- About
- Project Description
- Data Collection
- Task Overview
- Deliverables
- Links
- Key Insights
- Acknowledgements
To conduct an analysis to identify 4 undervalued companies using Finviz by examining gross profit (GP) and gross profit growth (GPG) compared to similar companies in the same sector. Develop a valuation model to project the company’s true value in four years.
This analysis introduces a comprehensive approach designed to filter and select potential undervalued companies based on specific criteria. By harnessing market data and financial metrics, the goal involves uncovering four companies that may be grossly undervalued and carry out financial analysis comparing them with other companies in same sector whilst using financial valuation modelling to predict if these companies would perform well or not in the next four years.
- Use Finviz to identify a company you believe is undervalued.
- Collect data on the company’s gross profit and gross profit growth.
- Retrieve similar data for other companies in the same sector.
Based on these criteria, four companies - GigaCloud Technology Inc (GCT), APA Corporation (Energy), Main Street Capital Corporation (Financial), and Atkore Inc (Industrials) - presumed to be undervalued were selected and further analysed.
- Compare the gross profit and gross profit growth of your chosen company with its sector peers.
- Retrieve the current valuation of the company and its peers.
- Create a model projecting the company’s value in four years based on current GP, GPG, and sector trends.
- Analyze the model to determine if the company is currently undervalued or overvalued.
- Identify an additional variable not captured in the initial analysis (e.g., market conditions, technological advancements, regulatory changes).
- Factor this variable into your valuation model.
- Assess the impact of this variable on the company’s valuation.
- Write a brief explanation of the additional variable.
- Justify why you believe this variable will impact the company’s value.
- Do this for 4 different companies.
- Company Analysis Report: A detailed report on the chosen companies, including GP, GPG, comparative analysis, and current valuation.
- Valuation Model: A model projecting the company’s value in four years, including the additional variable.
- Explanation: A written explanation of the additional variable and its expected impact on the company’s value.
The main insights obtained from the analysis of GigaCloud Technology Inc (GCT), APA Corporation (Energy), Main Street Capital Corporation (Financial), and Atkore Inc (Industrials) are as follows:
- GigaCloud Technology Inc demonstrated the highest gross profit growth rate among the analyzed companies, indicating strong potential for growth in the technology sector. It has a higher Enterprise Value (EV) than its market capitalization, suggesting potential liabilities or debt.
- APA Corporation experienced fluctuations in gross profit growth, with significant increases in 2021 and 2022 followed by a decline in 2023. The company is projected to have a market capitalization of $21.66 billion in 2027, indicating potential growth opportunities in the energy sector.
- Main Street Capital Corporation's financial metrics and growth rates indicate stability and potential for continued growth in the financial industry.
- Atkore Inc experienced fluctuations in gross profit, with a slight decrease in gross margin in Q2 2024, raising questions about its valuation. The company's market capitalization of $5.17 billion suggests a substantial presence in the industrials sector, despite concerns about being overvalued.
This project is a part of the project requirement required to graduate from Stage 4 at HNG 11 internship for the Data Analyst Track. Special appreciation to the organizers of the internship, and all the mentors for their guidance.