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Undervalued companies, such as Tandem Group and Bonmarché Holdings, are those that trade at a price below their actual values. 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, Europe, and internationally. Founded in 1958, and currently headed by CEO Stephen Grant, the company size now stands at 101 people and with the company’s market cap sitting at GBP £7.54M, it falls under the small-cap category.
TND’s stock is now hovering at around -86% beneath its actual worth of £11.01, at a price tag of UK£1.50, based on my discounted cash flow model. This mismatch signals an opportunity to buy TND shares at a discount. In addition to this, TND’s PE ratio is around 4.28x compared to its Leisure peer level of, 22.38x indicating that relative to its peers, TND’s shares can be purchased for a lower price. TND is also in good 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 44.02% has been diminishing for the last couple of years demonstrating TND’s ability to reduce its debt obligations year on year. More on Tandem Group 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 headed by CEO Helen Connolly, the company now has 1,934 employees and with the company’s market capitalisation at GBP £45.93M, we can put it in the small-cap stocks category.
BON’s stock is now floating at around -59% under its actual level of £2.31, at a price tag of UK£0.94, based on my discounted cash flow model. This mismatch indicates a chance to invest in BON at a discounted price. Also, BON’s PE ratio stands at around 7.34x relative to its Specialty Retail peer level of, 13.75x suggesting that relative to its competitors, we can buy BON’s stock at a cheaper price today. BON is also in great financial shape, with short-term assets covering liabilities in the near future as well as in the long run. It’s debt-to-equity ratio of 4.07% has been reducing for the past few years demonstrating its capability to reduce its debt obligations year on year. Continue research on Bonmarché Holdings here.