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As of July 2024, the Singapore market continues to present varied opportunities for investors, with certain sectors showing resilience amidst global economic fluctuations. In this context, identifying stocks that are trading below their intrinsic value could offer potential for those looking to invest wisely in undervalued assets.
Top 5 Undervalued Stocks Based On Cash Flows In Singapore
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Singapore Technologies Engineering (SGX:S63) | SGD4.31 | SGD8.09 | 46.7% |
| LHN (SGX:41O) | SGD0.335 | SGD0.37 | 10.3% |
| Hongkong Land Holdings (SGX:H78) | US$3.25 | US$5.80 | 44% |
| Seatrium (SGX:5E2) | SGD1.44 | SGD2.59 | 44.4% |
| Frasers Logistics & Commercial Trust (SGX:BUOU) | SGD0.935 | SGD1.65 | 43.3% |
| Digital Core REIT (SGX:DCRU) | US$0.605 | US$1.12 | 46.2% |
| Nanofilm Technologies International (SGX:MZH) | SGD0.83 | SGD1.45 | 42.7% |
Below we spotlight a couple of our favorites from our exclusive screener
Seatrium
Overview: Seatrium Limited specializes in engineering solutions for the offshore, marine, and energy sectors, with a market capitalization of approximately SGD 4.91 billion.
Operations: The company's revenue is primarily generated from rigs and floaters, repairs and upgrades, offshore platforms, and specialized shipbuilding, totaling SGD 7.26 billion, with an additional SGD 31.63 million from ship chartering.
Estimated Discount To Fair Value: 44.4%
Seatrium Limited, trading at SGD 1.41, is significantly undervalued based on a DCF valuation with a fair value estimate of SGD 2.58. Analyst consensus suggests a potential price increase of 92.4%. Despite high revenue growth forecasts at 8.7% annually, profitability is expected only in the next three years with modest Return on Equity projections at 7.9%. Recent strategic contracts and executive changes signal active management and business expansion, though share price volatility remains a concern.
Digital Core REIT
Overview: Digital Core REIT (SGX: DCRU) is a Singapore-listed real estate investment trust specializing in data centers, backed by Digital Realty, and has a market capitalization of approximately $0.79 billion.
Operations: The company generates its revenue primarily from its commercial REIT segment, totaling approximately $71.10 million.
Estimated Discount To Fair Value: 46.2%
Digital Core REIT, priced at $0.61, is considerably undervalued with a DCF-based fair value of $1.12, reflecting a 46.2% discount. Despite recent drops from the S&P Global BMI Index and executive reshuffles, its financial outlook shows promise with earnings expected to grow substantially by 104.28% annually. However, challenges include an unstable dividend record and a low forecasted Return on Equity at 4.9%. Revenue growth projections are robust compared to the market but modest overall at 9.7% per year.