Value-Adding Discounted Stocks To Buy Now
Companies that are recently trading at a market price lower than their real values include NXP Semiconductors and SkyWest. There’s a few ways you can measure the value of a company – you can forecast how much money it will make in the future and base your valuation off of this, or you can look around at its peers of similar size and industry to roughly estimate what it should be worth. Below, I’ve created a list of companies that compare favourably in all criteria based on their most recent financial data, making them potentially good investments.
NXP Semiconductors N.V. (NASDAQ:NXPI)
NXP Semiconductors N.V., a semiconductor company, provides high performance mixed signal solutions for radio frequency (RF), analog, power management, interface, security, and digital processing products worldwide. Founded in 2006, and currently lead by Richard Clemmer, the company size now stands at 30,100 people and with the stock’s market cap sitting at USD $34.95B, it comes under the large-cap group.
NXPI’s shares are currently trading at -20% less than its actual value of $126.58, at the market price of US$101.19, based on my discounted cash flow model. This mismatch indicates a chance to invest in NXPI at a discounted price. Also, NXPI’s PE ratio is trading at 15.47x while its Semiconductor peer level trades at, 23.95x implying that relative to its peers, you can purchase NXPI’s stock for a lower price right now. NXPI 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 47.86% has been declining for the last couple of years signalling NXPI’s capability to pay down its debt. More on NXP Semiconductors here.
SkyWest, Inc. (NASDAQ:SKYW)
SkyWest, Inc., through its subsidiaries, operates a regional airline in the United States. Formed in 1972, and currently lead by Russell Childs, the company provides employment to 16,300 people and has a market cap of USD $2.89B, putting it in the mid-cap stocks category.
SKYW’s shares are now trading at -40% lower than its actual worth of $91.22, at a price of US$54.95, based on its expected future cash flows. The discrepancy signals an opportunity to buy low. Additionally, SKYW’s PE ratio is around 6.64x while its Airlines peer level trades at, 10.95x suggesting that relative to its competitors, SKYW’s stock can be bought at a cheaper price. SKYW is also robust in terms of financial health, with short-term assets covering liabilities in the near future as well as in the long run.
More detail on SkyWest here.
Nova Measuring Instruments Ltd. (NASDAQ:NVMI)
Nova Measuring Instruments Ltd. designs, develops, produces, and sells process control systems used in the manufacture of semiconductors in Israel. Started in 1993, and run by CEO Eitan Oppenhaim, the company now has 616 employees and with the company’s market cap sitting at USD $728.10M, it falls under the small-cap category.
NVMI’s shares are currently hovering at around -36% under its actual level of $41.56, at a price tag of US$26.65, based on my discounted cash flow model. This price and value mismatch indicates a potential opportunity to buy the stock at a low price. Also, NVMI’s PE ratio is currently around 15.89x compared to its Semiconductor peer level of, 23.95x suggesting that relative to its comparable company group, you can purchase NVMI’s stock for a lower price right now. NVMI is also in great financial shape, as short-term assets amply cover upcoming and long-term liabilities. NVMI also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility. More on Nova Measuring Instruments 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.
