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Companies with shares trading at a market price below what they are actually worth, such as Rockshield Capital and Natural Health Trends, are deemed undervalued. 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.
Rockshield Capital Corp. (OTCPK:CRUO.F)
Rockshield Capital Corp. is a venture capital firm specializing in early-stage, emerging growth investments. Rockshield Capital was founded in 2007 and has a market cap of USD $13.67M, putting it in the small-cap category.
CRUO.F’s stock is currently trading at -79% under its true value of $1.43, at the market price of $0.3, based on its expected future cash flows. This discrepancy signals a potential opportunity to buy CRUO.F shares at a low price. Furthermore, CRUO.F’s PE ratio stands at 4x compared to its capital markets peer level of 17.7x, implying that relative to its competitors, CRUO.F can be bought at a cheaper price right now. CRUO.F is also in good financial health, with short-term assets covering liabilities in the near future as well as in the long run. CRUO.F also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility. Interested in Rockshield Capital? Find out more here.
Natural Health Trends Corp. (NASDAQ:NHTC)
Natural Health Trends Corp., a direct-selling and e-commerce company, provides personal care, wellness, and lifestyle products under the NHT Global brand in North America, Greater China, South Korea, Singapore, Malaysia, Japan, Europe, Russia, and Kazakhstan. Formed in 1988, and currently run by Chris Sharng, the company provides employment to 143 people and with the company’s market capitalisation at USD $177.27M, we can put it in the small-cap stocks category.
NHTC’s stock is currently trading at -64% beneath its intrinsic value of $44.15, at a price of $15.77, based on its expected future cash flows. The difference between value and price signals a potential opportunity to buy NHTC shares at a discount. In addition to this, NHTC’s PE ratio is trading at around 3.8x while its personal products peer level trades at 22.4x, implying that relative to its comparable company group, we can invest in NHTC at a lower price. NHTC is also strong in terms of its financial health, as short-term assets amply cover upcoming and long-term liabilities. NHTC has zero debt on its books as well, meaning it has no long term debt obligations to worry about. More detail on Natural Health Trends here.