Plus500 and Debenhams are companies that are currently trading below what they’re 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.
Plus500 Ltd. (AIM:PLUS)
Plus500 Ltd. develops and operates an online trading platform for retail customers to trade contracts for difference (CFDs). Formed in 2008, and headed by CEO Asaf Elimelech, the company employs 46 people and with the stock’s market cap sitting at GBP £996.70M, it comes under the small-cap stocks category.
PLUS’s stock is now hovering at around -49% under its actual worth of $17.06, at a price tag of $8.75, based on its expected future cash flows. This difference in price and value gives us a chance to buy low. Additionally, PLUS’s PE ratio stands at 8.2x against its its diversified financial peer level of 8.8x, meaning that relative to other stocks in the industry, you can purchase PLUS’s stock for a lower price right now. PLUS is also a financially robust company, with short-term assets covering liabilities in the near future as well as in the long run. PLUS has zero debt on its books as well, meaning it has no long term debt obligations to worry about.
Debenhams plc (LSE:DEB)
Debenhams plc, through its subsidiaries, operates and franchises a range of department stores in the United Kingdom, the Republic of Ireland, Denmark, and internationally. Founded in 1778, and currently run by Sergio Bucher, the company provides employment to 27,000 people and has a market cap of GBP £423.02M, putting it in the small-cap stocks category.
DEB’s shares are now floating at around -19% under its value of £0.43, at the market price of £0.35, based on its expected future cash flows. The mismatch signals a potential chance to invest in DEB at a discounted price. What’s even more appeal is that DEB’s PE ratio is trading at around 8.8x against its its multiline retail peer level of 19.5x, implying that relative to its peers, we can purchase DEB’s shares for cheaper. DEB is also strong financially, with short-term assets covering liabilities in the near future as well as in the long run. It’s debt-to-equity ratio of 34% has been declining over time, demonstrating DEB’s capability to pay down its debt.
Secure Trust Bank Plc (LSE:STB)
Secure Trust Bank PLC provides retail banking products and services in the United Kingdom. Formed in 1954, and now led by CEO Paul Lynam, the company currently employs 726 people and with the company’s market cap sitting at GBP £331.17M, it falls under the small-cap stocks category.