A stock that you can buy at a price below what it is worth is considered undervalued. This is the case for Veltyco Group and Sanderson Group. There’s a few ways you can measure the value of a company – you can forecast how much money it will make in the future and base your valuation off of this, or you can look around at its peers of similar size and industry to roughly estimate what it should be worth. Below, I’ve created a list of companies that compare favourably in all criteria based on their most recent financial data, making them potentially good investments.
Veltyco Group PLC (AIM:VLTY)
Veltyco Group Plc engages in the marketing and promotion of gaming Websites, lottery, and options trading operations in British Virgin Islands and the Isle of Man. Veltyco Group is headed by CEO . With the stock’s market cap sitting at GBP £63.56M, it falls under the small-cap category
VLTY’s shares are currently trading at -60% less than its real value of €2.13, at a price tag of €0.86, according to my discounted cash flow model. signalling an opportunity to buy the stock at a low price. Furthermore, VLTY’s PE ratio stands at 13.5x compared to its hospitality peer level of 23.3x, meaning that relative to its comparable set of companies, VLTY’s shares can be purchased for a lower price. VLTY is also strong in terms of its financial health, as short-term assets amply cover upcoming and long-term liabilities. VLTY also has a miniscule amount of debt on its balance sheet, which gives it headroom to grow and financial flexibility.
Sanderson Group plc (AIM:SND)
Sanderson Group plc provides software solutions and information technology services for the multi-channel retail, manufacturing, wholesale distribution, and logistics businesses primarily in the United Kingdom and Ireland. Started in 1983, and now run by Ian Newcombe, the company currently employs 230 people and with the company’s market cap sitting at GBP £49.84M, it falls under the small-cap stocks category.
SND’s stock is now hovering at around -12% below its value of £1, at a price of £0.88, based on its expected future cash flows. signalling an opportunity to buy the stock at a low price. What’s even more appeal is that SND’s PE ratio stands at 16.8x compared to its it peer level of 26.7x, meaning that relative to its comparable set of companies, SND’s shares can be purchased for a lower price. SND is also strong financially, with short-term assets covering liabilities in the near future as well as in the long run. SND has zero debt on its books as well, meaning it has no long term debt obligations to worry about.