Yahoo Finance Top Cheap Stocks in June
Undervalued companies are those that trade at a price lower than their actual values, such as IGas Energy and Dixons Carphone. There’s a few ways you can value a company. The most popular methods include discounting the company’s cash flows it is expected to create in the future, or comparing its price to its peers or the value of its assets. Analysing the most recent financial data, I’ve created a list of companies that compare favourably in all criteria, making them potentially good investments.
IGas Energy plc (AIM:IGAS)
IGas Energy plc operates as an oil and gas exploration and production company Britain. Founded in 2003, and now run by Stephen Bowler, the company employs 160 people and with the company’s market cap sitting at GBP £143.67M, it falls under the small-cap group.
IGAS’s stock is now trading at -29% lower than its true value of £1.54, at a price of UK£1.09, based on my discounted cash flow model. This difference in price and value gives us a chance to buy low. Furthermore, IGAS’s PE ratio stands at around 8.32x against its its Oil and Gas peer level of, 18.99x indicating that relative to its competitors, IGAS’s stock can be bought at a cheaper price. IGAS is also a financially robust company, as near-term assets sufficiently cover liabilities in the near future as well as in the long run. The stock’s debt-to-equity ratio of 11.70% has been reducing over time, indicating its capability to reduce its debt obligations year on year. Interested in IGas Energy? Find out more here.
Dixons Carphone plc (LSE:DC.)
Dixons Carphone plc operates as an electrical and telecommunications retailer and service company. Started in 1937, and currently lead by Alex Baldock, the company currently employs 42,000 people and with the company’s market cap sitting at GBP £2.29B, it falls under the mid-cap group.
DC.’s shares are now floating at around -35% beneath its actual level of £2.97, at the market price of UK£1.92, based on my discounted cash flow model. signalling an opportunity to buy the stock at a low price. In terms of relative valuation, DC.’s PE ratio stands at around 9.52x while its Specialty Retail peer level trades at, 12.37x meaning that relative to its competitors, you can purchase DC.’s stock for a lower price right now. DC. also has a healthy balance sheet, with short-term assets covering liabilities in the near future as well as in the long run.
Dig deeper into Dixons Carphone here.
Millennium & Copthorne Hotels plc (LSE:MLC)
Millennium & Copthorne Hotels plc owns, operates, leases, manages, and franchises hotels worldwide. Founded in 1994, and currently lead by Kian Tan, the company provides employment to 11,602 people and with the market cap of GBP £1.72B, it falls under the small-cap group.
MLC’s shares are now trading at -20% under its actual value of £6.63, at a price of UK£5.30, based on my discounted cash flow model. The mismatch signals a potential chance to invest in MLC at a discounted price. In terms of relative valuation, MLC’s PE ratio stands at around 13.89x relative to its Hospitality peer level of, 19.36x indicating that relative to its comparable set of companies, MLC can be bought at a cheaper price right now. MLC is also strong financially, as short-term assets amply cover upcoming and long-term liabilities.
Interested in Millennium & Copthorne Hotels? Find out more 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.
