Stocks recently deemed undervalued include 180 Degree Capital and China Green Agriculture, as they trade at a market price below their true valuations. There’s a few ways you can measure the value of a 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.
180 Degree Capital Corp. (NASDAQ:TURN)
180 Degree Capital Corp. is a business development company specializing in early stage investments. 180 Degree Capital was founded in 1981 and with the company’s market cap sitting at USD $60.38M, it falls under the small-cap stocks category.
TURN’s shares are now hovering at around -55% under its real value of $4.24, at a price tag of US$1.92, based on my discounted cash flow model. This mismatch indicates a potential opportunity to buy low. Moreover, TURN’s PE ratio is trading at 6.35x relative to its Capital Markets peer level of, 16.43x implying that relative to other stocks in the industry, we can buy TURN’s stock at a cheaper price today. TURN is also in great financial shape, as short-term assets amply cover upcoming and long-term liabilities. TURN also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility. Continue research on 180 Degree Capital here.
China Green Agriculture, Inc. (NYSE:CGA)
China Green Agriculture, Inc., through its subsidiaries, engages in the research, development, production, and sale of various types of fertilizers and agricultural products. The company currently employs 424 people and with the company’s market capitalisation at USD $51.66M, we can put it in the small-cap category.
CGA’s shares are now hovering at around -83% lower than its real value of $7.64, at the market price of US$1.30, based on its expected future cash flows. This discrepancy gives us a chance to invest in CGA at a discount. Moreover, CGA’s PE ratio is currently around 1.99x relative to its Chemicals peer level of, 18.05x meaning that relative to its competitors, you can buy CGA’s shares at a cheaper price. CGA is also strong financially, as current assets can cover liabilities in the near term and over the long run. Finally, its debt relative to equity is 3.49%, which has been reducing for the last couple of years indicating CGA’s capacity to pay down its debt. Interested in China Green Agriculture? Find out more here.
Tower Semiconductor Ltd. (NASDAQ:TSEM)
Tower Semiconductor Ltd., an independent semiconductor foundry, manufactures and markets analog intensive mixed-signal semiconductor devices in the United States, Japan, Asia, and Europe. Tower Semiconductor was started in 1993 and with the market cap of USD $2.93B, it falls under the mid-cap group.
TSEM’s shares are currently floating at around -46% less than its true value of $52.85, at a price of US$28.61, according to my discounted cash flow model. This discrepancy gives us a chance to invest in TSEM at a discount. In addition to this, TSEM’s PE ratio is currently around 9.28x against its its Semiconductor peer level of, 25.75x implying that relative to its peers, you can buy TSEM’s shares at a cheaper price. TSEM is also strong in terms of its financial health, with short-term assets covering liabilities in the near future as well as in the long run. Finally, its debt relative to equity is 32.50%, which has been falling for the last couple of years demonstrating TSEM’s capability to reduce its debt obligations year on year. More on Tower Semiconductor 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.