Natural Health Trends and Orient Paper are two of the stocks I have identified as undervalued. This means their current share prices are trading at levels less than what the companies are actually worth. 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.

Natural Health Trends Corp. (NASDAQ:NHTC)

Natural Health Trends Corp., a direct-selling and e-commerce company, provides personal care, wellness, and lifestyle products under the NHT Global brand in North America, Greater China, South Korea, Singapore, Malaysia, Japan, Europe, Russia, and Kazakhstan. Founded in 1988, and headed by CEO Chris Sharng, the company currently employs 143 people and has a market cap of USD $205.89M, putting it in the small-cap group.

NHTC’s stock is now hovering at around -58% less than its true level of $44.15, at a price tag of $18.46, based on my discounted cash flow model. This discrepancy signals a potential opportunity to buy NHTC shares at a low price. Moreover, NHTC’s PE ratio is trading at around 4.4x compared to its personal products peer level of 22.5x, indicating that relative to other stocks in the industry, we can purchase NHTC’s shares for cheaper. NHTC is also a financially robust company, as near-term assets sufficiently cover liabilities in the near future as well as in the long run. NHTC also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility.

Orient Paper, Inc. (AMEX:ONP)

Orient Paper, Inc. produces and distributes paper products primarily in the People’s Republic of China. Formed in 1996, and headed by CEO Zhenyong Liu, the company size now stands at 475 people and with the stock’s market cap sitting at USD $28.29M, it comes under the small-cap stocks category.

ONP’s shares are currently hovering at around -43% below its intrinsic level of $2.24, at a price tag of $1.27, based on its expected future cash flows. This mismatch indicates a potential opportunity to buy low. Furthermore, ONP’s PE ratio is around 4.3x against its its paper and forest products peer level of 19.8x, indicating that relative to its competitors, you can buy ONP’s shares at a cheaper price. ONP is also strong in terms of its financial health, with near-term assets able to cover upcoming and long-term liabilities. The stock’s debt-to equity ratio of 15% has for the last couple of years signalling ONP’s ability

American Shared Hospital Services (AMEX:AMS)

American Shared Hospital Services, together with its subsidiaries, leases radiosurgery and radiation therapy equipment to health care providers primarily in the United States. American Shared Hospital Services was founded in 1980 and with the stock’s market cap sitting at USD $15.70M, it comes under the small-cap group.

AMS’s shares are currently trading at -68% beneath its value of $8.48, at the market price of $2.7, according to my discounted cash flow model. This mismatch indicates a chance to invest in AMS at a discounted price. Furthermore, AMS’s PE ratio stands at 16.1x while its healthcare providers and services peer level trades at 22x, indicating that relative to its peers, we can purchase AMS’s shares for cheaper. AMS also has a healthy balance sheet, with short-term assets covering liabilities in the near future as well as in the long run. It’s debt-to-equity ratio of 88% has been falling over the past couple of years signalling AMS’s ability to reduce its debt obligations year on year.

For more financially sound, undervalued companies to add to your portfolio, you can use our free platform to explore our 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.