December Undervalued Stock Opportunities
Recent undervalued companies based on their current market price include Pets at Home Group and Hikma Pharmaceuticals. Smart investors can make money from this discrepancy by buying these shares, because they believe the current market prices will eventually move towards their true value. If you’re looking for capital gains in your next investment, I suggest you take a look at my list of potentially undervalued stocks.
Pets at Home Group Plc (LSE:PETS)
Pets at Home Group Plc, through its subsidiaries, operates as a specialist retailer of pet food, pet related products, and pet accessories in the United Kingdom. Established in 1991, and headed by CEO Ian Kellett, the company employs 6,811 people and with the company’s market capitalisation at GBP £818.50M, we can put it in the small-cap group.
PETS’s stock is now trading at -20% less than its true value of £2.06, at a price of £1.64, according to my discounted cash flow model. signalling an opportunity to buy the stock at a low price. In terms of relative valuation, PETS’s PE ratio stands at around 11.4x compared to its specialty retail peer level of 13.1x, suggesting that relative to its competitors, you can buy PETS for a cheaper price. PETS is also strong financially, with near-term assets able to cover upcoming and long-term liabilities. The stock’s debt-to equity ratio of 23% has been dropping over time, showing PETS’s ability to pay down its debt.
Hikma Pharmaceuticals PLC (LSE:HIK)
Hikma Pharmaceuticals PLC develops, manufactures, and markets a range of generic, branded, and in-licensed pharmaceutical products in solid, semi-solid, liquid, and injectable final dosage forms worldwide. Started in 1978, and headed by CEO Said Darwazah, the company provides employment to 8,500 people and with the company’s market capitalisation at GBP £2.58B, we can put it in the mid-cap group.
HIK’s stock is now hovering at around -43% lower than its real value of $18.72, at a price of $10.74, according to my discounted cash flow model. The divergence signals an opportunity to buy HIK shares at a low price. What’s even more appeal is that HIK’s PE ratio stands at around 20.7x relative to its pharmaceuticals peer level of 25.7x, meaning that relative to its comparable company group, we can purchase HIK’s shares for cheaper. HIK is also in great financial shape, with current assets covering liabilities in the near term and over the long run. The stock’s debt-to equity ratio of 36% has been declining for the past few years demonstrating its capacity to reduce its debt obligations year on year.
Marshall Motor Holdings Plc (AIM:MMH)
Marshall Motor Holdings plc, through its subsidiaries, provides car and commercial vehicle sale, leasing, vehicle, and other related services in the United Kingdom. Formed in 1909, and currently run by Daksh Gupta, the company now has 3,926 employees and with the stock’s market cap sitting at GBP £126.92M, it comes under the small-cap stocks category.
MMH’s stock is currently hovering at around -20% lower than its actual worth of £2.06, at a price tag of £1.64, according to my discounted cash flow model. signalling an opportunity to buy the stock at a low price. Furthermore, MMH’s PE ratio is around 5.5x while its specialty retail peer level trades at 13.1x, implying that relative to other stocks in the industry, you can buy MMH for a cheaper price. MMH 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. The stock’s debt-to equity ratio of 69% has for the last couple of years signalling MMH’s capability
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.
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.
