Companies that are recently trading at a market price lower than their real values include Green Plains Partners and Weis Markets. 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.
Green Plains Partners LP (NASDAQ:GPP)
Green Plains Partners LP provides fuel storage and transportation services. Green Plains Partners was formed in 2015 and has a market cap of USD $556.71M, putting it in the small-cap group.
GPP’s shares are now floating at around -46% lower than its true value of $32.7, at a price tag of US$17.50, according to my discounted cash flow model. This mismatch indicates a chance to invest in GPP at a discounted price. What’s even more appeal is that GPP’s PE ratio is trading at around 9.92x relative to its Oil and Gas peer level of, 13.87x suggesting that relative to its peers, we can invest in GPP at a lower price. GPP is also strong financially, as current assets can cover liabilities in the near term and over the long run. More on Green Plains Partners here.
Weis Markets, Inc. (NYSE:WMK)
Weis Markets, Inc. engages in the retail sale of food in Pennsylvania and surrounding states. Founded in 1912, and run by CEO Jonathan Weis, the company employs 23,000 people and has a market cap of USD $1.47B, putting it in the small-cap group.
WMK’s stock is now hovering at around -29% under its intrinsic level of $76.76, at a price tag of US$54.80, based on my discounted cash flow model. This difference in price and value gives us a chance to buy low. Furthermore, WMK’s PE ratio is currently around 14.34x compared to its Consumer Retailing peer level of, 20.98x indicating that relative to its peers, you can buy WMK’s shares at a cheaper price. WMK is also in great financial shape, with near-term assets able to cover upcoming and long-term liabilities.
Dig deeper into Weis Markets here.
KB Home (NYSE:KBH)
KB Home operates as a homebuilding company in the United States. Founded in 1957, and currently lead by Jeffrey Mezger, the company provides employment to 1,915 people and with the stock’s market cap sitting at USD $2.35B, it comes under the mid-cap category.
KBH’s shares are now trading at -64% below its intrinsic value of $73.94, at a price tag of US$26.82, according to my discounted cash flow model. signalling an opportunity to buy the stock at a low price.
KBH is also robust in terms of financial health, as near-term assets sufficiently cover liabilities in the near future as well as in the long run. The stock’s debt-to-equity ratio of 127.36% has been falling over the past couple of years showing KBH’s capacity to reduce its debt obligations year on year. More on KB Home 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.