Companies that trade at market prices below their actual values, such as VirTra and Liberty Tax, are perceived to be undervalued. Investors can profit from the difference by investing in these stocks as the current market prices should eventually move towards their true values. If capital gains are what you’re after in your next investment, I’ve put together a list of undervalued stocks you may be interested in, based on the latest financial data from each company.
VirTra, Inc. (NASDAQ:VTSI)
VirTra, Inc. develops, sells, and supports use of force training and marksmanship firearms training systems and accessories worldwide. Established in 1993, and currently lead by Robert Ferris, the company employs 80 people and with the stock’s market cap sitting at USD $38.14M, it comes under the small-cap stocks category.
VTSI’s stock is currently trading at -44% less than its true level of $8.76, at the market price of US$4.90, based on my discounted cash flow model. This mismatch signals an opportunity to buy VTSI shares at a discount. What’s even more appeal is that VTSI’s PE ratio is trading at 11.9x against its its Aerospace & Defense peer level of, 21.63x indicating that relative to its comparable company group, VTSI can be bought at a cheaper price right now. VTSI also has a healthy balance sheet, as near-term assets sufficiently cover liabilities in the near future as well as in the long run. VTSI also has a miniscule amount of debt on its balance sheet, which gives it headroom to grow and financial flexibility. Interested in VirTra? Find out more here.
Liberty Tax, Inc. (NASDAQ:TAX)
Liberty Tax, Inc., together with its subsidiaries, provides tax preparation services and solutions in the United States and Canada. Started in 1996, and currently lead by Nicole Ossenfort, the company size now stands at 1,498 people and has a market cap of USD $136.05M, putting it in the small-cap group.
TAX’s stock is now trading at -63% less than its actual worth of $26.51, at the market price of US$9.85, based on my discounted cash flow model. This discrepancy signals a potential opportunity to buy TAX shares at a low price. In addition to this, TAX’s PE ratio is currently around 10.78x compared to its Consumer Services peer level of, 19.7x suggesting that relative to its comparable set of companies, you can buy TAX for a cheaper price. TAX is also in good financial health, as near-term assets sufficiently cover liabilities in the near future as well as in the long run. It’s debt-to-equity ratio of 41.22% has been declining over the past couple of years demonstrating its capacity to pay down its debt. More on Liberty Tax here.
VSE Corporation (NASDAQ:VSEC)
VSE Corporation operates as a diversified services and supply company in the United States. Formed in 1959, and now run by Maurice Gauthier, the company employs 2,306 people and with the stock’s market cap sitting at USD $520.58M, it comes under the small-cap category.
VSEC’s stock is now hovering at around -51% less than its intrinsic value of $99.63, at the market price of US$49.03, based on my discounted cash flow model. The discrepancy signals an opportunity to buy low. What’s even more appeal is that VSEC’s PE ratio is around 13.59x compared to its Commercial Services peer level of, 17.71x indicating that relative to other stocks in the industry, you can buy VSEC’s shares at a cheaper price. VSEC 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. It’s debt-to-equity ratio of 66.38% has been reducing for the past few years signifying VSEC’s ability to reduce its debt obligations year on year. Continue research on VSE 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.