Companies that are recently trading at a market price lower than their real values include Lycos Internet and AAR Commercial. 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.
Lycos Internet Limited (BSE:532368)
Lycos Internet Limited provides digital marketing solutions and computer software development services to businesses, agencies, and online publishers worldwide. Founded in 1999, and headed by CEO Muthukuru Reddy, the company now has 1,000 employees and has a market cap of INR ₹2.85B, putting it in the mid-cap category.
532368’s stock is now floating at around -52% less than its true value of INR12.57, at a price tag of INR5.98, based on my discounted cash flow model. This mismatch indicates a potential opportunity to buy low. Furthermore, 532368’s PE ratio is trading at 0.7x while its internet peer level trades at 25.7x, meaning that relative to its peers, you can purchase 532368’s stock for a lower price right now. 532368 is also in good financial health, with current assets covering liabilities in the near term and over the long run. It’s debt-to-equity ratio of 3% has been falling for the past few years indicating 532368’s capacity to pay down its debt. More on Lycos Internet here.
AAR Commercial Company Limited (BSE:539632)
AAR Commercial Company Limited trades in cotton/fabrics in India. The company was established in 1982 and with the company’s market capitalisation at INR ₹50.07M, we can put it in the small-cap stocks category.
539632’s shares are now hovering at around -96% less than its actual value of INR114, at a price tag of INR5, based on its expected future cash flows. The discrepancy signals an opportunity to buy low. In terms of relative valuation, 539632’s PE ratio stands at around 17.9x relative to its retail distributors peer level of 78.5x, meaning that relative to other stocks in the industry, we can invest in 539632 at a lower price. 539632 is also in good financial health, as short-term assets amply cover upcoming and long-term liabilities.
Interested in AAR Commercial? Find out more here.
HEC Infra Projects Limited (NSEI:HECPROJECT)
HEC Infra Projects Limited provides engineering, procurement, and construction services for electro-mechanical and instrumentation projects. Established in 2005, and run by CEO Gaurang Shah, the company currently employs 51 people and with the stock’s market cap sitting at INR ₹385.25M, it comes under the small-cap group.