Yahoo Finance Top Rated LSE Stocks You Can Buy For Cheap
Undervalued companies, such as Aggreko and Communisis, trade at a price less than their true values. 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.
Aggreko Plc (LSE:AGK)
Aggreko Plc supplies modular, mobile power, heating, cooling, and related services worldwide. Founded in 1962, and currently lead by Chris Weston, the company currently employs 5,753 people and with the company’s market cap sitting at GBP £1.75B, it falls under the small-cap category.
AGK’s shares are now floating at around -20% under its true value of £8.41, at a price of UK£6.71, according to my discounted cash flow model. The discrepancy signals an opportunity to buy low. Moreover, AGK’s PE ratio stands at 16.15x relative to its Commercial Services peer level of, 22.79x implying that relative to other stocks in the industry, AGK’s shares can be purchased for a lower price. AGK 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 55.05%, which has been declining for the last couple of years revealing AGK’s ability to reduce its debt obligations year on year. Continue research on Aggreko here.
Communisis plc (LSE:CMS)
Communisis plc, together with its subsidiaries, provides integrated marketing services in the United Kingdom and internationally. Formed in 1994, and now run by Andy Blundell, the company provides employment to 2,106 people and with the market cap of GBP £129.75M, it falls under the small-cap stocks category.
CMS’s shares are now hovering at around -40% less than its actual level of £0.99, at a price of UK£0.60, according to my discounted cash flow model. The mismatch signals a potential chance to invest in CMS at a discounted price. Moreover, CMS’s PE ratio is currently around 10.64x against its its Commercial Services peer level of, 22.79x indicating that relative to its competitors, CMS’s stock can be bought at a cheaper price. CMS is also a financially robust company, with near-term assets able to cover upcoming and long-term liabilities.
More detail on Communisis here.
Virgin Money Holdings (UK) plc (LSE:VM.)
Virgin Money Holdings (UK) plc engages in the retail banking business primarily in the United Kingdom. Started in 1995, and run by CEO Jayne-Anne Gadhia, the company size now stands at 3,290 people and has a market cap of GBP £1.54B, putting it in the small-cap stocks category.
VM.’s stock is now trading at -25% beneath its intrinsic value of £4.62, at the market price of UK£3.48, based on its expected future cash flows. The discrepancy signals an opportunity to buy low. Additionally, VM.’s PE ratio stands at around 9.2x relative to its Banks peer level of, 14.96x implying that relative to other stocks in the industry, VM. can be bought at a cheaper price right now. VM. also has a healthy balance sheet, with current assets covering liabilities in the near term and over the long run.
More on Virgin Money Holdings (UK) 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.
