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Undervalued companies, such as China Greenfresh Group and Orange Sky Golden Harvest Entertainment (Holdings), are those that trade at a price below their actual values. There’s a few ways you can determine how much a company is actually worth. The most popular methods include discounting the company’s cash flows it is expected to create in the future, or comparing its price to its peers or the value of its assets. The discrepancy between the price and value means investors have an opportunity to buy shares at a discount. Below are the stocks I believe are undervalued on all criteria, based on their latest financial data.
China Greenfresh Group Co., Ltd. (SEHK:6183)
China GreenFresh Group Co., Ltd. engages in the cultivation and sale of fresh edible fungi products; and manufacture and sale of processed edible fungi products in the People’s Republic of China, Europe, North America, South America, rest of Asia, and Africa. Started in 1995, and currently run by Songhui Zheng, the company now has 641 employees and with the company’s market cap sitting at HKD HK$1.32B, it falls under the small-cap category.
6183’s shares are now trading at -73% under its true value of ¥4.39, at a price tag of HK$1.19, according to my discounted cash flow model. This mismatch indicates a potential opportunity to buy low. Also, 6183’s PE ratio is trading at around 5.59x against its its Food peer level of, 14.91x indicating that relative to its comparable company group, we can purchase 6183’s shares for cheaper. 6183 is also strong in terms of its financial health, as current assets can cover liabilities in the near term and over the long run. 6183 also has a miniscule amount of debt on its balance sheet, which gives it headroom to grow and financial flexibility. More on China Greenfresh Group here.
Orange Sky Golden Harvest Entertainment (Holdings) Limited (SEHK:1132)
Orange Sky Golden Harvest Entertainment (Holdings) Limited, an investment holding company, operates as an integrated film entertainment company. Founded in 1970, and headed by CEO Yimin Mao, the company provides employment to 394 people and with the company’s market cap sitting at HKD HK$1.43B, it falls under the small-cap stocks category.
1132’s shares are now floating at around -88% lower than its value of $4.37, at a price of HK$0.51, according to my discounted cash flow model. signalling an opportunity to buy the stock at a low price. Additionally, 1132’s PE ratio is currently around 0.63x compared to its Media peer level of, 15.24x implying that relative to other stocks in the industry, you can buy 1132 for a cheaper price. 1132 is also in great financial shape, as near-term assets sufficiently cover liabilities in the near future as well as in the long run.