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Undervalued companies, such as Tomson Group and Megalogic Technology Holdings, trade at a price less than their true 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.
Tomson Group Limited (SEHK:258)
Tomson Group Limited, an investment holding company, engages in property development and investment, hospitality and leisure, securities trading, PVC, and media and entertainment investment businesses in Hong Kong, Macau, and Mainland China. The company size now stands at 550 people and has a market cap of HKD HK$6.24B, putting it in the mid-cap stocks category.
258’s stock is currently trading at -92% beneath its actual level of $40.01, at the market price of HK$3.31, based on its expected future cash flows. This difference in price and value gives us a chance to buy low. In terms of relative valuation, 258’s PE ratio is currently around 4.77x relative to its Real Estate peer level of, 6.99x meaning that relative to its comparable set of companies, you can buy 258 for a cheaper price. 258 is also strong in terms of its financial health, as near-term assets sufficiently cover liabilities in the near future as well as in the long run. Finally, its debt relative to equity is 5.90%, which has been reducing over time, signifying its ability to pay down its debt. More detail on Tomson Group here.
Megalogic Technology Holdings Limited (SEHK:8242)
Megalogic Technology Holdings Limited, an investment holding company, operates as a fabless semiconductor company in the People’s Republic of China, Korea, Taiwan, Russia, and internationally. Started in 2000, and run by CEO Tak Wing Sung, the company now has 47 employees and with the company’s market cap sitting at HKD HK$142.57M, it falls under the small-cap category.
8242’s stock is currently trading at -95% beneath its intrinsic value of $2.16, at the market price of HK$0.10, according to my discounted cash flow model. This discrepancy gives us a chance to invest in 8242 at a discount. Moreover, 8242’s PE ratio is trading at 13.28x while its Semiconductor peer level trades at, 19.44x implying that relative to its comparable company group, we can purchase 8242’s shares for cheaper. 8242 is also a financially robust company, with near-term assets able to cover upcoming and long-term liabilities. 8242 has zero debt on its books as well, meaning it has no long term debt obligations to worry about. Interested in Megalogic Technology Holdings? Find out more here.