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Companies with shares trading at a market price below what they are actually worth, such as Thakral and Cortina Holdings, are deemed undervalued. There’s a few ways you can measure the value of a company – you can forecast how much money it will make in the future and base your valuation off of this, or you can look around at its peers of similar size and industry to roughly predict what it should be worth. Below, I’ve created a list of companies that compare favourably in all criteria based on their most recent financial data, making them potentially good investments.
Thakral Corporation Ltd (SGX:AWI)
Thakral Corporation Ltd, an investment holding company, engages in the distribution of lifestyle products and accessories. Thakral was established in 1993 and with the market cap of SGD SGD58.89M, it falls under the small-cap category.
AWI’s stock is currently trading at -86% below its true value of $3.12, at the market price of S$0.45, based on its expected future cash flows. This mismatch indicates a potential opportunity to buy low. In terms of relative valuation, AWI’s PE ratio stands at 1.53x while its Retail Distributors peer level trades at, 13.7x implying that relative to its comparable set of companies, AWI can be bought at a cheaper price right now. AWI is also strong financially, with short-term assets covering liabilities in the near future as well as in the long run. It’s debt-to-equity ratio of 31.69% has been reducing for the last couple of years indicating its ability to pay down its debt. Continue research on Thakral here.
Cortina Holdings Limited (SGX:C41)
Cortina Holdings Limited, an investment holding company, engages in the retail and distribution of timepieces and accessories in Singapore, Malaysia, Thailand, Indonesia, Hong Kong, Taiwan, and Russia. Cortina Holdings was established in 1972 and with the stock’s market cap sitting at SGD SGD138.26M, it comes under the small-cap category.
C41’s stock is now hovering at around -73% lower than its intrinsic level of $3.11, at the market price of S$0.83, based on my discounted cash flow model. This discrepancy signals a potential opportunity to buy C41 shares at a low price. In terms of relative valuation, C41’s PE ratio stands at 7.54x while its Specialty Retail peer level trades at, 10x implying that relative to its competitors, you can buy C41’s shares at a cheaper price. C41 is also robust in terms of financial health, with current assets covering liabilities in the near term and over the long run. It’s debt-to-equity ratio of 40.13% has been reducing over the past couple of years showing its capability to pay down its debt. More detail on Cortina Holdings here.