Companies, such as Regis Healthcare, trading at a market price below their true values are considered to be undervalued. Investors can profit from the difference by investing in these stocks as the current market prices should eventually move towards their true values. If capital gains are what you’re after in your next investment, I’ve put together a list of undervalued stocks you may be interested in, based on the latest financial data from each company.
Regis Healthcare Limited (ASX:REG)
Regis Healthcare Limited provides residential aged care services in Australia. The company currently employs 3834 people and with the company’s market capitalisation at AUD A$1.05B, we can put it in the small-cap category.
REG’s shares are now floating at around -55% lower than its true level of $7.7, at a price tag of $3.49, based on its expected future cash flows. signalling an opportunity to buy the stock at a low price. Additionally, REG’s PE ratio is trading at 17.2x compared to its healthcare peer level of 23.4x, implying that relative to other stocks in the industry, we can purchase REG’s shares for cheaper. REG 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 139% has been reducing over time, signalling its capability to reduce its debt obligations year on year.
Beacon Minerals Limited (ASX:BCN)
Beacon Minerals Limited engages in the exploration and development of mineral properties in Western Australia. The company was established in 2006 and with the company’s market cap sitting at AUD A$32.22M, it falls under the small-cap category.
BCN’s shares are now floating at around -70% beneath its intrinsic value of $0.05, at the market price of $0.02, according to my discounted cash flow model. signalling an opportunity to buy the stock at a low price. Moreover, BCN’s PE ratio is trading at 14.9x against its its metals and mining peer level of 14.9x, suggesting that relative to its peers, you can buy BCN for a cheaper price. BCN is also a financially healthy company, as current assets can cover liabilities in the near term and over the long run. BCN also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility.
Legend Corporation Limited (ASX:LGD)
Legend Corporation Limited provides engineering solutions in Australia and New Zealand. Legend was started in 1962 and has a market cap of AUD A$52.40M, putting it in the small-cap stocks category.
LGD’s shares are now trading at -53% lower than its real value of $0.51, at a price tag of $0.24, based on my discounted cash flow model. This price and value mismatch indicates a potential opportunity to buy the stock at a low price. Additionally, LGD’s PE ratio is trading at around 14.1x while its trade distributors peer level trades at 13.6x, suggesting that relative to other stocks in the industry, you can buy LGD’s shares at a cheaper price. LGD is also robust in terms of financial health, with current assets covering liabilities in the near term and over the long run. Finally, its debt relative to equity is 28%, which has been diminishing over time, signalling LGD’s capacity to reduce its debt obligations year on year.