Stocks recently deemed undervalued include Titon Holdings and Starvest, as they trade at a market price below their true valuations. There’s a few ways you can determine how much a company is actually worth. 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. The discrepancy between the price and value means investors have an opportunity to buy shares at a discount. Below are the stocks I believe are undervalued on all criteria, based on their latest financial data.
Titon Holdings plc (LSE:TON)
Titon Holdings plc designs, manufactures, and markets ventilation products, and door and window fittings in the United Kingdom, South Korea, and internationally. Established in 1972, and now run by David Ruffell, the company currently employs 229 people and with the company’s market capitalisation at GBP £17.44M, we can put it in the small-cap stocks category.
TON’s shares are now trading at -29% beneath its actual level of £2.24, at a price tag of £1.6, according to my discounted cash flow model. This discrepancy signals a potential opportunity to buy TON shares at a low price. Also, TON’s PE ratio is trading at around 9.6x compared to its building peer level of 14x, implying that relative to its peers, we can buy TON’s stock at a cheaper price today. TON is also robust in terms of financial health, as short-term assets amply cover upcoming and long-term liabilities. TON has zero debt on its books as well, meaning it has no long term debt obligations to worry about.
Starvest plc (AIM:SVE)
Starvest plc is a venture capital firm specializing in early stage investments, small company new issues and pre-initial public offering opportunities. Starvest was started in 2000 and with the company’s market cap sitting at GBP £1.72M, it falls under the small-cap stocks category.
SVE’s shares are now hovering at around -21% less than its intrinsic value of £0.04, at a price of £0.03, based on my discounted cash flow model. This discrepancy gives us a chance to invest in SVE at a discount. Furthermore, SVE’s PE ratio is trading at 5.1x compared to its capital markets peer level of 17x, implying that relative to its comparable company group, you can buy SVE’s shares at a cheaper price. SVE is also in great financial shape, as short-term assets amply cover upcoming and long-term liabilities. Finally, its debt relative to equity is 3%, which has for the past few years showing SVE’s ability
Gattaca plc (AIM:GATC)
Gattaca plc, a human capital resources company, provides contract and permanent recruitment in the private and public sectors primarily in the United Kingdom. Formed in 1984, and currently run by Brian Wilkinson, the company provides employment to 876 people and with the stock’s market cap sitting at GBP £95.01M, it comes under the small-cap category.
GATC’s shares are currently hovering at around -25% below its value of £3.96, at a price tag of £2.95, based on its expected future cash flows. signalling an opportunity to buy the stock at a low price. In addition to this, GATC’s PE ratio stands at 12.9x against its its professional services peer level of 17.2x, indicating that relative to its comparable set of companies, we can purchase GATC’s shares for cheaper. GATC is also in good financial health, as short-term assets amply cover upcoming and long-term liabilities. Finally, its debt relative to equity is 54%, which has for the past few years demonstrating GATC’s ability
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.