A stock that you can buy at a price below what it is worth is considered undervalued. This is the case for Shervani Industrial Syndicate and Sam Industries. 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.
Shervani Industrial Syndicate Limited (BSE:526117)
Shervani Industrial Syndicate Limited engages in real estate business in India. Shervani Industrial Syndicate was started in 1948 and has a market cap of INR ₹1.99B, putting it in the small-cap stocks category.
526117’s stock is now floating at around -42% below its actual level of INR1047.98, at a price tag of ₹609.00, according to my discounted cash flow model. The divergence signals an opportunity to buy 526117 shares at a low price. In addition to this, 526117’s PE ratio is currently around 12.58x while its Real Estate peer level trades at, 25.75x meaning that relative to its peers, 526117 can be bought at a cheaper price right now. 526117 is also strong financially, as near-term assets sufficiently cover liabilities in the near future as well as in the long run. 526117 also has a miniscule amount of debt on its balance sheet, which gives it headroom to grow and financial flexibility. More detail on Shervani Industrial Syndicate here.
Sam Industries Limited (BSE:532005)
Sam Industries Limited engages in the welding electrodes, real estate, and investment businesses in India. Sam Industries was formed in 1994 and with the company’s market cap sitting at INR ₹225.10M, it falls under the small-cap group.
532005’s shares are currently floating at around -47% less than its true level of INR38.36, at a price tag of ₹20.30, according to my discounted cash flow model. This discrepancy gives us a chance to invest in 532005 at a discount. In addition to this, 532005’s PE ratio is trading at 14.1x relative to its Machinery peer level of, 30.4x meaning that relative to other stocks in the industry, you can buy 532005’s shares at a cheaper price. 532005 is also in great financial shape, as current assets can cover liabilities in the near term and over the long run. Finally, its debt relative to equity is 4.48%, which has been diminishing for the last couple of years indicating 532005’s capacity to reduce its debt obligations year on year. More detail on Sam Industries here.
Poona Dal and Oil Industries Limited (BSE:519359)
Poona Dal and Oil Industries Limited, an agro based company, manufactures and trades in edible oils and pulses in India. Formed in 1993, and currently lead by Pradip Parakh, the company size now stands at 15 people and with the market cap of INR ₹367.60M, it falls under the small-cap group.