Undervalued companies, such as Arbor Realty Trust and SYNNEX, are those that trade at a price below their actual values. There’s a few ways you can measure the value of a company – you can forecast how much money it will make in the future and base your valuation off of this, or you can look around at its peers of similar size and industry to roughly estimate what it should be worth. Below, I’ve created a list of companies that compare favourably in all criteria based on their most recent financial data, making them potentially good investments.
Arbor Realty Trust, Inc. (NYSE:ABR)
Arbor Realty Trust, Inc. invests in a diversified portfolio of structured finance assets in the multifamily and commercial real estate markets. Formed in 2003, and currently lead by Ivan Kaufman, the company provides employment to 445 people and with the market cap of USD $731.66M, it falls under the small-cap group.
ABR’s stock is currently trading at -43% under its real value of $15.15, at a price tag of US$8.70, according to my discounted cash flow model. The discrepancy signals an opportunity to buy low. Moreover, ABR’s PE ratio stands at around 7.65x while its Mortgage REITs peer level trades at, 10.37x suggesting that relative to its comparable set of companies, you can buy ABR’s shares at a cheaper price. ABR is also in good financial health, with near-term assets able to cover upcoming and long-term liabilities. It’s debt-to-equity ratio of 304.48% has been diminishing over time, revealing its ability to pay down its debt. More detail on Arbor Realty Trust here.
SYNNEX Corporation (NYSE:SNX)
SYNNEX Corporation provides business process services in North and South America, the Asia-Pacific, Europe, and internationally. Founded in 1980, and headed by CEO Dennis Polk, the company now has 107,400 employees and with the company’s market cap sitting at USD $4.75B, it falls under the mid-cap category.
SNX’s stock is now floating at around -24% less than its true level of $128.13, at a price of US$96.80, based on my discounted cash flow model. The divergence signals an opportunity to buy SNX shares at a low price. Additionally, SNX’s PE ratio is trading at 14.67x compared to its Electronic peer level of, 21.63x indicating that relative to its competitors, SNX can be bought at a cheaper price right now. SNX is also a financially healthy company, with short-term assets covering liabilities in the near future as well as in the long run. More on SYNNEX here.
Patterson Companies, Inc. (NASDAQ:PDCO)
Patterson Companies, Inc. distributes and sells dental and animal health products in the United States, the United Kingdom, and Canada. Founded in 1877, and run by CEO Mark Walchirk, the company size now stands at 7,500 people and with the market cap of USD $2.05B, it falls under the mid-cap group.
PDCO’s stock is currently trading at -46% beneath its true level of $39.52, at a price of US$21.40, based on my discounted cash flow model. This mismatch indicates a potential opportunity to buy low. What’s even more appeal is that PDCO’s PE ratio is trading at around 8.24x compared to its Healthcare peer level of, 19.83x suggesting that relative to its peers, PDCO can be bought at a cheaper price right now. PDCO is also strong financially, as short-term assets amply cover upcoming and long-term liabilities. Dig deeper into Patterson Companies here.
For more financially sound, undervalued companies to add to your portfolio, explore this interactive list of undervalued stocks.