Top Undervalued AIM Stocks This Month
Universe Group and Croma Security Solutions Group are companies that are currently trading below what they’re actually worth. 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.
Universe Group plc (AIM:UNG)
Universe Group Plc designs, develops, and supports point of sale, payment, and on-line loyalty solutions and systems for the petrol forecourt and convenience store markets in the United Kingdom and Belgium. Established in 1979, and run by CEO Jeremy Lewis, the company size now stands at 223 people and with the stock’s market cap sitting at GBP £15.97M, it comes under the small-cap group.
UNG’s shares are currently hovering at around -65% beneath its real value of £0.2, at the market price of £0.07, according to my discounted cash flow model. This discrepancy gives us a chance to invest in UNG at a discount. What’s even more appeal is that UNG’s PE ratio stands at around 9.8x compared to its it services peer level of 23x, implying that relative to its comparable set of companies, UNG’s stock can be bought at a cheaper price. UNG is also in great financial shape, as short-term assets amply cover upcoming and long-term liabilities. Finally, its debt relative to equity is 4%, which has been declining over time, showing its ability to reduce its debt obligations year on year.
Croma Security Solutions Group PLC (AIM:CSSG)
Croma Security Solutions Group PLC provides various security services in the United Kingdom. Formed in 1996, and currently lead by Roberto Fiorentino, the company currently employs 567 people and with the company’s market cap sitting at GBP £8.79M, it falls under the small-cap category.
CSSG’s shares are now hovering at around -58% under its actual value of £1.25, at the market price of £0.52, according to my discounted cash flow model. The divergence signals an opportunity to buy CSSG shares at a low price. Additionally, CSSG’s PE ratio stands at 24.4x compared to its electronic equipment, instruments and components peer level of 32.2x, indicating that relative to other stocks in the industry, you can buy CSSG for a cheaper price. CSSG is also a financially healthy company, as short-term assets amply cover upcoming and long-term liabilities. The stock’s debt-to equity ratio of 2% has been reducing over the past couple of years signifying its ability to pay down its debt.
Kingfisher plc (LSE:KGF)
Kingfisher plc, together with its subsidiaries, supplies home improvement products and services through a network of retail stores and other channels located primarily in the United Kingdom and continental Europe. Established in 1982, and currently headed by CEO Véronique Laury-Deroubaix, the company currently employs 77,000 people and with the company’s market capitalisation at GBP £6.86B, we can put it in the mid-cap group.
KGF’s shares are currently hovering at around -12% lower than its actual value of £3.59, at the market price of £3.17, according to my discounted cash flow model. This discrepancy signals a potential opportunity to buy KGF shares at a low price. Also, KGF’s PE ratio is around 12.1x against its its specialty retail peer level of 12.5x, indicating that relative to its comparable company group, we can buy KGF’s stock at a cheaper price today. KGF is also strong financially, as current assets can cover liabilities in the near term and over the long run. The stock’s debt-to equity ratio of 3% has been dropping over the past couple of years demonstrating its ability 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.
