Undervalued companies, such as Fairdeal Filaments and Rainbow Foundations, are those that trade at a price below their actual values. Investors can determine how much a company is worth based on how much money they are expected to make in the future, or compared to the value of their peers. The list I’ve put together below are of stocks that compare favourably on all criteria, which potentially makes them good investments if you believe the price should eventually reflect the stock’s actual value.
Fairdeal Filaments Ltd. (BSE:514474)
Fairdeal Filaments Ltd. manufactures and sells synthetic textile yarns and grey fabrics in India. Formed in 1990, and currently run by Dhirajlal Shah, the company employs 380 people and with the stock’s market cap sitting at INR ₹259.24M, it comes under the small-cap stocks category.
514474’s stock is currently trading at -63% under its real value of INR116.27, at the market price of INR42.85, based on my discounted cash flow model. signalling an opportunity to buy the stock at a low price. Additionally, 514474’s PE ratio stands at 18.3x against its its luxury peer level of 21.8x, meaning that relative to its comparable set of companies, we can purchase 514474’s shares for cheaper. 514474 is also strong in terms of its 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 211% has been dropping over time, revealing 514474’s capacity to reduce its debt obligations year on year. Dig deeper into Fairdeal Filaments here.
Rainbow Foundations Limited (BSE:531694)
Rainbow Foundations Limited engages in the real estate development business in India. Established in 1994, and headed by CEO Gajraj Jain, the company size now stands at 11 people and with the company’s market cap sitting at INR ₹94.83M, it falls under the small-cap category.
531694’s stock is currently trading at -96% beneath its true value of INR415.56, at a price tag of INR17.2, according to my discounted cash flow model. signalling an opportunity to buy the stock at a low price. In terms of relative valuation, 531694’s PE ratio is trading at 4x while its real estate peer level trades at 26.9x, meaning that relative to its competitors, 531694’s shares can be purchased for a lower price. 531694 is also in great financial shape, as current assets can cover liabilities in the near term and over the long run. Interested in Rainbow Foundations? Find out more here.
Cyber Media (India) Limited (BSE:532640)
Cyber Media (India) Limited engages in the media business in India and internationally. Cyber Media (India) was started in 1982 and with the stock’s market cap sitting at INR ₹219.39M, it comes under the small-cap category.
532640’s shares are now trading at -59% lower than its intrinsic level of INR41.24, at a price of INR17.05, according to my discounted cash flow model. The difference between value and price signals a potential opportunity to buy 532640 shares at a discount. Also, 532640’s PE ratio is trading at around 18x while its media peer level trades at 29.7x, meaning that relative to its comparable set of companies, 532640’s shares can be purchased for a lower price. 532640 is also strong financially, as near-term assets sufficiently cover liabilities in the near future as well as in the long run. More detail on Cyber Media (India) 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.