Recent undervalued companies based on their current market price include Steel & Tube Holdings and Hallenstein Glasson Holdings. There’s a few ways you can value a company. 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. Analysing the most recent financial data, I’ve created a list of companies that compare favourably in all criteria, making them potentially good investments.
Steel & Tube Holdings Limited (NZSE:STU)
Steel & Tube Holdings Limited processes, fabricates, and distributes steel, plastics, and related products in New Zealand. Founded in 1953, and now led by CEO Mark Malpass, the company now has 683 employees and with the company’s market cap sitting at NZD NZ$135.05M, it falls under the small-cap stocks category.
STU’s shares are now trading at -16% under its intrinsic level of $1.8, at a price of NZ$1.51, based on my discounted cash flow model. This discrepancy signals a potential opportunity to buy STU shares at a low price. In terms of relative valuation, STU’s PE ratio is trading at around 10.21x compared to its Metals and Mining peer level of, 12.33x suggesting that relative to its competitors, STU can be bought at a cheaper price right now. STU is also in good financial health, with current assets covering liabilities in the near term and over the long run.
Continue research on Steel & Tube Holdings here.
Hallenstein Glasson Holdings Limited (NZSE:HLG)
Hallenstein Glasson Holdings Limited, together with its subsidiaries, retails men’s and women’s clothing in New Zealand and Australia. Hallenstein Glasson Holdings was formed in 1873 and with the stock’s market cap sitting at NZD NZ$277.05M, it comes under the small-cap group.
HLG’s stock is currently trading at -52% beneath its intrinsic value of $9.74, at a price of NZ$4.70, based on my discounted cash flow model. This mismatch indicates a potential opportunity to buy low. In addition to this, HLG’s PE ratio stands at 12.07x against its its Specialty Retail peer level of, 12.29x meaning that relative to its comparable company group, HLG can be bought at a cheaper price right now. HLG 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. HLG also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility. More on Hallenstein Glasson Holdings here.
Kathmandu Holdings Limited (NZSE:KMD)
Kathmandu Holdings Limited, together with its subsidiaries, designs, markets, and retails clothing and equipment for travel and adventure in New Zealand, Australia, and the United Kingdom. Founded in 1987, and run by CEO Xavier Simonet, the company provides employment to 1,273 people and with the stock’s market cap sitting at NZD NZ$563.29M, it comes under the small-cap stocks category.
KMD’s shares are currently trading at -57% below its real value of $5.88, at a price tag of NZ$2.50, according to my discounted cash flow model. The mismatch signals a potential chance to invest in KMD at a discounted price. In addition to this, KMD’s PE ratio stands at 12.52x against its its index peer level of, 15.65x suggesting that relative to its comparable company group, you can purchase KMD’s stock for a lower price right now. KMD is also strong in terms of its financial health, as short-term assets amply cover upcoming and long-term liabilities. Finally, its debt relative to equity is 6.14%, which has been diminishing for the past few years revealing its ability to pay down its debt. More on Kathmandu Holdings 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.