’ true values. Below is a list of stocks I’ve compiled that are deemed undervalued based on the latest financial data.
Chesapeake Granite Wash Trust (NYSE:CHKR)
Chesapeake Granite Wash Trust owns royalty interests in the oil and natural gas properties located in the Colony Granite Wash play in Washita County in the Anadarko Basin of Western Oklahoma. Chesapeake Granite Wash Trust was formed in 2011 and with the company’s market cap sitting at USD $77.14M, it falls under the small-cap stocks category.
CHKR’s stock is now floating at around -65% lower than its value of $4.69, at a price of US$1.65, according to my discounted cash flow model. This discrepancy signals a potential opportunity to buy CHKR shares at a low price. Also, CHKR’s PE ratio is trading at 5.59x against its its Oil and Gas peer level of, 13.87x suggesting that relative to its comparable set of companies, CHKR can be bought at a cheaper price right now. CHKR is also robust in terms of financial health, with short-term assets covering liabilities in the near future as well as in the long run. CHKR also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility. Dig deeper into Chesapeake Granite Wash Trust here.
Micron Technology, Inc. (NASDAQ:MU)
Micron Technology, Inc. provides semiconductor systems worldwide. Started in 1978, and run by CEO Sanjay Mehrotra, the company employs 34,100 people and with the market cap of USD $72.57B, it falls under the large-cap group.
MU’s stock is currently floating at around -27% under its true level of $85.4, at the market price of US$62.57, according to my discounted cash flow model. signalling an opportunity to buy the stock at a low price. What’s even more appeal is that MU’s PE ratio is currently around 7.05x against its its Semiconductor peer level of, 24.26x suggesting that relative to its comparable company group, MU’s shares can be purchased for a lower price. MU is also in great financial shape, as near-term assets sufficiently cover liabilities in the near future as well as in the long run. The stock’s debt-to-equity ratio of 35.12% has been diminishing for the past few years showing MU’s ability to reduce its debt obligations year on year. Interested in Micron Technology? Find out more here.
BP Prudhoe Bay Royalty Trust (NYSE:BPT)
BP Prudhoe Bay Royalty Trust operates as a grantor trust in the United States. BP Prudhoe Bay Royalty Trust was established in 1989 and has a market cap of USD $621.67M, putting it in the small-cap stocks category.
BPT’s stock is currently trading at -44% lower than its actual worth of $52.12, at a price of US$29.05, according to my discounted cash flow model. This discrepancy gives us a chance to invest in BPT at a discount. In terms of relative valuation, BPT’s PE ratio is trading at around 7.57x while its Oil and Gas peer level trades at, 13.87x implying that relative to its peers, we can purchase BPT’s shares for cheaper. BPT is also robust in terms of financial health, with near-term assets able to cover upcoming and long-term liabilities. BPT has zero debt on its books as well, meaning it has no long term debt obligations to worry about. Dig deeper into BP Prudhoe Bay Royalty Trust 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.