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Aurelia Metals and Webjet may be trading at prices below their likely values. This suggests that these stocks are undervalued, meaning we can benefit when the stock price moves to its true valuation. 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.
Aurelia Metals Limited (ASX:AMI)
Aurelia Metals Limited, a junior mining company, explores for and develops mineral properties in Australia. Aurelia Metals is run by CEO James Simpson. With the stock’s market cap sitting at AUD A$325.23M, it falls under the small-cap group
AMI’s stock is now trading at -24% under its actual value of $0.5, at a price tag of AU$0.38, based on its expected future cash flows. signalling an opportunity to buy the stock at a low price. What’s even more appeal is that AMI’s PE ratio is currently around 4.91x relative to its Metals and Mining peer level of, 14.2x meaning that relative to its comparable company group, you can buy AMI for a cheaper price. AMI also has a healthy balance sheet, as current assets can cover liabilities in the near term and over the long run.
More detail on Aurelia Metals here.
Webjet Limited (ASX:WEB)
Webjet Limited provides online travel booking services in Australia, New Zealand, and internationally. The company now has 772 employees and with the stock’s market cap sitting at AUD A$1.28B, it comes under the small-cap group.
WEB’s stock is now trading at -22% under its true value of $13.88, at a price tag of AU$10.81, based on its expected future cash flows. The difference between value and price signals a potential opportunity to buy WEB shares at a discount. In addition to this, WEB’s PE ratio is around 32.08x while its Online Retail peer level trades at, 48.93x suggesting that relative to its peers, you can purchase WEB’s stock for a lower price right now. WEB is also a financially healthy company, as near-term assets sufficiently cover liabilities in the near future as well as in the long run.
More detail on Webjet here.
Pacific Energy Limited (ASX:PEA)
Pacific Energy Limited, together with its subsidiaries, develops, builds, operates, and manages electricity generation facilities in Australia. Pacific Energy is currently run by James de Barran Cullen. The company currently has a market cap of AUD A$206.54M, putting it in the small-cap group