Walgreens Boots Alliance and Owens & Minor are two of the companies on my list that I consider are 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.
Walgreens Boots Alliance, Inc. (NASDAQ:WBA)
Walgreens Boots Alliance, Inc. operates as a pharmacy-led health and wellbeing company. Started in 1901, and now run by Stefano Pessina, the company employs 290,000 people and with the company’s market cap sitting at USD $63.80B, it falls under the large-cap group.
WBA’s shares are now trading at -35% beneath its true value of $99.81, at the market price of US$64.50, based on my discounted cash flow model. This mismatch indicates a chance to invest in WBA at a discounted price. Moreover, WBA’s PE ratio stands at 16.11x against its its Consumer Retailing peer level of, 21.22x meaning that relative to its competitors, WBA’s stock can be bought at a cheaper price. WBA 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. More on Walgreens Boots Alliance here.
Owens & Minor, Inc. (NYSE:OMI)
Owens & Minor, Inc., together with its subsidiaries, operates as a healthcare services company in the United States, the United Kingdom, Ireland, France, Germany, and other European countries. Started in 1882, and currently headed by CEO Paul Phipps, the company now has 8,600 employees and has a market cap of USD $1.04B, putting it in the small-cap group.
OMI’s stock is currently trading at -22% lower than its real value of $21.57, at a price of US$16.72, based on its expected future cash flows. The discrepancy signals an opportunity to buy low. In addition to this, OMI’s PE ratio is currently around 16.44x relative to its Healthcare peer level of, 21.34x indicating that relative to its competitors, OMI can be bought at a cheaper price right now. OMI is also in good financial health, with near-term assets able to cover upcoming and long-term liabilities. More on Owens & Minor here.
Amira Nature Foods Ltd. (NYSE:ANFI)
Amira Nature Foods Ltd. engages in processing, sourcing, and selling packaged Indian specialty rice. Started in 1915, and currently run by Karan Chanana, the company currently employs 236 people and with the company’s market cap sitting at USD $97.60M, it falls under the small-cap group.
ANFI’s shares are currently floating at around -74% less than its intrinsic level of $8.51, at a price tag of US$2.22, according to my discounted cash flow model. The discrepancy signals an opportunity to buy low. Also, ANFI’s PE ratio is trading at 2.64x relative to its Food peer level of, 19.28x indicating that relative to its peers, you can buy ANFI for a cheaper price. ANFI is also in good financial health, as near-term assets sufficiently cover liabilities in the near future as well as in the long run. The stock’s debt-to-equity ratio of 67.69% has been falling for the past few years revealing its capability to reduce its debt obligations year on year. Continue research on Amira Nature Foods here.
For more financially sound, undervalued companies to add to your portfolio, explore this interactive list of undervalued stocks.