Yahoo Finance Cheap Industrials Stocks To Invest In
Industrial names generally suffer from deep cyclicality which can affect companies operating in areas ranging from machinery to aerospace to construction. Currently, Epwin Group and Norcros are industrial companies I’ve identified as potentially undervalued, meaning their share price is below what these companies are actually worth. Investors can profit from the difference by investing in these industrial stocks as the current market prices should eventually move towards their true values. If capital gains are what you’re after in your next investment, I’ve put together a list of undervalued stocks you may be interested in, based on the latest financial data from each company.
Epwin Group PLC (AIM:EPWN)
Epwin Group Plc manufactures and sells building products in the United Kingdom, rest of Europe, and internationally. Established in 1976, and now run by Jonathan Bednall, the company currently employs 2,542 people and with the company’s market cap sitting at GBP £115.91M, it falls under the small-cap category.
EPWN’s stock is now trading at -45% below its intrinsic level of £1.52, at a price tag of UK£0.83, based on my discounted cash flow model. This mismatch indicates a chance to invest in EPWN at a discounted price. Furthermore, EPWN’s PE ratio is trading at 11.67x compared to its Building peer level of, 12.12x suggesting that relative to its comparable set of companies, EPWN’s shares can be purchased for a lower price. EPWN is also in great financial shape, with near-term assets able to cover upcoming and long-term liabilities. It’s debt-to-equity ratio of 34.58% has been dropping for the past few years indicating EPWN’s capacity to reduce its debt obligations year on year. More detail on Epwin Group here.
Norcros plc (LSE:NXR)
Norcros plc, together with its subsidiaries, develops, manufactures, markets, and exports home consumer products in the United Kingdom, South Africa, and internationally. Founded in 1999, and run by CEO Nicholas Kelsall, the company currently employs 2,000 people and with the company’s market cap sitting at GBP £158.39M, it falls under the small-cap category.
NXR’s shares are currently floating at around -52% under its actual value of £4.07, at the market price of UK£1.95, based on my discounted cash flow model. This discrepancy gives us a chance to invest in NXR at a discount. In terms of relative valuation, NXR’s PE ratio stands at around 15.14x compared to its index peer level of, 17.31x indicating that relative to its competitors, you can purchase NXR’s stock for a lower price right now. NXR is also in great financial shape, as near-term assets sufficiently cover liabilities in the near future as well as in the long run.
More detail on Norcros here.
John Laing Group plc (LSE:JLG)
John Laing Group plc, an investment holding company, originates, invests in, and manages greenfield infrastructure projects. Established in 1848, and run by CEO Olivier Brousse, the company now has 158 employees and has a market cap of GBP £1.42B, putting it in the small-cap group.
JLG’s shares are currently hovering at around 34% below its true value of £2.15, at the market price of UK£2.88, based on its expected future cash flows. The divergence signals an opportunity to buy JLG shares at a low price. Moreover, JLG’s PE ratio stands at around 8.29x while its Construction peer level trades at, 12.76x suggesting that relative to other stocks in the industry, JLG’s shares can be purchased for a lower price. JLG is also strong in terms of its financial health, as current assets can cover liabilities in the near term and over the long run. Finally, its debt relative to equity is 15.41%, which has been diminishing for the past few years demonstrating its capacity to reduce its debt obligations year on year. More detail on John Laing Group 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.
