The Singapore market has been experiencing significant developments, with digital platforms like Primary Portal transforming equity capital market processes for greater efficiency. In this evolving landscape, identifying undervalued stocks can offer potential opportunities for investors looking to capitalize on discrepancies between a company's market price and its intrinsic value.
Top 5 Undervalued Stocks Based On Cash Flows In Singapore
Overview: Seatrium Limited offers engineering solutions to the offshore, marine, and energy industries and has a market cap of SGD5.48 billion.
Operations: Seatrium Limited generates its revenue primarily from Rigs & Floaters, Repairs & Upgrades, Offshore Platforms and Specialised Shipbuilding (SGD7.26 billion), along with Ship Chartering (SGD31.63 million).
Estimated Discount To Fair Value: 40%
Seatrium Limited is trading 40% below its estimated fair value of S$2.69, with analysts forecasting significant revenue growth at 8.7% annually, outpacing the Singapore market's 3.6%. Despite a low forecasted return on equity (8.2%), Seatrium is expected to become profitable within three years, driven by substantial contracts like the S$11 billion Petrobras FPSO platforms and a third HVDC project for TenneT in the Netherlands worth approximately €2 billion each.
Overview: Frasers Logistics & Commercial Trust (SGX:BUOU) is a Singapore-listed real estate investment trust with a portfolio of 107 industrial and commercial properties worth approximately S$6.4 billion, diversified across Australia, Germany, Singapore, the United Kingdom and the Netherlands, with a market cap of around S$3.70 billion.
Operations: FLCT generates revenue primarily from its portfolio of 107 industrial and commercial properties valued at approximately S$6.4 billion, spread across Australia, Germany, Singapore, the United Kingdom, and the Netherlands.
Estimated Discount To Fair Value: 40.7%
Frasers Logistics & Commercial Trust is trading 40.7% below its estimated fair value of S$1.66, with forecasted revenue growth of 6.2% annually, surpassing the Singapore market's 3.6%. Though it has an unstable dividend track record and debt not well covered by operating cash flow, earnings are projected to grow at 41.17% per year, becoming profitable within three years. Recent earnings showed sales of S$216 million and net income of S$93.59 million for H1 2024.
Overview: Nanofilm Technologies International Limited, with a market cap of SGD553.36 million, provides nanotechnology solutions across Singapore, China, Japan, and Vietnam.
Operations: Nanofilm Technologies International Limited generates revenue from four main segments: Sydrogen (SGD1.05 million), Nanofabrication (SGD16.05 million), Advanced Materials (SGD141.54 million), and Industrial Equipment (SGD37.17 million).
Estimated Discount To Fair Value: 41.8%
Nanofilm Technologies International is trading at S$0.85, significantly below its estimated fair value of S$1.46, indicating it may be undervalued based on cash flows. Earnings are projected to grow 50.66% annually over the next three years, outpacing the Singapore market's 9.2%. Despite lower profit margins this year (1.8%) compared to last year (18.5%), revenue growth is forecasted at 15.1% per year, higher than the market average of 3.6%. Recent leadership changes include Mr. Cho Form Po as joint Company Secretary from July 2024.
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.
Companies discussed in this article include SGX:5E2 SGX:BUOU and SGX:MZH.
