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How will you find undervalued company out of similar listed companies?

Accounting Financial Reporting Finance
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Question added by Shazia Anees , Assistant Manager Finance , Arham Trading Company
Date Posted: 2015/04/25
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Shahbaz Hayder
by Shahbaz Hayder , Group Head of Finance , Sharif Group of Companies

Compare the P/E ratios of all similar listed companies and the company which has a lower P/E ratio as compared to others is an undervalued company.

Anas Dawah
by Anas Dawah , Senior Internal Auditor , Talal Abu-Ghazaleh Global (TAGI)

We find the firm value based on market multipliers ( marketability ratios ) , then compare it to the firm stock price or the firm adjusted book value . So if the stock price lower the firm is undervalued.

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