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Undervalued companies, such as AT&T and Chesapeake Granite Wash Trust, are those that trade at a price below their actual values. Investors can determine how much a company is worth based on how much money they are expected to make in the future, or compared to the value of their peers. The list I’ve put together below are of stocks that compare favourably on all criteria, which potentially makes them good investments if you believe the price should eventually reflect the stock’s actual value.
AT&T Inc. (NYSE:T)
AT&T Inc. provides communications and digital entertainment services. Formed in 1983, and currently lead by Randall Stephenson, the company size now stands at 249,240 people and with the market cap of USD $203.50B, it falls under the large-cap category.
T’s shares are now trading at -39% lower than its actual level of $54.11, at a price of US$33.04, based on its expected future cash flows. The difference between value and price signals a potential opportunity to buy T shares at a discount. In addition to this, T’s PE ratio is trading at 6.64x relative to its Telecom peer level of, 15.76x suggesting that relative to its comparable set of companies, we can purchase T’s shares for cheaper. T is also in great financial shape, as near-term assets sufficiently cover liabilities in the near future as well as in the long run.
Dig deeper into AT&T here.
Chesapeake Granite Wash Trust (NYSE:CHKR)
Chesapeake Granite Wash Trust owns royalty interests in the oil and natural gas properties located in the Colony Granite Wash play in Washita County in the Anadarko Basin of Western Oklahoma. Chesapeake Granite Wash Trust was started in 2011 and with the company’s market capitalisation at USD $65.45M, we can put it in the small-cap category.
CHKR’s shares are now floating at around -67% below its actual value of $4.43, at a price tag of US$1.48, according to my discounted cash flow model. The discrepancy signals an opportunity to buy low. Furthermore, CHKR’s PE ratio is trading at 5.18x relative to its Oil and Gas peer level of, 12.93x indicating that relative to its peers, CHKR’s shares can be purchased for a lower price. CHKR is also robust in terms of financial health, as near-term assets sufficiently cover liabilities in the near future as well as in the long run. CHKR also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility. Dig deeper into Chesapeake Granite Wash Trust here.
Rocky Brands, Inc. (NASDAQ:RCKY)
Rocky Brands, Inc. designs, manufactures, and markets footwear and apparel under the Rocky, Georgia Boot, Durango, Lehigh, and Michelin brand names in the United States, Canada, and internationally. Started in 1932, and currently lead by Jason Brooks, the company employs 2,070 people and with the company’s market capitalisation at USD $178.87M, we can put it in the small-cap group.