5 Microcap Stocks with Reserves Exceeding Market Capitalization
It can be a challenging task to find decent microcap stocks. However, one indicator that can be helpful is when a company’s reserves are more than its market value. In most cases, this implies that the company is more solid than the stock price suggests. In this article, we will look at five microcaps that you should definitely keep under your radar.
Tamil Nadu Newsprint & Papers Limited (TNPL) is one of the major paper and packaging board manufacturers in India. The company also produces electricity to meet its power requirements through turbines and windmills. Additionally, TNPL extends the process of value addition by turning waste materials into cement, which it then sells, making the whole process not only energy-efficient but also environmentally friendly. TNPL is currently trading at Rs 144 per share. It has delivered an ROE and ROCE of (-0.14 percent) and 5.54 percent, respectively. The company has a huge reserve base of Rs 2,000 crore against its market capitalization of Rs 995 crore, which is more than 2x of its market cap.
Zuari Industries Limited is a diversified conglomerate with a presence in sectors such as engineering services, furniture, real estate, sugar, power, ethanol, and financial services. The company provides engineering and project management solutions, manufactures furniture, develops real estate, produces sugar and ethanol, powers the industry using sugar by-products, and offers various financial and management services. Zuari Industries is currently trading at Rs 322 per share. It has delivered an ROE and ROCE of (-1.69 percent) and 2.82 percent, respectively. The company has a huge reserve base of Rs 4,644 crore against its market capitalization of Rs 960 crore, which is almost 5x of its market cap.
Oswal Green Tech Limited is primarily a real estate development and investment company. The company develops real estate assets for sale and also makes investments in the equity and debt markets. Additionally, it offers intercorporate deposits, making it active in both the property and financial investment sectors. Oswal Green Tech is currently trading at Rs 34.6 per share. It has delivered an ROE and ROCE of 0.34 percent and 0.43 percent, respectively. The company has a huge reserve base of Rs 2,256 crore against its market capitalization of Rs 887 crore, which is over 2.5x of its market cap.
Kuantum Papers Limited is engaged in manufacturing and selling diverse agro- and wood-based paper products in the domestic and global markets. The company’s brand names are known for copier paper, writing and printing paper, and creamwove. It also offers various kinds of paper for books, notebooks, stationery, calendars, and directories, and ships products to foreign markets. Kuantum Papers is currently trading at Rs 97.6 per share. It has delivered an ROE and ROCE of 10.1 percent and 11.1 percent, respectively. The company has a reserve base of Rs 1,196 crore against its market capitalization of Rs 844 crore, which is over 1.4x of its market cap.
Dhampur Sugar Mills Limited is a sugar mill company that produces sugar and sells a variety of by-products such as ethanol, industrial alcohol, chemicals, and country liquor. The company also produces electricity using bagasse and molasses and sells agricultural products through its diversified operations. Dhampur Sugar Mills is currently trading at Rs 126 per share. It has delivered an ROE and ROCE of 4.44 percent and 5.86 percent, respectively. The company has a reserve base of Rs 1,061 crore against its market capitalization of Rs 813 crore, which is over 1.3x of its market cap.
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