Asanko Gold and Mackenzie Master Limited Partnership may be trading at prices below their likely values. This suggests that these stocks are undervalued, meaning we can benefit when the stock price moves to its true valuation. 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.
Asanko Gold Inc. (TSX:AKG)
Asanko Gold Inc. engages in the exploration, development, and production of gold properties. Formed in 1999, and now run by Peter Breese, the company employs 380 people and with the company’s market cap sitting at CAD CA$225.83M, it falls under the small-cap stocks category.
AKG’s shares are currently floating at around -72% under its true value of $3.93, at the market price of $1.11, according to my discounted cash flow model. This difference in price and value gives us a chance to buy low.
AKG is also in good financial health, with near-term assets able to cover upcoming and long-term liabilities.
Dig deeper into Asanko Gold here.
Mackenzie Master Limited Partnership (TSX:MKZ.UN)
Mackenzie Master Limited Partnership pays selling commissions to financial advisors who sell redemption charge securities of Mackenzie mutual funds for specific periods. Mackenzie Master Limited Partnership was formed in 1995 and with the stock’s market cap sitting at CAD CA$6.01M, it comes under the small-cap stocks category.
MKZ.UN’s shares are now trading at -58% beneath its true value of $2.28, at the market price of $0.96, according to my discounted cash flow model. This mismatch indicates a chance to invest in MKZ.UN at a discounted price. In addition to this, MKZ.UN’s PE ratio is trading at 6.5x while its capital markets peer level trades at 13.8x, implying that relative to its comparable set of companies, MKZ.UN can be bought at a cheaper price right now. MKZ.UN is also in good financial health, as short-term assets amply cover upcoming and long-term liabilities. MKZ.UN has zero debt on its books as well, meaning it has no long term debt obligations to worry about. More on Mackenzie Master Limited Partnership here.
Grand Peak Capital Corp. (CNSX:GPK)
Grand Peak Capital Corp. is a private equity and venture capital firm specializing in growth capital, management or leveraged buyouts, turnaround situations, and reviewing investment opportunities in undervalued companies. Grand Peak Capital was started in 1952 and with the company’s market cap sitting at CAD CA$3.75M, it falls under the small-cap group.
GPK’s shares are currently hovering at around -90% lower than its true value of $1.57, at the market price of $0.15, based on its expected future cash flows. The divergence signals an opportunity to buy GPK shares at a low price. Also, GPK’s PE ratio is around 2.1x compared to its capital markets peer level of 13.8x, suggesting that relative to other stocks in the industry, you can buy GPK’s shares at a cheaper price. GPK is also strong in terms of its financial health, as near-term assets sufficiently cover liabilities in the near future as well as in the long run.
More on Grand Peak Capital 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.