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Companies in the industrials sector operate in areas ranging from aerospace and defence to building products and construction. Most industrial names tend to suffer from relatively high cyclicality. Epwin Group and Norcros are industrial stocks on my list that are potentially undervalued, which means their current share prices are trading well-below what the companies are actually worth. Investors can benefit from buying these industrial companies while they are discounted, because they gain when the market prices move towards the stocks’ true values. Below is a list of stocks I’ve compiled that are deemed undervalued based on the latest financial data.
Epwin Group PLC (AIM:EPWN)
Epwin Group Plc manufactures and sells building products in the United Kingdom, rest of Europe, and internationally. Established in 1976, and run by CEO Jonathan Bednall, the company provides employment to 2,542 people and with the company’s market cap sitting at GBP £122.70M, it falls under the small-cap group.
EPWN’s stock is currently hovering at around -52% beneath its true value of £1.77, at a price tag of UK£0.85, based on its expected future cash flows. This mismatch signals an opportunity to buy EPWN shares at a discount. Also, EPWN’s PE ratio stands at around 11.99x relative to its Building peer level of, 12.02x meaning that relative to its peers, EPWN’s shares can be purchased for a lower price. EPWN is also strong financially, with short-term assets covering liabilities in the near future as well as in the long run. The stock’s debt-to-equity ratio of 34.58% has been falling over time, signifying EPWN’s ability to reduce its debt obligations year on year. Dig deeper into Epwin Group here.
Norcros plc (LSE:NXR)
Norcros plc, together with its subsidiaries, develops, manufactures, markets, and exports home consumer products in the United Kingdom, South Africa, and internationally. Founded in 1999, and headed by CEO Nicholas Kelsall, the company now has 2,000 employees and with the market cap of GBP £152.34M, it falls under the small-cap stocks category.
NXR’s stock is now trading at -65% beneath its value of £5.32, at a price of UK£1.87, based on my discounted cash flow model. This price and value mismatch indicates a potential opportunity to buy the stock at a low price. Furthermore, NXR’s PE ratio stands at 14.52x against its its index peer level of, 17.07x implying that relative to its comparable set of companies, NXR’s shares can be purchased for a lower price. NXR is also robust in terms of financial health, as current assets can cover liabilities in the near term and over the long run.