Top Undervalued Stocks This Week
Stocks, such as Tandem Group and Bonmarché Holdings, are trading at a value below what they may actually be 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.
Tandem Group plc (AIM:TND)
Tandem Group plc designs, develops, distributes, and retails sports, leisure, and mobility equipment in the United Kingdom and internationally. Established in 1958, and headed by CEO Stephen Grant, the company size now stands at 91 people and with the company’s market cap sitting at GBP £7.16M, it falls under the small-cap category.
TND’s stock is now floating at around -86% less than its actual level of £10.3, at the market price of UK£1.45, based on my discounted cash flow model. The divergence signals an opportunity to buy TND shares at a low price. Also, TND’s PE ratio stands at 4.14x relative to its Leisure peer level of, 25.45x meaning that relative to other stocks in the industry, TND can be bought at a cheaper price right now. TND also has a healthy balance sheet, with near-term assets able to cover upcoming and long-term liabilities. It’s debt-to-equity ratio of 44.02% has been declining over time, signifying TND’s capability to pay down its debt. Interested in Tandem Group? Find out more here.
Bonmarché Holdings plc (LSE:BON)
Bonmarché Holdings plc, together with its subsidiaries, operates as a multi-channel retailer of womenswear and accessories in the United Kingdom. Formed in 1982, and now led by CEO Helen Connolly, the company currently employs 1,934 people and with the company’s market cap sitting at GBP £49.82M, it falls under the small-cap stocks category.
BON’s shares are currently trading at -56% lower than its intrinsic value of £2.31, at a price of UK£1.01, based on my discounted cash flow model. The discrepancy signals an opportunity to buy low. Also, BON’s PE ratio is trading at 7.85x compared to its Specialty Retail peer level of, 13.37x suggesting that relative to its comparable company group, we can purchase BON’s shares for cheaper. BON 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 4.07% has been dropping for the past few years showing its capability to pay down its debt. Continue research on Bonmarché Holdings here.
NAHL Group plc (AIM:NAH)
NAHL Group plc provides marketing services focusing on the legal services market in the United Kingdom. Founded in 1993, and currently lead by J. Atkinson, the company now has 220 employees and with the stock’s market cap sitting at GBP £56.92M, it comes under the small-cap group.
NAH’s shares are now floating at around -52% lower than its actual worth of £2.65, at the market price of UK£1.28, based on its expected future cash flows. The mismatch signals a potential chance to invest in NAH at a discounted price. What’s even more appeal is that NAH’s PE ratio is around 5.88x relative to its Media peer level of, 20.29x implying that relative to its comparable set of companies, NAH’s shares can be purchased for a lower price. NAH is also strong in terms of its financial health, with current assets covering liabilities in the near term and over the long run. The stock’s debt-to-equity ratio of 20.91% has been dropping over time, demonstrating NAH’s capability to reduce its debt obligations year on year. More on NAHL Group 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.
