Cyclical companies are those that offer goods and services that are luxuries, instead of absolute necessities, such as entertainment and gambling. Joyce and Globe International are cyclical stocks on my list that are potentially undervalued, which means their current share prices are trading well-below what the companies are actually worth. Investors can profit from the difference by investing in these cyclical 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.
Joyce Corporation Ltd (ASX:JYC)
Joyce Corporation Ltd retails kitchen and wardrobe products in Australia. Established in 1886, and headed by CEO , the company now has 78 employees and with the company’s market cap sitting at AUD A$40.00M, it falls under the small-cap category.
JYC’s shares are currently trading at -81% lower than its actual level of $7.52, at a price of AU$1.45, based on my discounted cash flow model. This discrepancy gives us a chance to invest in JYC at a discount. What’s even more appeal is that JYC’s PE ratio is currently around 13.54x compared to its Specialty Retail peer level of, 16.34x indicating that relative to its comparable company group, JYC can be bought at a cheaper price right now. JYC is also a financially robust company, as current assets can cover liabilities in the near term and over the long run. More detail on Joyce here.
Globe International Limited (ASX:GLB)
Globe International Limited produces and distributes purpose-built apparel, footwear, and skateboard hardgoods for the board sports, street fashion, and workwear markets. The company was established in 1984 and with the company’s market cap sitting at AUD A$53.90M, it falls under the small-cap category.
GLB’s shares are now trading at -70% below its actual value of $4.34, at the market price of AU$1.30, based on its expected future cash flows. This discrepancy signals a potential opportunity to buy GLB shares at a low price. In addition to this, GLB’s PE ratio is trading at around 8.99x compared to its Luxury peer level of, 19.3x implying that relative to its competitors, you can purchase GLB’s stock for a lower price right now. GLB is also strong financially, as short-term assets amply cover upcoming and long-term liabilities. GLB has zero debt on its books as well, meaning it has no long term debt obligations to worry about. More on Globe International here.
Shaver Shop Group Limited (ASX:SSG)
Shaver Shop Group Limited operates as a retailer of specialist personal grooming products for men and women in Australia and New Zealand. Shaver Shop Group was founded in 1986 and with the market cap of AUD A$56.91M, it falls under the small-cap group.
SSG’s stock is currently hovering at around -56% under its true value of $1.03, at the market price of AU$0.46, according to my discounted cash flow model. This discrepancy gives us a chance to invest in SSG at a discount. Also, SSG’s PE ratio is around 5.94x while its Specialty Retail peer level trades at, 16.34x indicating that relative to its comparable set of companies, you can purchase SSG’s stock for a lower price right now. SSG is also a financially healthy company, with near-term assets able to cover upcoming and long-term liabilities. The stock’s debt-to-equity ratio of 11.68% has been reducing for the last couple of years showing its ability to reduce its debt obligations year on year. More detail on Shaver Shop Group here.
For more financially sound, undervalued companies to add to your portfolio, explore this interactive list of undervalued stocks.