Undervalued companies, such as BIOQUAL and Pacific Valley Bank, are those that trade at a price below their actual values. There’s a few ways you can value a company. 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. Analysing the most recent financial data, I’ve created a list of companies that compare favourably in all criteria, making them potentially good investments.
BIOQUAL, Inc. (OTCPK:BIOQ)
Bioqual, Inc. provides research, development, consulting, and testing/assay services to commercial clients and government laboratories in the United States. BIOQUAL was started in 1981 and with the market cap of USD $34.28M, it falls under the small-cap category.
BIOQ’s stock is currently floating at around -45% beneath its actual value of $68.67, at the market price of $38, based on my discounted cash flow model. This discrepancy gives us a chance to invest in BIOQ at a discount. Additionally, BIOQ’s PE ratio is trading at 9.1x against its its life sciences peer level of 43.4x, meaning that relative to its comparable set of companies, we can invest in BIOQ at a lower price. BIOQ is also in good financial health, as short-term assets amply cover upcoming and long-term liabilities.
More detail on BIOQUAL here.
Pacific Valley Bank (OTCPK:PVBK)
Pacific Valley Bank provides personal and business banking products and services in the United States. Formed in 2004, and now run by Anker Fanoe, the company size now stands at 37 people and with the company’s market cap sitting at USD $33.27M, it falls under the small-cap group.
PVBK’s shares are now trading at -56% less than its actual value of $21.14, at the market price of $9.25, based on my discounted cash flow model. The discrepancy signals an opportunity to buy low. Furthermore, PVBK’s PE ratio is currently around 6x while its banks peer level trades at 17x, suggesting that relative to its competitors, we can purchase PVBK’s shares for cheaper. PVBK is also a financially robust company, with current assets covering liabilities in the near term and over the long run. PVBK has zero debt on its books as well, meaning it has no long term debt obligations to worry about. Dig deeper into Pacific Valley Bank here.
VSE Corporation (NASDAQ:VSEC)
VSE Corporation operates as a diversified services and supply company in the United States. Formed in 1959, and now led by CEO Maurice Gauthier, the company employs 2,523 people and with the market cap of USD $557.64M, it falls under the small-cap group.
VSEC’s shares are now trading at -54% lower than its intrinsic value of $110.3, at the market price of $51.26, based on my discounted cash flow model. The divergence signals an opportunity to buy VSEC shares at a low price. What’s even more appeal is that VSEC’s PE ratio is trading at 19.2x relative to its commercial services peer level of 20x, meaning that relative to its comparable company group, we can buy VSEC’s stock at a cheaper price today. VSEC is also a financially healthy company, as current assets can cover liabilities in the near term and over the long run. Finally, its debt relative to equity is 73%, which has been dropping over the past couple of years indicating its capacity to reduce its debt obligations year on year. Interested in VSE? 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.