Stocks recently deemed undervalued include Bagir Group and Finsbury Food Group, as they trade at a market price below their true valuations. 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.
Bagir Group Ltd. (AIM:BAGR)
Bagir Group Ltd., together with its subsidiaries, designs, develops, manufactures, and markets men’s and women’s tailored fashions in Europe, the United States, and internationally. Started in 1961, and currently lead by Eran Itzhak, the company currently employs 1,050 people and with the company’s market capitalisation at GBP £7.38M, we can put it in the small-cap group.
BAGR’s stock is now hovering at around -57% lower than its actual level of $0.06, at a price tag of $0.02, based on its expected future cash flows. This mismatch signals an opportunity to buy BAGR shares at a discount. What’s even more appeal is that BAGR’s PE ratio is around 0.6x against its its textiles, apparel and luxury goods peer level of 29.2x, suggesting that relative to its peers, we can invest in BAGR at a lower price. BAGR is also a financially healthy company, with short-term assets covering liabilities in the near future as well as in the long run. The stock’s debt-to equity ratio of 16% has been diminishing over time, signalling its capacity to pay down its debt.
Finsbury Food Group Plc (AIM:FIF)
Finsbury Food Group Plc, together with its subsidiaries, manufactures and sells a range of cakes, bread, and bakery snack products in the United Kingdom and internationally. The company size now stands at 3162 people and has a market cap of GBP £133.42M, putting it in the small-cap category.
FIF’s shares are now trading at -40% lower than its intrinsic level of £1.73, at a price of £1.05, according to my discounted cash flow model. This mismatch signals an opportunity to buy FIF shares at a discount. In addition to this, FIF’s PE ratio is trading at 14.7x compared to its food products peer level of 24.2x, indicating that relative to its comparable set of companies, you can buy FIF’s shares at a cheaper price. FIF is also strong in terms of its financial health, with near-term assets able to cover upcoming and long-term liabilities. It’s debt-to-equity ratio of 19% has been dropping for the past few years revealing its capability to pay down its debt.