Companies that trade at market prices below their actual values, such as Aivtech International Group and SandRidge Permian Trust, are perceived to be undervalued. 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.
Aivtech International Group Co. (OTCPK:AIVI)
Aivtech International Group Co. engages in designing, manufacturing, and selling electronic furniture products, digital/multimedia speakers, and LCD/LED televisions under the AIV brand name in the People’s Republic of China. Aivtech International Group is run by CEO JinLin Guo. With the company’s market capitalisation at USD $115.73K, we can put it in the small-cap category
AIVI’s shares are currently trading at -100% lower than its intrinsic value of $2.31, at a price tag of $0.01, based on my discounted cash flow model. The mismatch signals a potential chance to invest in AIVI at a discounted price. In terms of relative valuation, AIVI’s PE ratio is currently around 0x against its its consumer durables peer level of 18x, meaning that relative to other stocks in the industry, we can purchase AIVI’s shares for cheaper. AIVI is also in good financial health, as near-term assets sufficiently cover liabilities in the near future as well as in the long run. More detail on Aivtech International Group here.
SandRidge Permian Trust (NYSE:PER)
SandRidge Permian Trust holds royalty interests in specified oil and natural gas properties in the Permian Basin located in Andrews County, Texas. SandRidge Permian Trust was founded in 2011 and has a market cap of USD $131.25M, putting it in the small-cap stocks category.
PER’s shares are currently hovering at around -58% less than its true value of $6.01, at a price of $2.55, according to my discounted cash flow model. The divergence signals an opportunity to buy PER shares at a low price. Additionally, PER’s PE ratio is trading at around 5.5x while its oil and gas peer level trades at 14.8x, suggesting that relative to other stocks in the industry, PER’s shares can be purchased for a lower price. PER is also a financially healthy company, with current assets covering liabilities in the near term and over the long run. PER also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility. Dig deeper into SandRidge Permian Trust here.
American Shared Hospital Services (AMEX:AMS)
American Shared Hospital Services, together with its subsidiaries, leases radiosurgery and radiation therapy equipment to health care providers primarily in the United States. The company was established in 1980 and with the company’s market cap sitting at USD $15.42M, it falls under the small-cap stocks category.
AMS’s shares are now hovering at around -73% less than its intrinsic value of $9.8, at a price tag of $2.68, according to my discounted cash flow model. This mismatch signals an opportunity to buy AMS shares at a discount. Furthermore, AMS’s PE ratio is trading at 16x compared to its healthcare peer level of 22.5x, implying that relative to its competitors, we can purchase AMS’s shares for cheaper. AMS is also in great financial shape, as near-term assets sufficiently cover liabilities in the near future as well as in the long run. It’s debt-to-equity ratio of 88% has been declining for the past few years revealing AMS’s capacity to reduce its debt obligations year on year. Interested in American Shared Hospital Services? 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.