Yahoo Finance Cheap Industrials Stocks To Watch Out For In June
The industrials sector tends to be highly cyclical, impacting companies operating in an array of areas such as building products, aerospace and defence. HGL and Legend are industrial companies that are currently trading below what they’re actually worth. Investors can benefit from buying these industrial companies while they are discounted, because they gain when the market prices move towards the stocks’ true values. Below is a list of stocks I’ve compiled that are deemed undervalued based on the latest financial data.
HGL Limited (ASX:HNG)
HGL Limited distributes branded products for specialist markets in Australia and internationally. Started in 1904, and currently headed by CEO Henrik Thorup, the company employs 260 people and with the market cap of AUD A$28.09M, it falls under the small-cap group.
HNG’s shares are now trading at -42% lower than its actual level of $0.83, at a price of AU$0.48, according to my discounted cash flow model. This mismatch signals an opportunity to buy HNG shares at a discount. Furthermore, HNG’s PE ratio is trading at around 8.78x against its its Trade Distributors peer level of, 18.23x suggesting that relative to its peers, HNG can be bought at a cheaper price right now. HNG also has a healthy balance sheet, as short-term assets amply cover upcoming and long-term liabilities. HNG has zero debt on its books as well, meaning it has no long term debt obligations to worry about. More detail on HGL here.
Legend Corporation Limited (ASX:LGD)
Legend Corporation Limited provides engineering solutions in Australia and New Zealand. Legend was established in 1962 and with the company’s market cap sitting at AUD A$53.10M, it falls under the small-cap category.
LGD’s stock is now trading at -58% under its actual value of $0.58, at a price tag of AU$0.24, according to my discounted cash flow model. The mismatch signals a potential chance to invest in LGD at a discounted price. Also, LGD’s PE ratio is trading at 9.7x against its its Trade Distributors peer level of, 18.23x suggesting that relative to other stocks in the industry, you can buy LGD’s shares at a cheaper price. LGD also has a healthy balance sheet, as short-term assets amply cover upcoming and long-term liabilities. Finally, its debt relative to equity is 24.33%, which has been diminishing over the past couple of years demonstrating its ability to pay down its debt. Interested in Legend? Find out more here.
Global Construction Services Limited (ASX:GCS)
Global Construction Services Limited provides on-site products and services in Australia. Global Construction Services was formed in 2003 and with the market cap of AUD A$155.10M, it falls under the small-cap stocks category.
GCS’s shares are now trading at -67% less than its intrinsic level of $2.25, at the market price of AU$0.73, based on my discounted cash flow model. The mismatch signals a potential chance to invest in GCS at a discounted price. What’s even more appeal is that GCS’s PE ratio is trading at 14.29x against its its Construction peer level of, 16.58x suggesting that relative to its comparable set of companies, GCS’s stock can be bought at a cheaper price. GCS is also robust in terms of financial health, as current assets can cover liabilities in the near term and over the long run. The stock’s debt-to-equity ratio of 1.56% has been declining over the past couple of years indicating its ability to reduce its debt obligations year on year. Dig deeper into Global Construction Services 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.
