Consumer staple stocks, such as Globe International and Shriro Holdings, are trading at a value below what they may actually be worth. There’s a few ways you can value a company. 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. Analysing the most recent financial data, I’ve created a list of companies that compare favourably in all criteria, making them potentially good investments.
Globe International Limited (ASX:GLB)
Globe International Limited produces and distributes purpose-built apparel, footwear, and skateboard hardgoods for the board sports, street fashion, and workwear markets. Globe International was established in 1984 and has a market cap of AUD A$55.98M, putting it in the small-cap category.
GLB’s shares are now hovering at around -69% under its real value of $4.34, at a price of AU$1.35, based on its expected future cash flows. This mismatch indicates a chance to invest in GLB at a discounted price. In terms of relative valuation, GLB’s PE ratio is trading at around 9.34x relative to its Luxury peer level of, 20.65x suggesting that relative to its competitors, we can buy GLB’s stock at a cheaper price today. GLB also has a healthy balance sheet, as short-term assets amply cover upcoming and long-term liabilities. GLB also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility. Continue research on Globe International here.
Shriro Holdings Limited (ASX:SHM)
Shriro Holdings Limited manufactures and distributes kitchen appliances and consumer products in Australia and New Zealand. Formed in 2015, and run by CEO Tim Hargreaves, the company currently employs 262 people and with the company’s market capitalisation at AUD A$132.17M, we can put it in the small-cap category.
SHM’s stock is currently hovering at around -38% beneath its actual worth of $2.24, at the market price of AU$1.39, based on its expected future cash flows. This discrepancy signals a potential opportunity to buy SHM shares at a low price. In addition to this, SHM’s PE ratio is around 9.11x while its Consumer Durables peer level trades at, 15.57x implying that relative to its comparable set of companies, SHM can be bought at a cheaper price right now. SHM is also a financially robust company, as current assets can cover liabilities in the near term and over the long run.
Dig deeper into Shriro Holdings here.
Huon Aquaculture Group Limited (ASX:HUO)
Huon Aquaculture Group Limited, together with its subsidiaries, hatches, farms, processes, markets, and sells Atlantic salmon and ocean trout in Australia. Founded in 1986, and currently run by Peter Bender, the company size now stands at 500 people and with the market cap of AUD A$406.12M, it falls under the small-cap group.