Companies with shares trading at a market price below what they are actually worth, such as Changyou.com and Internet Gold – Golden Lines, are deemed undervalued. Investors can profit from the difference by investing in these stocks as the current market prices should eventually move towards their true values. If capital gains are what you’re after in your next investment, I’ve put together a list of undervalued stocks you may be interested in, based on the latest financial data from each company.
Changyou.com Limited (NASDAQ:CYOU)
Changyou.com Limited develops and operates online games in the People’s Republic of China. Started in 2003, and now led by CEO Dewen Chen, the company now has 2,838 employees and with the company’s market cap sitting at USD $1.50B, it falls under the small-cap category.
CYOU’s stock is currently floating at around -37% less than its actual value of $45.9, at the market price of $29.01, based on its expected future cash flows. This difference in price and value gives us a chance to buy low. Moreover, CYOU’s PE ratio stands at 14x against its its software peer level of 35.1x, suggesting that relative to its competitors, we can purchase CYOU’s shares for cheaper. CYOU also has a healthy balance sheet, as near-term assets sufficiently cover liabilities in the near future as well as in the long run. CYOU has zero debt on its books as well, meaning it has no long term debt obligations to worry about. Continue research on Changyou.com here.
Internet Gold – Golden Lines Ltd. (NASDAQ:IGLD)
Internet Gold – Golden Lines Ltd. provides various telecommunications services in Israel. Internet Gold – Golden Lines was formed in 1980 and with the stock’s market cap sitting at USD $144.79M, it comes under the small-cap stocks category.
IGLD’s shares are now trading at -89% under its true level of ILS66.5, at the market price of ILS7.64, based on its expected future cash flows. This mismatch signals an opportunity to buy IGLD shares at a discount. In addition to this, IGLD’s PE ratio is around 13.4x against its its telecom peer level of 16.5x, indicating that relative to other stocks in the industry, IGLD can be bought at a cheaper price right now. IGLD is also robust in terms of financial health, with current assets covering liabilities in the near term and over the long run.
Dig deeper into Internet Gold – Golden Lines 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. Founded in 1980, and headed by CEO Mark LeDoux, the company size now stands at 212 people and has a market cap of USD $82.83M, putting it in the small-cap category.
NAII’s shares are currently hovering at around -77% under its true value of $49.04, at the market price of $11.16, based on its expected future cash flows. The difference between value and price signals a potential opportunity to buy NAII shares at a discount. In addition to this, NAII’s PE ratio stands at 11.9x against its its personal products peer level of 22.4x, implying that relative to other stocks in the industry, we can buy NAII’s stock at a cheaper price today. NAII is also in good financial health, 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.
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.