Bel Fuse and NACCO Industries 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 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.
Bel Fuse Inc. (NASDAQ:BELF.B)
Bel Fuse Inc. designs, manufactures, markets, and sells products that are used in the networking, telecommunication, high-speed data transmission, commercial aerospace, military, broadcasting, transportation, and consumer electronic industries worldwide. Started in 1949, and headed by CEO Daniel Bernstein, the company size now stands at 7,694 people and with the company’s market capitalisation at USD $232.39M, we can put it in the small-cap category.
BELF.B’s shares are now hovering at around -43% beneath its actual level of $32.72, at the market price of $18.65, according to my discounted cash flow model. The mismatch signals a potential chance to invest in BELF.B at a discounted price. Additionally, BELF.B’s PE ratio is trading at around 18.3x compared to its electronic peer level of 21.8x, suggesting that relative to its competitors, BELF.B’s shares can be purchased for a lower price. BELF.B is also in good financial health, as short-term assets amply cover upcoming and long-term liabilities. Interested in Bel Fuse? Find out more here.
NACCO Industries, Inc. (NYSE:NC)
NACCO Industries, Inc., through its subsidiaries, primarily operates in the mining industry. Formed in 1913, and now run by John Butler, the company provides employment to 3,600 people and has a market cap of USD $252.62M, putting it in the small-cap group.
NC’s shares are now floating at around -77% lower than its actual value of $161.43, at the market price of $37.85, based on my discounted cash flow model. The discrepancy signals an opportunity to buy low. Furthermore, NC’s PE ratio is around 6.3x compared to its oil and gas peer level of 14.1x, implying that relative to its comparable company group, NC can be bought at a cheaper price right now. NC is also robust in terms of financial health, with near-term assets able to cover upcoming and long-term liabilities. The stock’s debt-to equity ratio of 28% has been diminishing over time, demonstrating NC’s capacity to reduce its debt obligations year on year. Dig deeper into NACCO Industries here.
Rising Sun Bancorp (OTCPK:RSAM)
Rising Sun Bancorp operates as a holding company for NBRS Financial Bank that provides various banking services to individual and business customers. Rising Sun Bancorp was formed in 1873 and with the company’s market cap sitting at USD $38.61K, it falls under the small-cap group.
RSAM’s stock is now trading at -100% below its intrinsic level of $7.99, at a price tag of $0.03, according to my discounted cash flow model. This discrepancy gives us a chance to invest in RSAM at a discount. What’s even more appeal is that RSAM’s PE ratio is currently around 0x compared to its banks peer level of 17x, suggesting that relative to its comparable set of companies, we can buy RSAM’s stock at a cheaper price today. RSAM is also strong financially, as current assets can cover liabilities in the near term and over the long run. More detail on Rising Sun Bancorp here.For more financially sound, undervalued companies to add to your portfolio, you can use our free platform to explore our interactive list of undervalued stocks.