Highly Undervalued Financial Stocks To Profit From
The fortunes of financial services companies often follow that of the broader economy, since these businesses provide services such as consumer financing and investment banking, which tend to do well when times are good. Recent undervalued financial companies based on their current market price include Global International Credit Group and Oi Wah Pawnshop Credit Holdings. There’s a few ways you can measure the value of a financial company – you can forecast how much money it will make in the future and base your valuation off of this, or you can look around at its peers of similar size and industry to roughly estimate what it should be worth. Below, I’ve created a list of companies that compare favourably in all criteria based on their most recent financial data, making them potentially good investments.
Global International Credit Group Limited (SEHK:1669)
Global International Credit Group Limited, an investment holding company, engages in money lending business in Hong Kong. Founded in 2014, and currently headed by CEO Yao Wang, the company employs 26 people and with the market cap of HKD HK$360.00M, it falls under the small-cap group.
1669’s shares are currently trading at -56% below its intrinsic value of $2.03, at the market price of HK$0.90, based on its expected future cash flows. The difference between value and price signals a potential opportunity to buy 1669 shares at a discount. Moreover, 1669’s PE ratio is trading at 5.63x compared to its Mortgage peer level of, 18.68x meaning that relative to other stocks in the industry, 1669’s stock can be bought at a cheaper price. 1669 is also a financially healthy company, as current assets can cover liabilities in the near term and over the long run.
More on Global International Credit Group here.
Oi Wah Pawnshop Credit Holdings Limited (SEHK:1319)
Oi Wah Pawnshop Credit Holdings Limited, an investment holding company, engages in the provision of secured financing services to high net worth customers in Hong Kong. Started in 1975, and currently lead by Kai Ho Chan, the company provides employment to 48 people and has a market cap of HKD HK$771.50M, putting it in the small-cap stocks category.
1319’s stock is currently floating at around -46% below its actual worth of $0.68, at a price tag of HK$0.37, according to my discounted cash flow model. This discrepancy signals a potential opportunity to buy 1319 shares at a low price. Moreover, 1319’s PE ratio is trading at around 7.61x relative to its Consumer Finance peer level of, 8.28x implying that relative to its comparable set of companies, you can buy 1319 for a cheaper price. 1319 is also a financially robust company, with near-term assets able to cover upcoming and long-term liabilities.
More detail on Oi Wah Pawnshop Credit Holdings here.
CCT Fortis Holdings Limited (SEHK:138)
CCT Fortis Holdings Limited, an investment holding company, primarily engages in trading securities. The company currently employs 604 people and with the market cap of HKD HK$840.37M, it falls under the small-cap category.
138’s stock is now hovering at around -47% below its intrinsic value of $1.81, at a price of HK$0.96, based on its expected future cash flows. This mismatch indicates a potential opportunity to buy low. In addition to this, 138’s PE ratio stands at around 3.11x compared to its Capital Markets peer level of, 14.82x meaning that relative to its comparable company group, 138’s shares can be purchased for a lower price. 138 is also robust in terms of financial health, with current assets covering liabilities in the near term and over the long run. The stock’s debt-to-equity ratio of 47.55% has been falling for the last couple of years revealing its capacity to reduce its debt obligations year on year. Interested in CCT Fortis Holdings? Find out more here.
For more financially sound, undervalued companies to add to your portfolio, explore this interactive list of undervalued stocks. Or create your own list by filtering SEHK companies based on fundamentals such as intrinsic discount, health score and future outlook using this free stock screener.
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.
