February Undervalued Stock Opportunities

A stock that you can buy at a price below what it is worth is considered undervalued. This is the case for Park Lawn and GDI Integrated Facility Services. 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.

Park Lawn Corporation (TSX:PLC)

Park Lawn Corporation, together with its subsidiaries, provides goods and services associated with the disposition and memorialization of remains in Canada and the United States. Formed in 1892, and now run by Andrew Clark, the company provides employment to 485 people and with the company’s market capitalisation at CAD CA$335.33M, we can put it in the small-cap category.

PLC’s shares are currently floating at around -21% below its actual worth of $27.53, at a price tag of $21.87, based on my discounted cash flow model. This discrepancy gives us a chance to invest in PLC at a discount. Furthermore, PLC’s PE ratio is currently around 41.3x compared to its consumer services peer level of 44.9x, meaning that relative to its comparable company group, PLC’s shares can be purchased for a lower price. PLC is also a financially healthy company, as short-term assets amply cover upcoming and long-term liabilities. Finally, its debt relative to equity is 3%, which has been diminishing over the past couple of years indicating its capability to reduce its debt obligations year on year. Continue research on Park Lawn here.

TSX:PLC PE PEG Gauge Feb 8th 18
TSX:PLC PE PEG Gauge Feb 8th 18

GDI Integrated Facility Services Inc. (TSX:GDI)

GDI Integrated Facility Services Inc. provides integrated facility services in Canada and the United States. The company employs 20000 people and with the market cap of CAD CA$346.13M, it falls under the small-cap stocks category.

GDI’s shares are now hovering at around -50% less than its value of $31.58, at a price of $15.9, based on its expected future cash flows. The divergence signals an opportunity to buy GDI shares at a low price. Additionally, GDI’s PE ratio is trading at around 20.5x while its commercial services peer level trades at 21.1x, meaning that relative to other stocks in the industry, GDI’s stock can be bought at a cheaper price. GDI 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. Dig deeper into GDI Integrated Facility Services here.

TSX:GDI PE PEG Gauge Feb 8th 18
TSX:GDI PE PEG Gauge Feb 8th 18

Air Canada (TSX:AC)

Air Canada provides the U.S. transbonder and international airline services. Founded in 1937, and currently headed by CEO Calin Rovinescu, the company size now stands at 27,700 people and has a market cap of CAD CA$6.38B, putting it in the mid-cap group.

AC’s shares are currently trading at -65% under its real value of $68.81, at the market price of $23.94, based on its expected future cash flows. The mismatch signals a potential chance to invest in AC at a discounted price. What’s even more appeal is that AC’s PE ratio is currently around 3.5x while its airlines peer level trades at 7.9x, suggesting that relative to its competitors, you can buy AC for a cheaper price. AC 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 206% has been diminishing for the last couple of years demonstrating AC’s capability to pay down its debt. Interested in Air Canada? Find out more here.

TSX:AC PE PEG Gauge Feb 8th 18
TSX:AC PE PEG Gauge Feb 8th 18

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.