Cenkoscurities and WPP are stocks on my list that are potentially undervalued. This means their current share prices are trading well-below what the companies are actually worth. Smart investors can make money from this discrepancy by buying these shares, because they believe the current market prices will eventually move towards their true value. If you’re looking for capital gains in your next investment, I suggest you take a look at my list of potentially undervalued stocks.
Cenkos Securities plc (AIM:CNKS)
Cenkos Securities plc, together with its subsidiaries, provides corporate finance, corporate broking, and research and execution services to small and mid-cap growth companies, larger companies, and investment funds in the United Kingdom. Formed in 2004, and now led by CEO Anthony Hotson, the company employs 119 people and with the company’s market cap sitting at GBP £56.34M, it falls under the small-cap group.
CNKS’s stock is currently floating at around -21% lower than its value of £1.33, at a price tag of £1.05, based on my discounted cash flow model. This mismatch signals an opportunity to buy CNKS shares at a discount. Additionally, CNKS’s PE ratio is trading at around 11x against its its capital markets peer level of 17.4x, suggesting that relative to its comparable set of companies, we can invest in CNKS at a lower price. CNKS is also a financially robust company, as near-term assets sufficiently cover liabilities in the near future as well as in the long run. CNKS has zero debt on its books as well, meaning it has no long term debt obligations to worry about.
WPP plc (LSE:WPP)
WPP plc provides various communications services worldwide. Formed in 1985, and run by CEO Martin Sorrell, the company provides employment to 133,931 people and has a market cap of GBP £17.03B, putting it in the large-cap group.
WPP’s stock is now trading at -35% lower than its actual level of £21.33, at a price of £13.76, based on its expected future cash flows. This mismatch indicates a potential opportunity to buy low. Moreover, WPP’s PE ratio stands at 10x against its its media peer level of 24.5x, suggesting that relative to its comparable set of companies, you can purchase WPP’s stock for a lower price right now. WPP is also in great financial shape, with current assets covering liabilities in the near term and over the long run. Finally, its debt relative to equity is 76%, which has for the last couple of years signifying its capability
Styles&Wood Group plc (AIM:STY)
Styles&Wood Group plc provides property services in the United Kingdom. Formed in 2005, and now led by CEO Anthony Lenehan, the company size now stands at 328 people and with the company’s market capitalisation at GBP £30.07M, we can put it in the small-cap stocks category.