Undervalued companies, such as El Oro and Inmarsat, are those that trade at a price below their actual values. Investors can benefit from buying these 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.
El Oro Ltd (LSE:ELX)
El Oro Ltd is a publicly owned investment manager. The company was established in 1886 and with the stock’s market cap sitting at GBP £42.33M, it comes under the small-cap group.
ELX’s stock is now trading at -38% less than its actual worth of £1.09, at a price tag of £0.67, based on my discounted cash flow model. This mismatch indicates a potential opportunity to buy low. In addition to this, ELX’s PE ratio stands at around 6.2x relative to its capital markets peer level of 17.4x, meaning that relative to other stocks in the industry, we can buy ELX’s stock at a cheaper price today. ELX is also strong in terms of its financial health, with current assets covering liabilities in the near term and over the long run. The stock’s debt-to equity ratio of 14% has been diminishing for the past few years showing its capability to reduce its debt obligations year on year. Continue research on El Oro here.
Inmarsat Plc (LSE:ISAT)
Inmarsat plc provides mobile satellite communications services on land, at sea, and in the air worldwide. Started in 1979, and now led by CEO Rupert Pearce, the company provides employment to 1,900 people and with the company’s market cap sitting at GBP £2.30B, it falls under the mid-cap stocks category.
ISAT’s shares are now trading at -39% under its actual worth of $8.29, at the market price of $5.02, based on its expected future cash flows. The difference between value and price signals a potential opportunity to buy ISAT shares at a discount. Furthermore, ISAT’s PE ratio stands at around 14.5x against its its telecom peer level of 20.8x, suggesting that relative to other stocks in the industry, ISAT’s stock can be bought at a cheaper price. ISAT also has a healthy balance sheet, with short-term assets covering liabilities in the near future as well as in the long run.
Dig deeper into Inmarsat here.
Starvest plc (AIM:SVE)
Starvest plc is a venture capital firm specializing in early stage investments, small company new issues and pre-initial public offering opportunities. Starvest was founded in 2000 and with the company’s market capitalisation at GBP £1.72M, we can put it in the small-cap group.