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Companies that trade at market prices below their actual values, such as Sinarmas Land and Singapore Shipping, are perceived to be undervalued. Smart investors can make money from this discrepancy by buying these shares, because they believe the current market prices will eventually move towards their true value. If you’re looking for capital gains in your next investment, I suggest you take a look at my list of potentially undervalued stocks.
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 currently run by Muktar Widjaja, the company provides employment to 6,000 people and with the stock’s market cap sitting at SGD SGD1.49B, it comes under the small-cap group.
A26’s stock is currently hovering at around -77% beneath its real value of $1.5, at a price of S$0.35, according to my discounted cash flow model. This discrepancy gives us a chance to invest in A26 at a discount. In terms of relative valuation, A26’s PE ratio stands at 4.31x relative to its Real Estate peer level of, 9.91x implying that relative to its comparable set of companies, we can buy A26’s stock at a cheaper price today. A26 is also a financially healthy company, with current assets covering liabilities in the near term and over the long run.
Interested in Sinarmas Land? Find out more 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 founded in 1988 and with the company’s market capitalisation at SGD SGD124.55M, we can put it in the small-cap stocks category.
S19’s stock is currently trading at -55% less than its real value of $0.63, at a price tag of S$0.28, according to my discounted cash flow model. The divergence signals an opportunity to buy S19 shares at a low price. In terms of relative valuation, S19’s PE ratio stands at 8.94x while its Shipping peer level trades at, 11.07x indicating that relative to other stocks in the industry, you can buy S19 for a cheaper price. S19 is also strong in terms of its financial health, with current assets covering liabilities in the near term and over the long run.
More on Singapore Shipping 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. Founded in 1981, and currently lead by , the company provides employment to 180 people and with the company’s market cap sitting at SGD SGD70.13M, it falls under the small-cap group.