Yahoo Finance June Top Cheap Stocks To Buy
System1 Group and Sanderson Group are two of the companies on my list that I consider are undervalued. 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.
System1 Group PLC (AIM:SYS1)
System1 Group PLC, together with its subsidiaries, provides marketing and market research consultancy services. Started in 1999, and run by CEO John Kearon, the company currently employs 200 people and with the company’s market cap sitting at GBP £36.93M, it falls under the small-cap category.
SYS1’s shares are currently floating at around -67% under its real value of £9.18, at a price tag of UK£3.00, according to my discounted cash flow model. This discrepancy gives us a chance to invest in SYS1 at a discount. Also, SYS1’s PE ratio stands at around 14.85x while its Media peer level trades at, 20.54x indicating that relative to its competitors, SYS1’s shares can be purchased for a lower price. SYS1 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. SYS1 has zero debt on its books as well, meaning it has no long term debt obligations to worry about. More on System1 Group here.
Sanderson Group plc (AIM:SND)
Sanderson Group plc provides software solutions and information technology services for the multi-channel retail, manufacturing, wholesale distribution, and logistics businesses primarily in the United Kingdom and Ireland. Founded in 1983, and run by CEO Ian Newcombe, the company provides employment to 230 people and has a market cap of GBP £63.67M, putting it in the small-cap category.
SND’s shares are currently hovering at around -54% below its true value of £2.33, at the market price of UK£1.07, based on my discounted cash flow model. This mismatch indicates a potential opportunity to buy low. Furthermore, SND’s PE ratio stands at 18.13x against its its IT peer level of, 28x suggesting that relative to its comparable set of companies, SND can be bought at a cheaper price right now. SND is also a financially healthy company, with current assets covering liabilities in the near term and over the long run.
Interested in Sanderson Group? Find out more here.
Saga plc (LSE:SAGA)
Saga plc engages in insurance, travel, personal finance, healthcare, retirement villages, and media businesses in the United Kingdom. Formed in 1950, and headed by CEO Lance H. Batchelor, the company employs 4,296 people and has a market cap of GBP £1.42B, putting it in the small-cap group.
SAGA’s stock is now trading at -30% below its intrinsic level of £1.8, at the market price of UK£1.27, according to my discounted cash flow model. The discrepancy signals an opportunity to buy low. What’s even more appeal is that SAGA’s PE ratio is trading at 9.76x against its its Insurance peer level of, 16.43x implying that relative to its comparable company group, we can buy SAGA’s stock at a cheaper price today. SAGA is also in great financial shape, with short-term assets covering liabilities in the near future as well as in the long run. Finally, its debt relative to equity is 37.25%, which has been reducing over the past couple of years signifying SAGA’s capability to pay down its debt. More detail on Saga 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.
