March Top Undervalued Stock
BlackPearl Resources and Cipher Pharmaceuticals are two of the stocks I have identified as undervalued. This means their current share prices are trading at levels less than what the companies are actually worth. 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.
BlackPearl Resources Inc. (TSX:PXX)
BlackPearl Resources Inc. engages in the acquisition, exploration, development, and production of heavy crude oil, bitumen, and natural gas in Canada. Started in 1984, and run by CEO John Festival, the company employs 42 people and with the stock’s market cap sitting at CAD CA$356.45M, it comes under the small-cap stocks category.
PXX’s stock is now hovering at around -41% lower than its real value of $1.8, at a price of CA$1.06, based on my discounted cash flow model. This discrepancy gives us a chance to invest in PXX at a discount.
PXX is also robust in terms of financial health, as near-term assets sufficiently cover liabilities in the near future as well as in the long run.
Dig deeper into BlackPearl Resources here.
Cipher Pharmaceuticals Inc. (TSX:CPH)
Cipher Pharmaceuticals Inc., together with its subsidiaries, operates as a specialty pharmaceutical dermatology company in South America, Canada, and the United States. Founded in 2004, and run by CEO Robert Tessarolo, the company employs 80 people and has a market cap of CAD CA$111.16M, putting it in the small-cap category.
CPH’s stock is currently floating at around -38% lower than its true value of $6.73, at a price of CA$4.16, according to my discounted cash flow model. This mismatch indicates a potential opportunity to buy low. Additionally, CPH’s PE ratio stands at 7.78x against its its Pharmaceuticals peer level of, 52.39x suggesting that relative to its peers, CPH’s stock can be bought at a cheaper price. CPH is also strong financially, as short-term assets amply cover upcoming and long-term liabilities.
More on Cipher Pharmaceuticals here.
Evergreen Gaming Corporation (TSXV:TNA)
Evergreen Gaming Corporation engages in the gaming operations in the United States. Evergreen Gaming is currently led by CEO Dawn Mangano. With the company’s market capitalisation at CAD CA$22.29M, we can put it in the small-cap group
TNA’s stock is currently hovering at around -41% under its actual worth of $0.31, at the market price of CA$0.18, according to my discounted cash flow model. signalling an opportunity to buy the stock at a low price. Also, TNA’s PE ratio is trading at 9.28x compared to its Hospitality peer level of, 19.55x implying that relative to its competitors, you can purchase TNA’s stock for a lower price right now. TNA is also in great financial shape, as current assets can cover liabilities in the near term and over the long run. Finally, its debt relative to equity is 49.43%, which has been dropping for the last couple of years signifying TNA’s capability to pay down its debt. Interested in Evergreen Gaming? Find out more 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.
