In This Article:
Serabi Gold and Dixons Carphone are two of the stocks I have identified as undervalued. This means their current share prices are trading at levels less than what the companies are actually worth. 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 project 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.
Serabi Gold plc (AIM:SRB)
Serabi Gold plc, a gold exploration and production company, engages in the evaluation and development of gold projects in Brazil. Established in 1999, and currently headed by CEO Michael Hodgson, the company provides employment to 364 people and has a market cap of GBP £22.78M, putting it in the small-cap category.
SRB’s stock is currently trading at -85% below its actual value of $0.22, at the market price of $0.03, based on its expected future cash flows. This discrepancy gives us a chance to invest in SRB at a discount. Additionally, SRB’s PE ratio is around 14.3x relative to its index peer level of 17.6x, implying that relative to its comparable set of companies, you can buy SRB for a cheaper price. SRB is also in good financial health, as current assets can cover liabilities in the near term and over the long run.
Dig deeper into Serabi Gold here.
Dixons Carphone plc (LSE:DC.)
Dixons Carphone plc operates as an electrical and telecommunications retailer and service company. Founded in 1937, and currently headed by CEO Sebastian James, the company provides employment to 42,000 people and has a market cap of GBP £2.22B, putting it in the mid-cap group.
DC.’s shares are currently trading at -35% lower than its real value of £2.95, at a price of £1.92, based on its expected future cash flows. signalling an opportunity to buy the stock at a low price. Additionally, DC.’s PE ratio is around 9.5x while its specialty retail peer level trades at 12.7x, implying that relative to its comparable set of companies, you can buy DC.’s shares at a cheaper price. DC. is also strong in terms of its financial health, as short-term assets amply cover upcoming and long-term liabilities.
More detail on Dixons Carphone here.
Hikma Pharmaceuticals PLC (LSE:HIK)
Hikma Pharmaceuticals PLC develops, manufactures, and markets a range of generic, branded, and in-licensed pharmaceutical products in solid, semi-solid, liquid, and injectable final dosage forms worldwide. Established in 1978, and currently headed by CEO Said Darwazah, the company currently employs 8,500 people and has a market cap of GBP £2.15B, putting it in the mid-cap group.