Companies that trade at market prices below their actual values, such as ObjectOne Information Systems and Authum Investment & Infrastructure, are perceived to be undervalued. There’s a few ways you can value a company. The most popular methods include discounting the company’s cash flows it is expected to create in the future, or comparing its price to its peers or the value of its assets. Analysing the most recent financial data, I’ve created a list of companies that compare favourably in all criteria, making them potentially good investments.
ObjectOne Information Systems Limited (BSE:535657)
ObjectOne Information Systems Limited provides technology consulting and software development services In India and the United States. The company was established in 1996 and with the company’s market cap sitting at INR ₹31.12M, it falls under the small-cap category.
535657’s shares are currently trading at -62% under its intrinsic level of INR7.85, at the market price of ₹2.96, based on its expected future cash flows. This mismatch signals an opportunity to buy 535657 shares at a discount. Moreover, 535657’s PE ratio is trading at around 10.82x relative to its IT peer level of, 18.92x suggesting that relative to other stocks in the industry, 535657 can be bought at a cheaper price right now. 535657 is also a financially healthy company, with near-term assets able to cover upcoming and long-term liabilities.
Dig deeper into ObjectOne Information Systems here.
Authum Investment & Infrastructure Limited (BSE:539177)
Authum Investment & Infrastructure Limited operates as a non-banking finance company primarily in India. Authum Investment & Infrastructure was founded in 1982 and has a market cap of INR ₹649.03M, putting it in the small-cap category.
539177’s stock is now trading at -62% under its true level of INR147.24, at a price tag of ₹56.30, based on my discounted cash flow model. This mismatch indicates a potential opportunity to buy low. Furthermore, 539177’s PE ratio is trading at around 3.73x while its Capital Markets peer level trades at, 24.22x indicating that relative to its comparable set of companies, 539177 can be bought at a cheaper price right now. 539177 is also in great financial shape, as current assets can cover liabilities in the near term and over the long run. The stock’s debt-to-equity ratio of 1.83% has been diminishing for the last couple of years signalling its capability to pay down its debt. More detail on Authum Investment & Infrastructure here.