Companies with shares trading at a market price below what they are actually worth, such as Grand Peak Capital and ThreeD Capital, are deemed undervalued. Investors can profit from the difference by investing in these stocks as the current market prices should eventually move towards their true values. If capital gains are what you’re after in your next investment, I’ve put together a list of undervalued stocks you may be interested in, based on the latest financial data from each company.
Grand Peak Capital Corp. (CNSX:GPK)
Grand Peak Capital Corp. is a private equity and venture capital firm specializing in growth capital, management or leveraged buyouts, turnaround situations, and reviewing investment opportunities in undervalued companies. The company was established in 1952 and has a market cap of CAD CA$10.37M, putting it in the small-cap category.
GPK’s shares are now hovering at around -56% less than its actual worth of $0.95, at the market price of CA$0.41, according to my discounted cash flow model. The divergence signals an opportunity to buy GPK shares at a low price. What’s even more appeal is that GPK’s PE ratio stands at 8.7x relative to its Capital Markets peer level of, 13.23x meaning that relative to its comparable set of companies, we can purchase GPK’s shares for cheaper. GPK is also in great financial shape, with near-term assets able to cover upcoming and long-term liabilities. GPK has zero debt on its books as well, meaning it has no long term debt obligations to worry about. More on Grand Peak Capital here.
ThreeD Capital Inc. (CNSX:IDK)
ThreeD Capital Inc., formerly known as Brownstone Energy Inc., is a venture capital firm specializing in early stage and growth capital opportunistic investments. ThreeD Capital was founded in 1987 and with the stock’s market cap sitting at CAD CA$10.54M, it comes under the small-cap group.
IDK’s shares are currently trading at -93% below its actual worth of $1.74, at the market price of CA$0.12, according to my discounted cash flow model. This mismatch indicates a potential opportunity to buy low. In terms of relative valuation, IDK’s PE ratio is trading at around 1.23x relative to its Capital Markets peer level of, 13.23x meaning that relative to its competitors, we can invest in IDK at a lower price. IDK is also in good financial health, with short-term assets covering liabilities in the near future as well as in the long run. IDK also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility. Interested in ThreeD Capital? Find out more here.
Guardian Capital Group Limited (TSX:GCG.A)
Guardian Capital Group Limited, through its subsidiaries, operates as a diversified financial services company in Canada, the United Kingdom, the United States, and the Caribbean. Founded in 1962, and headed by CEO George Mavroudis, the company size now stands at 375 people and with the company’s market capitalisation at CAD CA$670.88M, we can put it in the small-cap stocks category.
GCG.A’s shares are now trading at -50% less than its true level of $49.34, at the market price of CA$24.60, based on its expected future cash flows. This discrepancy gives us a chance to invest in GCG.A at a discount. Additionally, GCG.A’s PE ratio is around 7.29x against its its Capital Markets peer level of, 13.23x implying that relative to other stocks in the industry, GCG.A’s shares can be purchased for a lower price. GCG.A is also in great financial shape, with short-term assets covering liabilities in the near future as well as in the long run. Finally, its debt relative to equity is 8.71%, which has been diminishing for the past few years signalling GCG.A’s ability to reduce its debt obligations year on year. More on Guardian Capital Group here.
For more financially sound, undervalued companies to add to your portfolio, explore this interactive list of undervalued stocks.