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 ?
The Ellis Martin Report (TEMR) is an internet based radio program showcasing potentially undervalued companies to an audience of potential retail investors and fund managers that comprise our listening audience.
The portfolio will continue to be focused on undervalued companies, but the majority of them will be FTSE 100 and FTSE 250 index constituents," according to the statement.
Prescience Point announced that it is long MiMedx, which it called "one of the most undervalued companies we have ever identified." Prescience Point estimates the stock is "worth at least $8.09, almost 4x the current price." The firm stated in its newly published report: "As frequent publishers of short-biased research, we believe short-selling is vital to the markets and agree with critics that MiMedx has engaged in wrongdoing.
The company strategy is to acquire controlling equity interests in undervalued companies and then take an active role in improving their performance - accelerating their growth by providing them with both access to capital and to management expertise.
Having made his fortune as a stock-picker, Buffett understands the need to get good value when you invest, and he's often held out for opportunities to pick up undervalued companies at bargain prices.
BPI Securities president Haj Narvaez said: 'Given the decline in the market, we believe that this would be a good entry point for newbie investors to slowly select stocks to hold on to for the next couple of years, and an opportunity for existing investors to consider undervalued companies.'
Most importantly, firms should remember that activist shareholders are there to help undervalued companies boost their worth.
We also like undervalued companies where the market value is lower than the business intrinsic value.
As the firm notes on its website, "JANA typically applies a fundamental value discipline to identify undervalued companies that have one or more specific catalysts to unlock value.
The firm makes a broad range of equity and debt investments in undervalued companies that can benefit from Littlejohn's operational and strategic approach.
It is worth mentioning that M&A deals usually help unlock hidden value in undervalued companies and often create benchmark valuations multiples for the remaining players in the Industry.
The Board of Directors has been very pleased with our working relationship with Jan, who has a 35-year history of investing in undervalued companies and helping them achieve their true potential.