Top Rated ASX Stocks You Can Buy For Cheap
Monash IVF Group and South32 are companies that are currently trading below what they’re actually worth. 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.
Monash IVF Group Limited (ASX:MVF)
Monash IVF Group Limited provides human fertility, assisted reproductive, and specialist women imaging services in Australia and Malaysia. Started in 2014, and currently lead by David Morris, the company employs 633 people and with the market cap of AUD A$288.36M, it falls under the small-cap group. MVF’s stock is now floating at around -28% below its actual level of $1.71, at a price tag of $1.23, based on my discounted cash flow model. This mismatch indicates a potential opportunity to buy low. Also, MVF’s PE ratio is currently around 9.7x relative to its biotechnology peer level of 26.6x, meaning that relative to other stocks in the industry, you can purchase MVF’s stock for a lower price right now. MVF is also a financially robust company, with short-term assets covering liabilities in the near future as well as in the long run. The stock’s debt-to equity ratio of 59% has been falling over the past couple of years signifying MVF’s capacity to reduce its debt obligations year on year.
South32 Limited (ASX:S32)
South32 Limited operates as a diversified metals and mining company primarily in Australia, Southern Africa, and South America. Founded in 2000, and currently run by Graham Kerr, the company size now stands at 13,442 people and has a market cap of AUD A$17.23B, putting it in the large-cap group. S32’s shares are now trading at -27% less than its real value of $4.58, at a price of $3.32, according to my discounted cash flow model. This difference in price and value gives us a chance to buy low. Moreover, S32’s PE ratio is currently around 10.9x relative to its metals and mining peer level of 13.8x, implying that relative to its comparable set of companies, you can buy S32’s shares at a cheaper price. S32 is also strong in terms of its financial health, with current assets covering liabilities in the near term and over the long run. Finally, its debt relative to equity is 10%, which has been reducing over time, showing S32’s capability to pay down its debt.
Shaver Shop Group Limited (ASX:SSG)
Shaver Shop Group Limited operates as a retailer of specialist personal grooming products for men and women in Australia and New Zealand. Shaver Shop Group was started in 1986 and with the company’s market capitalisation at AUD A$62.21M, we can put it in the small-cap stocks category. SSG’s stock is currently hovering at around -30% under its real value of $0.7, at the market price of $0.49, based on its expected future cash flows. The discrepancy signals an opportunity to buy low. Also, SSG’s PE ratio is around 6.7x against its its specialty retail peer level of 14.6x, indicating that relative to its competitors, you can buy SSG for a cheaper price. SSG is also in great financial shape, with short-term assets covering liabilities in the near future as well as in the long run. It’s debt-to-equity ratio of 20% has been diminishing over time, signalling SSG’s capability to reduce its debt obligations year on year.
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.
