A stock that you can buy at a price below what it is worth is considered undervalued. This is the case for 49 North Resources and Cervus Equipment. Smart investors can make money from this discrepancy by buying these shares, because they believe the current market prices will eventually move towards their true value. If you’re looking for capital gains in your next investment, I suggest you take a look at my list of potentially undervalued stocks.

49 North Resources Inc. (TSXV:FNR)

49 North Resources Inc. is a venture capital firm specializing in seed capital and early stage investments. 49 North Resources was established in 2005 and with the company’s market cap sitting at CAD CA$3.84M, it falls under the small-cap stocks category.

FNR’s stock is currently hovering at around -98% beneath its intrinsic level of $3.4, at a price of $0.07, based on its expected future cash flows. This mismatch signals an opportunity to buy FNR shares at a discount. What’s even more appeal is that FNR’s PE ratio is currently around 0.5x relative to its capital markets peer level of 14.2x, implying that relative to its comparable company group, FNR’s stock can be bought at a cheaper price. FNR is also in good financial health, with current assets covering liabilities in the near term and over the long run. The stock’s debt-to equity ratio of 32% has been falling for the past few years signalling FNR’s capacity to reduce its debt obligations year on year.

Cervus Equipment Corporation (TSX:CERV)

Cervus Equipment Corporation primarily engages in the sale, after-sale service, and maintenance of agricultural, transportation, construction, and industrial equipment. Started in 2003, and currently lead by Graham Drake, the company provides employment to 1,794 people and with the company’s market cap sitting at CAD CA$236.08M, it falls under the small-cap group.

CERV’s shares are currently floating at around -23% less than its value of $19.54, at a price tag of $15.14, based on my discounted cash flow model. The mismatch signals a potential chance to invest in CERV at a discounted price. What’s even more appeal is that CERV’s PE ratio is around 9.6x compared to its trading companies and distributors peer level of 15.4x, suggesting that relative to its competitors, you can buy CERV’s shares at a cheaper price. CERV is also a financially healthy company, with current assets covering liabilities in the near term and over the long run. Finally, its debt relative to equity is 87%, which has over time, indicating its ability