Top Cheap Stocks in February
Companies with shares trading at a market price below what they are actually worth, such as Evergreen Gaming and Alacer Gold, are deemed undervalued. Smart investors can make money from this discrepancy by buying these shares, because they believe the current market prices will eventually move towards their true value. If you’re looking for capital gains in your next investment, I suggest you take a look at my list of potentially undervalued stocks.
Evergreen Gaming Corporation (TSXV:TNA)
Evergreen Gaming Corporation engages in the gaming operations in the United States. Evergreen Gaming is headed by CEO Dawn Mangano. With the stock’s market cap sitting at CAD CA$19.81M, it falls under the small-cap group
TNA’s shares are now trading at -36% beneath its intrinsic value of $0.25, at a price of $0.16, based on its expected future cash flows. The mismatch signals a potential chance to invest in TNA at a discounted price. Also, TNA’s PE ratio stands at around 8.6x while its hospitality peer level trades at 17.4x, meaning that relative to its competitors, TNA’s stock can be bought at a cheaper price. TNA is also a financially healthy company, with current assets covering liabilities in the near term and over the long run. Finally, its debt relative to equity is 49%, which has been dropping over the past couple of years signalling TNA’s capacity to reduce its debt obligations year on year. More detail on Evergreen Gaming here.
Alacer Gold Corp. (TSX:ASR)
Alacer Gold Corp., an intermediate gold mining company, engages in the mining, development, and exploration of mineral deposits in Turkey. The company now has 406 employees and with the market cap of CAD CA$644.80M, it falls under the small-cap group.
ASR’s stock is currently trading at -30% lower than its actual value of $3.14, at a price of $2.2, based on its expected future cash flows. This mismatch signals an opportunity to buy ASR shares at a discount. In terms of relative valuation, ASR’s PE ratio is currently around 10x compared to its metals and mining peer level of 12.2x, meaning that relative to its comparable company group, ASR can be bought at a cheaper price right now. ASR is also a financially healthy company, as short-term assets amply cover upcoming and long-term liabilities.
More detail on Alacer Gold here.
Minco Gold Corporation (TSXV:MMM)
Minco Gold Corporation operates as an investment issuer. Minco Gold was founded in 1982 and with the company’s market cap sitting at CAD CA$8.88M, it falls under the small-cap group.
MMM’s shares are currently trading at -89% lower than its actual value of $1.64, at a price tag of $0.18, based on my discounted cash flow model. This price and value mismatch indicates a potential opportunity to buy the stock at a low price. Moreover, MMM’s PE ratio is around 1.8x while its capital markets peer level trades at 13.8x, implying that relative to its competitors, you can buy MMM for a cheaper price. MMM is also in good financial health, with near-term assets able to cover upcoming and long-term liabilities. MMM has zero debt on its books as well, meaning it has no long term debt obligations to worry about. Continue research on Minco Gold 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.
