Recent undervalued companies based on their current market price include Appliance Recycling Centers of America and Gulf Resources. 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.
Appliance Recycling Centers of America, Inc. (NASDAQ:ARCI)
Appliance Recycling Centers of America, Inc., together with its subsidiaries, sells and recycles household appliances through a chain of company-owned retail stores under the ApplianceSmart name. Started in 1976, and currently run by Tony Isaac, the company currently employs 441 people and with the company’s market cap sitting at USD $6.53M, it falls under the small-cap stocks category.
ARCI’s shares are now hovering at around -41% below its actual level of $1.54, at a price of US$0.91, based on my discounted cash flow model. This discrepancy gives us a chance to invest in ARCI at a discount. In addition to this, ARCI’s PE ratio is around 1.19x while its Specialty Retail peer level trades at, 18.39x suggesting that relative to its comparable set of companies, ARCI can be bought at a cheaper price right now. ARCI is also strong financially, as short-term assets amply cover upcoming and long-term liabilities. It’s debt-to-equity ratio of 15.07% has been reducing for the past few years revealing ARCI’s ability to pay down its debt. Dig deeper into Appliance Recycling Centers of America here.
Gulf Resources, Inc. (NASDAQ:GURE)
Gulf Resources, Inc., through its subsidiaries, manufactures and trades in bromine, crude salt, chemical products, and natural gas in China. The company currently employs 715 people and with the stock’s market cap sitting at USD $72.08M, it comes under the small-cap group.
GURE’s shares are now hovering at around -92% under its actual value of $20.01, at a price of US$1.56, according to my discounted cash flow model. This mismatch signals an opportunity to buy GURE shares at a discount. Furthermore, GURE’s PE ratio is trading at 2.33x against its its Chemicals peer level of, 19.58x meaning that relative to its comparable set of companies, GURE can be bought at a cheaper price right now. GURE also has a healthy balance sheet, as current assets can cover liabilities in the near term and over the long run. GURE also has a miniscule amount of debt on its balance sheet, which gives it headroom to grow and financial flexibility. Interested in Gulf Resources? Find out more here.
Yirendai Ltd. (NYSE:YRD)
Yirendai Ltd. operates as an online consumer finance marketplace that connects borrowers and investors primarily in the People’s Republic of China. Established in 2012, and now run by Yihan Fang, the company size now stands at 911 people and with the market cap of USD $2.26B, it falls under the mid-cap stocks category.
YRD’s stock is currently trading at -65% beneath its intrinsic level of ¥109.41, at a price of US$37.79, based on its expected future cash flows. The divergence signals an opportunity to buy YRD shares at a low price. Also, YRD’s PE ratio is trading at 11x relative to its Consumer Finance peer level of, 13.88x suggesting that relative to its competitors, we can buy YRD’s stock at a cheaper price today. YRD is also strong financially, as short-term assets amply cover upcoming and long-term liabilities. YRD also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility. Continue research on Yirendai 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.