In This Article:
Yuexiu Transport Infrastructure and Johnson Electric Holdings are stocks on my list that are potentially undervalued. This means their current share prices are trading well-below what the companies are actually worth. Investors can profit from the difference by investing in these stocks as the current market prices should eventually move towards their true values. If capital gains are what you’re after in your next investment, I’ve put together a list of undervalued stocks you may be interested in, based on the latest financial data from each company.
Yuexiu Transport Infrastructure Limited (SEHK:1052)
Yuexiu Transport Infrastructure Limited, together with its subsidiaries, invests in, develops, operates, and manages toll expressways and bridges in the People’s Republic of China. The company employs 1482 people and has a market cap of HKD HK$9.99B, putting it in the mid-cap group.
1052’s stock is now floating at around -55% less than its real value of ¥13.16, at a price of HK$5.97, according to my discounted cash flow model. This mismatch signals an opportunity to buy 1052 shares at a discount. In terms of relative valuation, 1052’s PE ratio is trading at around 8.5x relative to its Infrastructure peer level of, 9.17x suggesting that relative to its peers, 1052’s stock can be bought at a cheaper price. 1052 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.
Continue research on Yuexiu Transport Infrastructure here.
Johnson Electric Holdings Limited (SEHK:179)
Johnson Electric Holdings Limited, an investment holding company, researches and develops, manufactures, licenses, and sells motion products, control systems, and flexible interconnects in Europe, the People’s Republic of China, North America, Asia, South America, and internationally. Started in 1959, and currently headed by CEO Shui-Chung Wang, the company provides employment to 39,000 people and with the stock’s market cap sitting at HKD HK$22.98B, it comes under the large-cap category.
179’s shares are currently trading at -29% under its intrinsic value of $37.28, at a price tag of HK$26.65, based on its expected future cash flows. This mismatch indicates a potential opportunity to buy low. Additionally, 179’s PE ratio is trading at around 11.34x compared to its Electrical peer level of, 12.97x implying that relative to its comparable company group, we can purchase 179’s shares for cheaper. 179 is also in good financial health, with near-term assets able to cover upcoming and long-term liabilities.