Cupid and Rainbow Foundations are two of the companies on my list that I consider are undervalued. There’s a few ways you can determine how much a company is actually worth. 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. The discrepancy between the price and value means investors have an opportunity to buy shares at a discount. Below are the stocks I believe are undervalued on all criteria, based on their latest financial data.
Cupid Limited (BSE:530843)
Cupid Limited manufactures and supplies male and female condoms in India. Started in 1993, and run by CEO Omprakash Garg, the company now has 102 employees and with the company’s market cap sitting at INR ₹2.71B, it falls under the mid-cap stocks category.
530843’s shares are currently hovering at around -52% lower than its true level of INR506.72, at the market price of ₹243.55, according to my discounted cash flow model. The mismatch signals a potential chance to invest in 530843 at a discounted price. Furthermore, 530843’s PE ratio stands at 15.84x against its its Personal Products peer level of, 48.61x meaning that relative to its comparable company group, 530843 can be bought at a cheaper price right now. 530843 is also robust in terms of financial health, with near-term assets able to cover upcoming and long-term liabilities. Dig deeper into Cupid here.
Rainbow Foundations Limited (BSE:531694)
Rainbow Foundations Limited engages in the real estate development business in India. Started in 1994, and headed by CEO Gajraj Jain, the company now has 11 employees and with the company’s market cap sitting at INR ₹58.99M, it falls under the small-cap stocks category.
531694’s shares are currently trading at -98% under its intrinsic value of INR451.1, at a price of ₹10.70, based on my discounted cash flow model. The difference between value and price signals a potential opportunity to buy 531694 shares at a discount. Additionally, 531694’s PE ratio stands at 3.92x while its Real Estate peer level trades at, 22.9x suggesting that relative to its peers, 531694’s shares can be purchased for a lower price. 531694 is also a financially healthy company, as near-term assets sufficiently cover liabilities in the near future as well as in the long run. Continue research on Rainbow Foundations here.
Gitanjali Gems Limited (BSE:532715)
Gitanjali Gems Limited engages in the business of manufacturing, trading, importing, and exporting diamond cutting and polishing, diamond studded jewelry, and plain gold jewelry in India, the United States, the United Kingdom, Belgium, Italy, Singapore, Japan, the Middle East, and China. Started in 1966, and headed by CEO Mehul Choksi, the company provides employment to 6,400 people and with the company’s market capitalisation at INR ₹499.37M, we can put it in the small-cap stocks category.
532715’s stock is now trading at -85% lower than its value of INR27.34, at the market price of ₹4.21, according to my discounted cash flow model. signalling an opportunity to buy the stock at a low price. Also, 532715’s PE ratio is around 0.25x against its its Luxury peer level of, 16.96x suggesting that relative to its comparable company group, we can purchase 532715’s shares for cheaper. 532715 is also in good financial health, with short-term assets covering liabilities in the near future as well as in the long run. The stock’s debt-to-equity ratio of 112.22% has been declining over time, revealing its capability to pay down its debt. Interested in Gitanjali Gems? Find out more here.
For more financially sound, undervalued companies to add to your portfolio, explore this interactive list of undervalued stocks.