Companies with shares trading at a market price below what they are actually worth, such as TICC Capital and Groupe Athena, 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.
TICC Capital Corp. (NASDAQ:TICC)
TICC Capital Corp. is a business development company, operates as a closed-end, non-diversified management investment company. TICC Capital was started in 2003 and has a market cap of USD $288.80M, putting it in the small-cap category.
TICC’s shares are now trading at -56% less than its actual level of $12.75, at a price of $5.61, according to my discounted cash flow model. This mismatch indicates a potential opportunity to buy low. What’s even more appeal is that TICC’s PE ratio is trading at around 4.5x while its capital markets peer level trades at 17.7x, implying that relative to its competitors, TICC’s stock can be bought at a cheaper price. TICC is also strong financially, as current assets can cover liabilities in the near term and over the long run. It’s debt-to-equity ratio of 41% has been diminishing for the past few years demonstrating its capacity to pay down its debt. More on TICC Capital here.
Groupe Athena Inc. (OTCPK:GATA)
Groupe Athena Inc., a research and testing organization, provides technical and regulatory consulting for biotechnical products, pharmaceuticals, diagnostics, medical equipment, and devices. Founded in 2008, and now led by CEO Dipika Purohit, the company provides employment to 16 people and with the company’s market capitalisation at USD $2.92M, we can put it in the small-cap stocks category.
GATA’s stock is currently trading at -71% under its intrinsic value of $0.22, at a price of $0.06, based on its expected future cash flows. The divergence signals an opportunity to buy GATA shares at a low price. Also, GATA’s PE ratio is around 0.6x compared to its healthcare peer level of 22.8x, implying that relative to its comparable company group, you can buy GATA for a cheaper price. GATA 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. GATA also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility. Interested in Groupe Athena? Find out more here.