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 ?
Hathaway Corporation develops and acquires undervalued companies that bring a shift in how communications are delivered and serviced globally.
Aggregating more than 170 years of experience, its principals focus on a broadly defined vision of investing in undervalued companies in undervalued market segments.
Goldcross writes, "Hathaway is engaged in the acquisition and development of undervalued companies that provide communications and telecommunications software.
We feel that the acquisition of undervalued companies, generating $10,000,000 or more in annual gross revenues, would work very well for Commonwealth and their stockholders.
The goal of Essex is to assist Commonwealth to acquire two undervalued companies over the next 12 months.
The focus on undervalued companies with dividend strength makes this Fund ideal for investors looking for long-term capital appreciation but who are concerned with capital preservation.
Pender's strategy is to build long-term value by investing its capital into a relatively few undervalued companies and to actively participate in their development so as to enhance their value and the liquidity of Pender's investments.
The best investors look for undervalued companies with low overhead costs, long-term growth potential, solid earnings, and low debt," Hing said.
Pacific also uses its own capital to invest in undervalued companies and assets, primarily in the natural resource, real estate and financial service areas where management initiatives can enhance longer term prospects.
The possibility of a sale by Buffett - famed for making his fortune by picking undervalued companies and rarely selling - often spooks the many investors.
The firm has offices in Los Angeles, CA, Palm Beach, FL, and New York City, NY, and is well known for discovering undervalued companies and bringing them to the attention of the investment community.