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    Central Securities (CET) Could Be 64% Undervalued Following Its Strong Recent Run

    Simply Wall St·10/10/2026 23:28:25
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    Central Securities: Recent Returns Put Closed End Fund In Focus

    Central Securities (CET) has caught investor attention after a strong run, with total returns of 16.6% over the past year and 81.1% over the past 3 years.

    The closed end fund structure, combined with a recent 10.1% year to date gain and an indicated intrinsic discount of 63.5%, is prompting closer scrutiny of how this New York based manager is currently priced.

    Recent share price action has been fairly steady, with Central Securities posting a 6.2% 90 day share price return and a 10.1% year to date share price return against a backdrop of strong longer term total shareholder returns. This may signal that investors are reassessing the stock’s current intrinsic discount.

    Compare Central Securities' recent run with other potential deep value ideas by scanning our hand picked list of 28 high quality undervalued stocks that also show solid balance sheets and cash flows.

    Central Securities now combines a strong recent run with a wide stated intrinsic discount. Does that setup still tilt the risk reward in favour of new buyers, or does it mostly reward existing holders?

    Price to Earnings of 7.6x: Is it justified?

    CET closed at $55.87 while trading on a P/E of 7.6x, and that figure looks low compared with both peers and the wider US Capital Markets group.

    The P/E ratio compares what investors pay today for each dollar of earnings. For a closed end fund like Central Securities, this can reflect how the market feels about the durability and quality of its underlying income stream rather than just short term mark to market gains.

    Central Securities carries a P/E of 7.6x against a peer average of 13.4x and an industry level of 39.3x, a wide gap that suggests the market is applying a heavy discount to the fund's earnings profile.

    See what the numbers say about this price — find out in our valuation breakdown.

    Result: Price to Earnings of 7.6x (UNDERVALUED)

    Still, the story can change quickly if Central Securities experiences a sharp drop in its underlying holdings or if the wide intrinsic discount begins to narrow.

    Find out about the key risks to this Central Securities narrative.

    Another View: Our DCF Model Says CET Is Deeply Undervalued

    The simple P/E comparison points to value in Central Securities. A different lens tells an even stronger story. Our DCF model estimates future cash flows at about $152.99 per share while CET trades at $55.87. That gap implies a very wide margin between market price and modeled value. Is this a genuine opportunity or just a sign that the inputs are too optimistic for a closed end fund structure?

    Look into how the SWS DCF model arrives at its fair value.

    CET Discounted Cash Flow as at Oct 2026
    CET Discounted Cash Flow as at Oct 2026

    Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Central Securities for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 28 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

    Next Steps

    Plenty in this Central Securities story looks appealing on the surface, yet the mix of concerns and potential upside deserves your own scrutiny. If you want a clearer view of both sides of the ledger, start with the 2 key rewards and 3 important warning signs

    Looking for more investment ideas beyond Central Securities?

    If Central Securities has sharpened your appetite for value, now is the moment to broaden your watchlist with other focused opportunities before they move out of reach.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.