For value investors, the overriding goal is to identify undervalued (and undervalued) companies to target before the broader market becomes interested in them and, in theory, correct the difference between the stock price and the true underlying value. Ideally, this would mean investing in a company’s stock while that firm shows signs of being undervalued, but before the share price rises.
In reality, however, many such companies don’t come to investors’ attention until their price changes—after all, there’s no guarantee that the market will actually adjust the price of a value stock to match its underlying value. and will not do this according to any specific schedule. So the ultimate goal for some value investors may be to look for companies with a recent history of share price growth that also continue to present key value indicators.
Diebold Nixdorf: No profit, but profitability improving and value signs flashing
Diebold Nixdorf today
Diebold Nixdorf
(As of December 16, 2024 ET)
- 52 week range
- $27.43
▼
$51.81
- P/E ratio
- 367.41
- Target price
- $62.50
Diebold Nixdorf New York Stock Exchange: DBD is a financial and retail services company that may be undervalued despite recent share price gains. DBD shares are up more than 73% in the year to December 12, 2024. That’s despite a brief setback in early November after the company posted worse-than-expected earnings results, including a surprise loss.
However, Diebold executives appeared unfazed by the one-time results as the company said it expects to hit the high end of its adjusted EBITDA guidance range by year end.
Diebold has been making efforts to streamline its operations and improve profitability, and in the process, the company has increased its gross margin for nearly two consecutive years. Moreover, Diebold’s P/S ratio is just 0.5, making it a strong buy candidate. This may be why the company received a Buy rating with a 30.5% upside despite last quarter’s setbacks.
CMB.TECH: Modernization of a shipping company
Euronav today
(As of December 16, 2024 ET)
- 52 week range
- $8.59
▼
$21.26
- Dividend yield
- 6.03%
- P/E ratio
- 1.45
CMB.TECH New York Stock Exchange: CMBTformerly known as Euronav, is actually trading at a 52-week low as of December 12, 2024, but this is largely due to the fact that the company’s share price took off in mid-2022 and remained there until October 2024, when it fell to the previous level. levels. The shipping company earned more than $98 million in profit in the latest quarter as it reported a new time charter contract, pushing its backlog to more than $2 billion.
CMB is taking steps to diversify its aging fleet by selling some of its vessels and acquiring new ones. At the same time, the company is making efforts to decarbonize its operations, part of a growing trend toward the use of renewable energy in the shipping industry. All these efforts can attract the attention of investors.
The shipping industry could be in dire straits in 2025 given the global political climate, so it is possible that CMB has not yet reached its bottom. However, with a forward P/E ratio of 1.6, the company already looks undervalued.
StealthGas: falling shares, but strong fundamentals
StealthGas today
(As of December 16, 2024 ET)
- 52 week range
- $4.89
▼
$8.84
- P/E ratio
- 2.77
Another relatively small player in the shipping and transportation industry, StealthGas Inc. NASDAQ: GASprimarily serves liquefied natural gas producers around the world. This company, with a market capitalization of just $190 million as of December 13, 2024, has a P/S ratio of 1.2 and a debt-to-equity ratio of just 0.13.
StealthGas’ latest quarterly results, released Nov. 25, show the profitable company is growing rapidly. The company reported net income of nearly $56 million for the first three quarters of the year, a record high and up 29% from the same period in 2023. Revenue for the quarter was also up nearly 17% year-over-year. -year.
The firm is also aggressively repaying debt, earning a total of approximately $107 million in debt repayments through the first three quarters of 2024 and having a significant cash balance to continue those efforts.
The fact that GASS shares are down almost 18% in the year to December 13, 2024 is perhaps more reflective of the challenges and uncertainty facing the broader shipping industry in recent months than StealthGas itself. StealthGas has not yet been rated by a Wall Street analyst, but value investors may nonetheless take note of indicators that suggest the company could be poised for a breakout in a more favorable industry-wide environment.
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