Marshall Motor Holdings and Produce Investments are stocks on my list that are potentially undervalued. This means their current share prices are trading well-below what the companies are actually worth. Investors can determine how much a company is worth based on how much money they are expected to make in the future, or compared to the value of their peers. The list I’ve put together below are of stocks that compare favourably on all criteria, which potentially makes them good investments if you believe the price should eventually reflect the stock’s actual value.
Marshall Motor Holdings Plc (AIM:MMH)
Marshall Motor Holdings plc, through its subsidiaries, provides car and commercial vehicle sale, leasing, vehicle, and other related services in the United Kingdom. Started in 1909, and run by CEO Daksh Gupta, the company size now stands at 3,926 people and with the company’s market cap sitting at GBP £127.70M, it falls under the small-cap category.
MMH’s stock is now hovering at around -45% below its intrinsic value of £2.95, at a price tag of £1.63, based on my discounted cash flow model. This mismatch indicates a potential opportunity to buy low. Also, MMH’s PE ratio is trading at 5.4x relative to its specialty retail peer level of 13.1x, suggesting that relative to other stocks in the industry, MMH’s stock can be bought at a cheaper price. MMH is also strong in terms of its financial health, with short-term assets covering liabilities in the near future as well as in the long run.
More on Marshall Motor Holdings here.
Produce Investments plc (AIM:PIL)
Produce Investments plc, together with its subsidiaries, engages in growing, sourcing, packing, and marketing fresh potatoes, and daffodils bulbs and flowers to retail, food service, wholesale, and trading sectors in the United Kingdom and internationally. Established in 2005, and currently run by Angus Armstrong, the company size now stands at 1,200 people and with the company’s market cap sitting at GBP £45.82M, it falls under the small-cap group.
PIL’s shares are now trading at -45% under its intrinsic level of £3.19, at a price of £1.76, based on my discounted cash flow model. signalling an opportunity to buy the stock at a low price. Additionally, PIL’s PE ratio stands at around 7.8x against its its food peer level of 18.8x, suggesting that relative to its comparable company group, we can buy PIL’s stock at a cheaper price today. PIL is also in great financial shape, with near-term assets able to cover upcoming and long-term liabilities.