Recent undervalued companies based on their current market price include Sanderson Farms and Jumei International Holding. 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.
Sanderson Farms, Inc. (NASDAQ:SAFM)
Sanderson Farms, Inc., an integrated poultry processing company, produces, processes, markets, and distributes fresh, frozen, and prepared chicken products in the United States. Established in 1947, and run by CEO Joe Sanderson, the company provides employment to 14,669 people and has a market cap of USD $2.57B, putting it in the mid-cap category.
SAFM’s stock is currently trading at -29% lower than its actual worth of $159.54, at the market price of US$112.58, based on its expected future cash flows. This mismatch signals an opportunity to buy SAFM shares at a discount. Also, SAFM’s PE ratio is trading at 8.35x compared to its Food peer level of, 18.22x implying that relative to its competitors, SAFM’s shares can be purchased for a lower price. SAFM is also robust in terms of financial health, with short-term assets covering liabilities in the near future as well as in the long run. SAFM also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility. Continue research on Sanderson Farms here.
Jumei International Holding Limited (NYSE:JMEI)
Jumei International Holding Limited operates as an online retailer of beauty products in the People’s Republic of China. Founded in 2009, and headed by CEO Leo Chen, the company size now stands at 2,913 people and with the company’s market cap sitting at USD $419.29M, it falls under the small-cap stocks category.
JMEI’s stock is now floating at around -68% beneath its true value of ¥8.89, at a price of US$2.80, according to my discounted cash flow model. The mismatch signals a potential chance to invest in JMEI at a discounted price. Moreover, JMEI’s PE ratio stands at around 25.56x against its its Online Retail peer level of, 43x meaning that relative to its comparable company group, we can invest in JMEI at a lower price. JMEI is also a financially healthy company, with near-term assets able to cover upcoming and long-term liabilities. JMEI also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility. Dig deeper into Jumei International Holding here.
Jupai Holdings Limited (NYSE:JP)
Jupai Holdings Limited provides wealth management services in China. The company provides employment to 2520 people and has a market cap of USD $647.70M, putting it in the small-cap group.
JP’s shares are now trading at -40% beneath its actual level of ¥32.61, at the market price of US$19.42, based on its expected future cash flows. This mismatch signals an opportunity to buy JP shares at a discount. Moreover, JP’s PE ratio is trading at 9.69x relative to its Capital Markets peer level of, 16.76x implying that relative to its competitors, we can invest in JP at a lower price. JP also has a healthy balance sheet, as near-term assets sufficiently cover liabilities in the near future as well as in the long run. JP also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility. Interested in Jupai Holdings? Find out more 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.