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COSCO Shipping International (Singapore) and Luxking Group Holdings are companies that are currently trading below what they’re actually worth. There’s a few ways you can determine how much a company is actually worth. 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. The discrepancy between the price and value means investors have an opportunity to buy shares at a discount. Below are the stocks I believe are undervalued on all criteria, based on their latest financial data.
COSCO Shipping International (Singapore) Co., Ltd. (SGX:F83)
COSCO SHIPPING International (Singapore) Co., Ltd., an investment holding company, provides integrated logistics management services in South and Southeast Asia. Formed in 1961, and headed by CEO , the company currently employs 16 people and with the market cap of SGD SGD1.02B, it falls under the small-cap stocks category.
F83’s shares are currently floating at around -94% lower than its actual value of $7.67, at a price of S$0.46, based on my discounted cash flow model. This price and value mismatch indicates a potential opportunity to buy the stock at a low price. What’s even more appeal is that F83’s PE ratio is currently around 10.5x against its its Machinery peer level of, 11.07x suggesting that relative to its comparable company group, we can purchase F83’s shares for cheaper. F83 is also a financially healthy company, as current assets can cover liabilities in the near term and over the long run. F83 also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility. More detail on COSCO Shipping International (Singapore) here.
Luxking Group Holdings Limited (SGX:BKK)
Luxking Group Holdings Limited, an investment holding company, manufactures and markets pressure-sensitive adhesive tape products in the People’s Republic of China and internationally. Luxking Group Holdings was founded in 1995 and with the company’s market capitalisation at SGD SGD4.17M, we can put it in the small-cap category.
BKK’s stock is currently floating at around -79% below its true value of ¥1.54, at a price of S$0.33, based on my discounted cash flow model. The difference between value and price signals a potential opportunity to buy BKK shares at a discount. Furthermore, BKK’s PE ratio is trading at around 4.85x against its its Commercial Services peer level of, 12.93x implying that relative to its peers, you can buy BKK for a cheaper price. BKK is also in great financial shape, as current assets can cover liabilities in the near term and over the long run. The stock’s debt-to-equity ratio of 79.27% has been reducing for the past few years revealing BKK’s capacity to reduce its debt obligations year on year. More detail on Luxking Group Holdings here.