Yahoo Finance June Top Cheap Stock To Invest In
Stocks, such as Schaffer and Namoi Cotton, are trading at a value below what they may actually be worth. Investors can profit from the difference by investing in these stocks as the current market prices should eventually move towards their true values. If capital gains are what you’re after in your next investment, I’ve put together a list of undervalued stocks you may be interested in, based on the latest financial data from each company.
Schaffer Corporation Limited (ASX:SFC)
Schaffer Corporation Limited, a diversified industrial company, manufactures and sells automotive leather, paving, and concrete products primarily in Australia, Asia, and Europe. Started in 1955, and currently run by John Schaffer, the company now has 1,600 employees and with the company’s market capitalisation at AUD A$181.45M, we can put it in the small-cap category.
SFC’s shares are currently floating at around -71% lower than its intrinsic value of $45.33, at a price of AU$13.11, based on its expected future cash flows. signalling an opportunity to buy the stock at a low price. In addition to this, SFC’s PE ratio stands at 16.63x against its its Auto Components peer level of, 17.49x suggesting that relative to its comparable company group, SFC’s stock can be bought at a cheaper price. SFC is also a financially healthy company, as near-term assets sufficiently cover liabilities in the near future as well as in the long run. Finally, its debt relative to equity is 47.72%, which has been reducing over the past couple of years showing SFC’s ability to pay down its debt. Interested in Schaffer? Find out more here.
Namoi Cotton Limited (ASX:NAM)
Namoi Cotton Limited engages in ginning and marketing of cotton. Namoi Cotton was founded in 1962 and has a market cap of AUD A$71.40M, putting it in the small-cap category.
NAM’s shares are now hovering at around -48% below its true level of $0.96, at a price tag of AU$0.50, based on its expected future cash flows. The mismatch signals a potential chance to invest in NAM at a discounted price. In addition to this, NAM’s PE ratio is currently around 9.41x compared to its Commercial Services peer level of, 15.25x meaning that relative to other stocks in the industry, NAM’s stock can be bought at a cheaper price. NAM is also strong financially, with short-term assets covering liabilities in the near future as well as in the long run. Finally, its debt relative to equity is 37.99%, which has been dropping over time, revealing its capability to pay down its debt. Dig deeper into Namoi Cotton here.
Legend Corporation Limited (ASX:LGD)
Legend Corporation Limited provides engineering solutions in Australia and New Zealand. The company was established in 1962 and with the company’s market cap sitting at AUD A$53.10M, it falls under the small-cap group.
LGD’s shares are now floating at around -58% beneath its real value of $0.58, at the market price of AU$0.24, based on my discounted cash flow model. This difference in price and value gives us a chance to buy low. In addition to this, LGD’s PE ratio stands at 9.7x against its its Trade Distributors peer level of, 18.23x meaning that relative to other stocks in the industry, LGD’s shares can be purchased for a lower price. LGD is also in great financial shape, 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 24.33% has been falling for the last couple of years indicating LGD’s ability to pay down its debt. More detail on Legend 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.
