Undervalued companies, such as ThreeD Capital and High Arctic Energy Services, trade at a price less than their true values. 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.
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 has a market cap of CAD CA$27.54M, putting it in the small-cap group.
IDK’s stock is currently floating at around -76% lower than its actual worth of $1.33, at a price tag of $0.33, according to my discounted cash flow model. The mismatch signals a potential chance to invest in IDK at a discounted price. Furthermore, IDK’s PE ratio is around 5x relative to its capital markets peer level of 13.8x, meaning that relative to other stocks in the industry, we can purchase IDK’s shares for cheaper. IDK is also a financially healthy company, as near-term assets sufficiently cover 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. Continue research on ThreeD Capital here.
High Arctic Energy Services Inc (TSX:HWO)
High Arctic Energy Services Inc. operates as an oilfield services company in Western Canada and Papua New Guinea. Established in 1993, and headed by CEO J. Bailey, the company now has 809 employees and has a market cap of CAD CA$221.77M, putting it in the small-cap category.
HWO’s stock is now hovering at around -22% under its actual worth of $5.35, at a price tag of $4.16, based on my discounted cash flow model. This discrepancy signals a potential opportunity to buy HWO shares at a low price. What’s even more appeal is that HWO’s PE ratio is trading at around 9.1x against its its energy services peer level of 21.6x, implying that relative to its comparable set of companies, HWO can be bought at a cheaper price right now. HWO is also a financially healthy company, with short-term assets covering liabilities in the near future as well as in the long run. Finally, its debt relative to equity is 5%, which has been dropping over the past couple of years demonstrating its ability to pay down its debt. Interested in High Arctic Energy Services? Find out more here.
CRH Medical Corporation (TSX:CRH)
CRH Medical Corporation provides products and services to physicians for the treatment of gastrointestinal diseases in the United States. Founded in 2000, and currently headed by CEO Edward Wright, the company provides employment to 17 people and with the stock’s market cap sitting at CAD CA$269.04M, it comes under the small-cap category.
CRH’s stock is currently trading at -66% under its actual level of $10.64, at a price tag of $3.65, based on my discounted cash flow model. This discrepancy signals a potential opportunity to buy CRH shares at a low price. Also, CRH’s PE ratio is currently around 31.9x against its its medical equipment peer level of 33.4x, suggesting that relative to its competitors, we can buy CRH’s stock at a cheaper price today. CRH also has a healthy balance sheet, with current assets covering liabilities in the near term and over the long run. Interested in CRH Medical? Find out more 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.