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Companies, such as Sinarmas Land, are deemed to be undervalued because their shares are currently trading below their true values. There’s a few ways you can value a company. The most popular methods include discounting the company’s cash flows it is expected to create in the future, or comparing its price to its peers or the value of its assets. Analysing the most recent financial data, I’ve created a list of companies that compare favourably in all criteria, making them potentially good investments.
Sinarmas Land Limited (SGX:A26)
Sinarmas Land Limited, an investment holding company, engages in the property business in Indonesia, China, Malaysia, Singapore, and United Kingdom. Founded in 1994, and now led by CEO Muktar Widjaja, the company size now stands at 6,000 people and with the stock’s market cap sitting at SGD SGD1.64B, it comes under the small-cap stocks category.
A26’s stock is currently trading at -81% lower than its value of $2, at the market price of S$0.39, according to my discounted cash flow model. The mismatch signals a potential chance to invest in A26 at a discounted price. Additionally, A26’s PE ratio stands at around 4.6x against its its Real Estate peer level of, 10.4x indicating that relative to its peers, we can purchase A26’s shares for cheaper. A26 is also strong in terms of its financial health, as short-term assets amply cover upcoming and long-term liabilities.
Dig deeper into Sinarmas Land here.
Singapore Shipping Corporation Limited (SGX:S19)
Singapore Shipping Corporation Limited, an investment holding company, owns and manages ships in Singapore, Japan, and internationally. Singapore Shipping was formed in 1988 and has a market cap of SGD SGD124.55M, putting it in the small-cap category.
S19’s shares are currently hovering at around -60% beneath its intrinsic level of $0.71, at a price of S$0.28, according to my discounted cash flow model. This price and value mismatch indicates a potential opportunity to buy the stock at a low price. Moreover, S19’s PE ratio stands at around 9.78x while its Shipping peer level trades at, 13.05x implying that relative to other stocks in the industry, we can invest in S19 at a lower price. S19 is also robust in terms of financial health, as near-term assets sufficiently cover liabilities in the near future as well as in the long run.
Interested in Singapore Shipping? Find out more here.
Avi-Tech Electronics Limited (SGX:BKY)
Avi-Tech Electronics Limited provides burn-in and manufacturing services for the semiconductor, electronics, and life sciences industries. Started in 1981, and currently run by , the company provides employment to 180 people and with the company’s market cap sitting at SGD SGD74.41M, it falls under the small-cap group.