undervalued company

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Undervalued Company

A company with a stock price lower than its asset value and/or earnings potential. It can be difficult to determine whether or not a company is undervalued, but a low price-earnings ratio is one way. A price-earnings ratio below 1 indicates that the stock price is less than the company's earnings per share, which may mean that the company is undervalued. Undervalued companies are often target companies in hostile takeovers. See also: Undervalued, Overvalued.

undervalued company

A firm whose assets and potential earning power are not adequately reflected in its stock price. Although such firms are more likely to be subject to takeover attempts than others, determining whether a particular firm is actually undervalued can be quite difficult. See also asset value.
References in periodicals archive ?
Indeed one of the big successes of the year was the continuing support that the institutions gave to the safer, well-managed, often under-valued companies on AIM, even while the markets were having a difficult time.
However, veteran investors are also eyeing possible gains in the many under-valued companies whose stock prices have been eroded in a falling market.
Half of them said they look for under-valued companies.
investors with long-term capital appreciation by investing in Japanese stocks via a direct-research approach that seeks to identify under-valued companies.
Mr Major's role will be to provide leads to enable the firm to buy up under-valued companies which will then be revamped and sold for huge profits.
Investments include distressed-debt portfolios, corporate restructurings, recapitalization of under-valued companies, and the rehabilitation of real estate assets.
Drawing on diverse experiences and extensive resources brought together by its seasoned management team and prestigious advisory board, the Company plans to expand internationally by acquiring and operating profitable, under-valued companies.
The directors, led by chief executive Mr Chris Miller, have tried to convince the City that they have turned the group into a venture capital fund, buying up under-valued companies, turning them around and selling them off.
American Capital is opportunistic and utilizes a bottom-up fundamental investment strategy to find under-followed and under-valued companies that American Capital believes will be well received by its broad institutional clientele as well as retail sales force.
The forward-thinking bank has come up with a new vehicle for management seeking to buy their under-valued companies off the stock market.
Younger America is a holding Company that develops and acquires under-valued companies that provide products to improve the quality of life without the use of potentially harmful drugs or chemicals.
Irwin Newman, Chairman and President of Younger America, has the company focused on acquiring and developing under-valued companies that provide products to improve the quality of life without using potentially harmful drugs or chemicals.