Flavor Of The Month: inTEST And More
inTEST and Cerecor are two of the companies on my list that I consider are undervalued. There’s a few ways you can determine how much a company is actually worth. 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. The discrepancy between the price and value means investors have an opportunity to buy shares at a discount. Below are the stocks I believe are undervalued on all criteria, based on their latest financial data.
inTEST Corporation (AMEX:INTT)
inTEST Corporation designs, manufactures, and markets thermal, mechanical, and electrical products for use in the testing of integrated circuits (ICs) worldwide. Established in 1981, and currently headed by CEO James Pelrin, the company employs 113 people and has a market cap of USD $73.12M, putting it in the small-cap category.
INTT’s shares are now hovering at around -53% under its real value of $14.51, at a price tag of US$6.75, based on my discounted cash flow model. The mismatch signals a potential chance to invest in INTT at a discounted price.
INTT is also strong financially, with current assets covering liabilities in the near term and over the long run. INTT has zero debt on its books as well, meaning it has no long term debt obligations to worry about. Interested in inTEST? Find out more here.
Cerecor Inc. (NASDAQ:CERC)
Cerecor Inc., a clinical-stage biopharmaceutical company, develops drugs to treat patients with neurological and psychiatric disorders. Formed in 2011, and now run by , the company now has 15 employees and with the market cap of USD $134.64M, it falls under the small-cap stocks category.
CERC’s stock is now trading at -52% less than its true level of $8.75, at a price of US$4.24, based on its expected future cash flows. This mismatch indicates a potential opportunity to buy low. Also, CERC’s PE ratio stands at around 4.31x relative to its Pharmaceuticals peer level of, 22.86x indicating that relative to its competitors, CERC can be bought at a cheaper price right now. CERC is also a financially healthy company, as current assets can cover liabilities in the near term and over the long run. CERC has zero debt on its books as well, meaning it has no long term debt obligations to worry about. More on Cerecor here.
Lydall, Inc. (NYSE:LDL)
Lydall, Inc. designs, manufactures, and markets specialty engineered filtration media, industrial thermal insulating solutions, and automotive thermal and acoustical barriers for filtration/separation and thermal/acoustical applications worldwide. Started in 1879, and now run by Dale Barnhart, the company size now stands at 2,600 people and with the company’s market capitalisation at USD $813.89M, we can put it in the small-cap category.
LDL’s shares are now trading at -28% lower than its true value of $64.95, at a price tag of US$46.75, based on its expected future cash flows. This mismatch indicates a chance to invest in LDL at a discounted price. Moreover, LDL’s PE ratio is currently around 16.16x relative to its Machinery peer level of, 23.93x meaning that relative to its peers, you can purchase LDL’s stock for a lower price right now. LDL is also robust in terms of financial health, as current assets can cover liabilities in the near term and over the long run.
Continue research on Lydall 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.
