Undervalued companies are those that trade at a price lower than their actual values, such as Pioneer Investcorp and Betex India. 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.
Pioneer Investcorp Limited (BSE:507864)
Pioneer Investcorp Limited provides investment banking and financial advisory services worldwide. Formed in 1984, and now led by CEO Sushant Kumar, the company employs 41 people and with the company’s market capitalisation at INR ₹466.05M, we can put it in the small-cap group.
507864’s stock is now hovering at around -68% below its real value of INR116.68, at the market price of ₹37.90, based on its expected future cash flows. This mismatch signals an opportunity to buy 507864 shares at a discount. Furthermore, 507864’s PE ratio stands at around 2.62x compared to its Capital Markets peer level of, 24.25x implying that relative to its comparable set of companies, 507864’s shares can be purchased for a lower price. 507864 is also strong financially, with short-term assets covering liabilities in the near future as well as in the long run. The stock’s debt-to-equity ratio of 39.97% has been declining for the past few years signalling its capacity to pay down its debt. Interested in Pioneer Investcorp? Find out more here.
Betex India Limited (BSE:512477)
Betex India Limited engages in textile processing business in India. Founded in 1987, and now run by Rajkumar Somani, the company currently employs 460 people and has a market cap of INR ₹76.58M, putting it in the small-cap stocks category.
512477’s stock is currently trading at -64% less than its intrinsic level of INR141.95, at a price of ₹51.05, based on its expected future cash flows. This mismatch indicates a potential opportunity to buy low. What’s even more appeal is that 512477’s PE ratio stands at around 7.05x compared to its Luxury peer level of, 17.81x suggesting that relative to its comparable company group, you can purchase 512477’s stock for a lower price right now. 512477 is also robust in terms of financial health, as short-term assets amply cover upcoming and long-term liabilities. Continue research on Betex India here.
Pasupati Acrylon Limited (BSE:500456)
Pasupati Acrylon Limited manufactures and sells acrylic fibers in India. Started in 1982, and run by CEO Vineet Jain, the company provides employment to 487 people and has a market cap of INR ₹2.26B, putting it in the mid-cap group.
500456’s shares are now hovering at around -48% under its value of INR48.66, at a price of ₹25.40, based on my discounted cash flow model. This discrepancy gives us a chance to invest in 500456 at a discount. Moreover, 500456’s PE ratio is around 7.7x compared to its Luxury peer level of, 17.81x implying that relative to its peers, you can buy 500456 for a cheaper price. 500456 is also robust in terms of financial health, with short-term assets covering liabilities in the near future as well as in the long run. It’s debt-to-equity ratio of 9.15% has been diminishing over the past couple of years signalling its ability to reduce its debt obligations year on year. Continue research on Pasupati Acrylon here.
For more financially sound, undervalued companies to add to your portfolio, explore this interactive list of undervalued stocks.