6 Stocks Under $3 Undervalued By Levered Free Cash Flows

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 |  Includes: ANAD, COOL, FALC, FLWS, GSL, NWY
by: Kapitall

If you like to go bargain hunting for stocks, here's a list you might be interested in.

We ran a screen for stocks trading between $1-3 per share at market caps between $100-300 million. We then screened this list for stocks with high ratios of levered free cash flow/enterprise value, indicating that these stocks may be undervalued.

Levered free cash flow is the free cash flow after deducting interest payments on outstanding debt. Enterprise value is the sum of the firm's value from all ownership sources: market cap, outstanding debt, and preferred shares.

‪Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.‬

Do you think these stocks will rise to a fairer value? Use this list as a starting point for your own analysis.

List sorted by LFCF/EV.

1. Majesco Entertainment Co. (NASDAQ:COOL): Provides interactive entertainment products primarily in the United States and Europe. Market cap at $102.50M. Price at $2.57. Levered free cash flow at $14.35M vs. enterprise value at $87.95M (implies a LFCF/EV ratio at 16.32%).

2. Falconstor Software Inc. (NASDAQ:FALC): Develops, manufactures, and sells network storage software solutions in the United States and internationally. Market cap at $120.48M. Price at $2.61. Levered free cash flow at $11.07M vs. enterprise value at $80.14M (implies a LFCF/EV ratio at 13.81%).

3. Anadigics, Inc. (NASDAQ:ANAD): Provides semiconductor solutions to the broadband wireless and wireline communications markets. Market cap at $192.92M. Price at $2.85. Levered free cash flow at $15.28M vs. enterprise value at $115.06M (implies a LFCF/EV ratio at 13.28%).

4. Global Ship Lease, Inc. (NYSE:GSL): Engages in owning and chartering out container ships under long term time charters. Market cap at $106.86M. Price at $2.01. Levered free cash flow at $87.46M vs. enterprise value at $661.89M (implies a LFCF/EV ratio at 13.21%).

5. 1-800-Flowers.com Inc. (NASDAQ:FLWS): Operates as a gift retailer in the United States. Market cap at $187.99M. Price at $2.87. Levered free cash flow at $23.54M vs. enterprise value at $193.92M (implies a LFCF/EV ratio at 12.14%).

6. New York & Company Inc. (NYSE:NWY): Operates as a specialty retailer of women's fashion apparel and accessories in the United States. Market cap at $172.78M. Price at $2.78. Levered free cash flow at $18.23M vs. enterprise value at $161.90M (implies a LFCF/EV ratio at 11.26%).

*LFCF/EV data sourced from Yahoo! Finance, all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.