There are many methods and metrics used to determine if a company is undervalued, overvalued or fairly valued. One such method among multiplier models is the use of Price to Earnings(P/E).
The Price-to-Earnings (P/E) ratio is a widely used financial metric that helps investors and analysts evaluate a company’s stock by comparing its market value per share to its earnings per share (EPS). The P/E of the company is compared to that of its industry comprising itself and its peers.
A stock with a high P/E ratio can indicate that a stock’s price is high relative to its earnings, suggesting that the stock may be overvalued, while a stock with a low P/E ratio might indicate that the current stock price is low relative to earnings, indicating that the stock may be undervalued.
Listed below are the stocks that are undervalued and those stocks are held by the ace investors:
Talbros Automotive Components Ltd
With a market capitalization of Rs. 1,846 crores, the share of this Gaskets and forging manufacturing company started Friday’s trading session on a flatter note at Rs. 300 compared to its previous close of Rs.299.19. The shares hit a high of Rs. 303., gaining around 1 percent and closed the day at Rs. 298.90 apiece.
Coming onto the company’s financial statement, the revenue increased by 6 percent from Rs. 183 crores in the June quarter to Rs. 194 crores during the September quarter. In addition, the net profits increased by 18 percent from Rs. 17 crores to Rs. 20 crores during the same timeframe.
The company’s stock portrays a price-to-earnings (P/E) ratio of 27.11 which is comparatively less than the price-to-earnings ratio of the industry, viz, 40.61.
According to the BSE data, Ace Investor Mr Vijay Kedia, entering the stock in December 2021, currently holds 1.5 lakh equity shares equivalent to a 1.22 percent stake in this company. The current holding value of his investment amounts to Rs. 4.5 crores.
Ador Welding Ltd
With a market capitalisation of Rs. 2,085 crores, the share of this Welding Products manufacturing company started Friday’s trading session on a higher note at Rs. 1,544.35 compared to its previous close of Rs. 1,533. The shares hit a low of Rs. 1,505, making a loss of around 2 percent and closed the day at Rs. 1,512.70 apiece.
Coming onto the company’s financial statement, the revenue increased by 19 percent from Rs. 190 crores in the June quarter to Rs. 226 crores during the September quarter. In addition, the net profits zoomed by 82 percent from Rs. 11 crores to Rs. 20 crores during the same timeframe.
The company’s stock portrays a price-to-earnings (P/E) ratio of 29.91 which is comparatively less than the price-to-earnings ratio of the industry, viz, 41.15.
According to the BSE data, Ace Investor Mr Ashish Kacholia, entering the stock in June 2021, currently holds 5,95,400 lakh equity shares equivalent to a 4.38 percent stake in this company. The current holding value of his investment amounts to Rs. 91.7 crores.
Federal Bank Ltd
With a market capitalisation of Rs. 37,827 crores, the share of this banking company started Thursday’s trading session on a higher note at Rs. 158 compared to its previous close of Rs. 155. The shares hit a high of Rs. 159, gaining around 2 percent and closed the day at Rs. 156.15 apiece.
Coming onto the company’s financial statement, the Net Interest Income (NII) increased by 7 percent from Rs. 1,919 crores in the June quarter to Rs. 2,056 crores during the September quarter. In addition, the net profits increased by 12 percent from Rs. 854 crores to Rs. 954 crores during the same timeframe.
The company’s stock portrays a price-to-earnings (P/E) ratio of 10.30 which is comparatively less than the price-to-earnings ratio of the industry, viz, 14.58.
According to the BSE data, Ace Investor Mr late Rakesh Jhunjhunwala entered the stock in March 2016, currently, his company holds 2,45,00,000 crores equity shares equivalent to a 1.02 percent stake in this company. The current holding value of his investment amounts to Rs. 1,128 crores.
In addition, Ace investor’s wife Rekha Jhunjhunwala also holds a stake in the company. Currently, she holds 4,82,13,440 crores of equity shares equivalent to 2.01 percent , whose current value amounts to Rs. 749.7 crores.
Written By Vaibhav Patil
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