Companies, such as Walgreens Boots Alliance, are deemed to be undervalued because their shares are currently trading below their true values. 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.
Walgreens Boots Alliance, Inc. (NASDAQ:WBA)
Walgreens Boots Alliance, Inc. operates as a pharmacy-led health and wellbeing company. Formed in 1901, and run by CEO Stefano Pessina, the company provides employment to 290,000 people and with the market cap of USD $63.80B, it falls under the large-cap group.
WBA’s stock is now trading at -35% less than its actual worth of $99.81, at a price tag of US$64.50, according to my discounted cash flow model. The discrepancy signals an opportunity to buy low. Furthermore, WBA’s PE ratio is trading at 16.11x against its its Consumer Retailing peer level of, 21.22x meaning that relative to other stocks in the industry, you can buy WBA for a cheaper price. WBA is also strong in terms of its financial health, as current assets can cover liabilities in the near term and over the long run.
Interested in Walgreens Boots Alliance? Find out more here.
Owens & Minor, Inc. (NYSE:OMI)
Owens & Minor, Inc., together with its subsidiaries, operates as a healthcare services company in the United States, the United Kingdom, Ireland, France, Germany, and other European countries. Started in 1882, and headed by CEO Paul Phipps, the company size now stands at 8,600 people and with the stock’s market cap sitting at USD $1.04B, it comes under the small-cap group.
OMI’s stock is now floating at around -22% below its actual level of $21.57, at the market price of US$16.72, based on my discounted cash flow model. This difference in price and value gives us a chance to buy low. In addition to this, OMI’s PE ratio is trading at around 16.44x against its its Healthcare peer level of, 21.34x suggesting that relative to other stocks in the industry, you can buy OMI for a cheaper price. OMI also has a healthy balance sheet, as near-term assets sufficiently cover liabilities in the near future as well as in the long run.
Dig deeper into Owens & Minor here.
Amira Nature Foods Ltd. (NYSE:ANFI)
Amira Nature Foods Ltd. engages in processing, sourcing, and selling packaged Indian specialty rice. Formed in 1915, and run by CEO Karan Chanana, the company currently employs 236 people and with the stock’s market cap sitting at USD $97.60M, it comes under the small-cap category.
ANFI’s shares are currently hovering at around -74% lower than its value of $8.51, at a price tag of US$2.22, according to my discounted cash flow model. This discrepancy signals a potential opportunity to buy ANFI shares at a low price. Furthermore, ANFI’s PE ratio is trading at 2.64x while its Food peer level trades at, 19.28x implying that relative to its competitors, ANFI can be bought at a cheaper price right now. ANFI is also strong financially, with current assets covering liabilities in the near term and over the long run. The stock’s debt-to-equity ratio of 67.69% has been diminishing for the last couple of years demonstrating ANFI’s ability to pay down its debt. More on Amira Nature Foods 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.