Greek drybulk shipping company Globus Maritime Limited (GLBS) tops our list of undervalued stocks trading at less than $50 for February 2024, with a price-to-book ratio of 0.25 and 83% returns in the last year.
A low price-to-book ratio may be an indication that a company's stock is undervalued in the market. Below, we look closely at several undervalued stocks under $50 for February 2024. Our screen includes companies listed on the New York Stock Exchange (NYSE) or the Nasdaq with positive 1-year total returns and the lowest price-to-book ratios.
All data are as of Feb. 10, 2024, except for data related to Ebang International Holdings, OptimumBank Holdings, Profire Energy, and Pacific Gas & Electric, which are as of Feb. 14.
Key Takeaways
- A company's price-to-book ratio measures its market price per share as compared with its book value per share.
- Lower price-to-book ratios may indicate companies that are undervalued, making them a prime target for value investors.
- Value investors believe that the market will eventually correct pricing of undervalued stocks, providing an opportunity for those who have invested previously to generate a profit.
- The top undervalued stocks on the NYSE or the Nasdaq for February 2024 that are trading for under $50 include Globus Maritime, Diversified Healthcare Trust, Telesat, Smart Sand, Star Equity Holdings, Vast Platform, Xcel Brands, Ebang International Holdings, OptimumBank Holdings, Profire Energy, and Pacific Gas & Electric.
Globus Maritime Limited (GLBS)
- Price-to-book ratio: 0.25
- Price: $2.16
- Market capitalization: $44.5 million
- Sector: Industrials (Transportation)
- 1-Year total return: 83.1%
Globus Maritime is a Greek shipping company providing worldwide maritime transportation services. Its fleet transports coal, iron ore, steel, grain, and similar products. In January, the company announced that it had taken delivery of its latest carrier, bringing the size of its fleet up to seven ships.
Diversified Healthcare Trust (DHC)
- Price-to-book ratio: 0.27
- Price: $2.70
- Market capitalization: $649.2 million
- Sector: Real Estate
- 1-Year total return: 283.1%
Diversified Healthcare Trust is a real estate investment trust (REIT) that targets healthcare properties in the U.S. Its portfolio includes close to 400 properties across the country and is valued at more than $7 billion. Diversified Healthcare announced in January that its latest dividend payment of $0.01 per share would be paid on Feb. 15.
Telesat Corp. (TSAT)
- Price-to-book ratio: 0.27
- Price: $9.67
- Market capitalization: $132.4 million
- Sector: Communication Services
- 1-Year total return: 6.3%
Telesat is a Canadian global satellite operator providing service to telecom, government, and aeronautic clients around the world. In the third quarter of 2023, Telesat reported a modest decline in revenue and sharply narrowing net losses year-over-year.
Price-to-book ratio compares a company's market capitalization to its book value. It is calculated by dividing market price per share by book value per share. A stock with a price-to-book ratio under 1.0 may appeal to value investors as potentially undervalued.
Smart Sand Inc. (SND)
- Price-to-book ratio: 0.28
- Price: $1.81
- Market capitalization: $74.4 million
- Sector: Materials
- 1-Year total return: 1.7%
Smart Sand provides industrial sand and similar products to customers in the oil and gas industry. It owns and operates sand mines in Wisconsin and Illinois.
Star Equity Holdings Inc. (STRR)
- Price-to-book ratio: 0.34
- Price: $0.97
- Market capitalization: $15.4 million
- Sector: Healthcare
- 1-Year total return: 2.6%
Star Equity is a healthcare solutions company that operates diagnostic services, imaging, and construction businesses through subsidiaries. Its construction business builds modular housing units for both commercial and residential real estate projects.
Vasta Platform Limited (VSTA)
- Price-to-book ratio: 0.36
- Price: $4.01
- Market capitalization: $331.4 million
- Sector: Consumer staples
- 1-Year total return: 0.8%
Vasta Platform is a Brazilian education and digital transformation company. It promotes the use of digital technology in K-12 classrooms within private schools across Brazil.
Xcel Brands Inc. (XELB)
- Price-to-book ratio: 0.37
- Price: $1.07
- Market capitalization: $21.3 million
- Sector: Consumer discretionary
- 1-Year total return: 28.9%
Xcel Brands is a media and consumer products firm that designs, markets, and provides media services related to apparel, footwear, accessories, and related products across several brand lines. Xcel's brands include Halston, Judith Ripka, and others. In January, Xcel announced a 30% investment in ORME, a short-form video marketplace rewarding customers for interacting with brands.
Ebang International Holdings Inc. (EBON)
- Price-to-book ratio: 0.43
- Price: $10.42
- Market capitalization: $68.2 million
- Sector: Information Technology
- 1-Year total return: 55.5%
Ebang is a Chinese technology company that researches and develops chip technology for use in blockchain applications as well as cryptocurrency mining hardware. In its most recent fiscal report, for the first half of fiscal year 2023, Ebang reported narrowing net losses and an 84% year-over-year decrease in net revenues.
OptimumBank Holdings Inc. (OPHC)
- Price-to-book ratio: 0.44
- Price: $4.05
- Market capitalization: $29.4 million
- Sector: Financials
- 1-Year total return: 1.6%
OptimumBank Holdings is the bank holding company for Optimum Bank, a retail and corporate bank providing cash management services, savings and checking accounts, and related products.
Profire Energy Inc. (PFIE)
- Price-to-book ratio: 1.20
- Price: $1.38
- Market capitalization: $65.4 million
- Sector: Energy
- 1-Year total return: 21.7%
Profire Energy makes industrial combustion equipment across categories including combustion control, burner management, fuel and gas train management, flame arrestors, and waste management. For the third quarter of 2023, net income increased by two-thirds, and revenue rose by 16% year-over-year, driven by strong customer demand and diversification efforts.
- Price-to-book ratio: 1.44
- Price: $16.34
- Market capitalization: $34.9 billion
- Sector: Utilities
- 1-Year total return: 4.7%
Pacific Gas & Electric, known as PG&E, is a utility holding company which, through subsidiaries, provides generation, transmission, and distribution of electricity and natural gas to utilities customers in California. On Feb. 14, the company declared its regular cash dividend of $0.01 per common share for the first quarter, payable on March 28.
How We Selected Undervalued Stocks
Our screen for undervalued stocks includes companies listed on the Nasdaq or the NYSE that are trading below $50 per share and that had positive total returns for the trailing 12-month period. We ranked those firms by lowest price-to-book ratio, calculated by dividing the market price per share by the book value per share, and selected the top company for each GCIS sector.
Stocks with price-to-book ratios lower than 1 are generally considered to be undervalued. Along with metrics like price-to-earnings ratio, price-to-book is one of the key measures that value investors use to identify potential stocks for investment.
Successful value investors buy undervalued stocks which later rise in price to reflect the true value of the associated companies. Particularly for undervalued stocks trading at less than $50 each, this is an accessible investment strategy for many investors. A variety of online brokers and other options make targeting these stocks easy. Investors can then wait to see if and when the price of a stock rises to reflect its underlying value.
However, there are risks to focusing on undervalued stocks. A single metric like price-to-book, while helpful, does not always give a complete picture of whether a stock is under- or overvalued. Similarly, there is no guarantee that the market will correct the price of undervalued stocks in any particular timeframe or even at all.
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As of the date this article was written, the author does not own any of the above stocks.
