undervalued company

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 ?
E[acute accent]Virgil Williams, CEO of Asgard Holdings, stated, "We are honored to have their firm pick our stock as the latest promising undervalued company.
is an exciting small company that is probably the most undervalued company that we have ever seen given its current sales growth rate and tiny market cap.
The road show was an outlet Dicom to convey our message as a heavily undervalued company setting the standard in a niche market.
The group offers several investment recommendations, including: Viacom (AMEX:VIA), Action Performance (Nasdaq:ACTN), and USA Networks (Nasdaq:USAI), about which Haverty states, "I think the most undervalued company in the whole sector is the USA Network.
Tuchman feels that Targeted Genetics offers investors the opportunity to invest in an undervalued company that could emerge as a leader in gene therapies.
Contey also added that "With our recent acquisitions, we are pleased with our current prospects for increasing shareholder value in the near term; we consider ourselves to be an undervalued company, given our revised estimated earnings for 1997 of around $500,000.