A stock that you can buy at a price below what it is worth is considered undervalued. This is the case for Capstone Mining and AirIQ. 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.
Capstone Mining Corp. (TSX:CS)
Capstone Mining Corp. engages in the exploration and production of base metals in the United States, Mexico, and Canada. The company provides employment to 1209 people and with the market cap of CAD CA$446.77M, it falls under the small-cap category.
CS’s stock is now floating at around -24% beneath its actual level of $1.46, at a price of CA$1.12, according to my discounted cash flow model. The discrepancy signals an opportunity to buy low. In addition to this, CS’s PE ratio is trading at 4.18x against its its Metals and Mining peer level of, 12.29x implying that relative to its competitors, you can purchase CS’s stock for a lower price right now. CS is also a financially robust company, as near-term assets sufficiently cover liabilities in the near future as well as in the long run.
Continue research on Capstone Mining here.
AirIQ Inc. (TSXV:IQ)
AirIQ Inc. develops and operates an asset management system using specialized software, digitized mapping, wireless communications, the Internet, and the global positioning system in Canada. AirIQ was established in 1935 and with the market cap of CAD CA$5.39M, it falls under the small-cap group.
IQ’s stock is currently trading at -45% below its value of $0.33, at a price of CA$0.18, based on my discounted cash flow model. The discrepancy signals an opportunity to buy low. Additionally, IQ’s PE ratio is around 20.43x while its Internet peer level trades at, 42.3x indicating that relative to its comparable set of companies, we can purchase IQ’s shares for cheaper. IQ is also strong in terms of its financial health, with near-term assets able to cover upcoming and long-term liabilities. IQ also has a miniscule amount of debt on its balance sheet, which gives it headroom to grow and financial flexibility. More on AirIQ here.
Grand Peak Capital Corp. (CNSX:GPK)
Grand Peak Capital Corp. is a private equity and venture capital firm specializing in growth capital, management or leveraged buyouts, turnaround situations, and reviewing investment opportunities in undervalued companies. The company was established in 1952 and with the stock’s market cap sitting at CAD CA$9.00M, it comes under the small-cap group.
GPK’s stock is now floating at around -63% lower than its true value of $0.97, at a price of CA$0.36, based on its expected future cash flows. This discrepancy gives us a chance to invest in GPK at a discount. Furthermore, GPK’s PE ratio is trading at around 7.55x relative to its Capital Markets peer level of, 11.94x implying that relative to its competitors, we can buy GPK’s stock at a cheaper price today. GPK is also in great financial shape, with short-term assets covering liabilities in the near future as well as in the long run. GPK has zero debt on its books as well, meaning it has no long term debt obligations to worry about. Continue research on Grand Peak Capital here.
For more financially sound, undervalued companies to add to your portfolio, explore this interactive list of undervalued stocks.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.