Undervalued companies, such as Stamford Land and China Sunsine Chemical Holdings, are those that trade at a price below their actual values. 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.
Stamford Land Corporation Ltd (SGX:H07)
Stamford Land Corporation Ltd, an investment holding company, owns, operates, and manages luxury hotels in Singapore, Australia, and New Zealand. Stamford Land was founded in 1935 and has a market cap of SGD SGD419.08M, putting it in the small-cap group.
H07’s stock is now hovering at around -73% less than its value of $1.82, at a price of S$0.48, based on its expected future cash flows. The difference between value and price signals a potential opportunity to buy H07 shares at a discount. What’s even more appeal is that H07’s PE ratio stands at 10.56x relative to its Hospitality peer level of, 23.61x implying that relative to its comparable company group, we can buy H07’s stock at a cheaper price today. H07 is also strong financially, as near-term assets sufficiently cover liabilities in the near future as well as in the long run. It’s debt-to-equity ratio of 56.20% has been falling for the last couple of years revealing H07’s ability to pay down its debt. Interested in Stamford Land? Find out more here.
China Sunsine Chemical Holdings Ltd. (SGX:CH8)
China Sunsine Chemical Holdings Ltd., an investment holding company, manufactures and sells rubber chemicals in the People’s Republic of China, rest of Asia, the United States, Europe, and internationally. Formed in 2006, and now run by Jing Fu Liu, the company currently employs 2,098 people and has a market cap of SGD SGD747.37M, putting it in the small-cap group.
CH8’s shares are currently hovering at around -42% less than its true value of ¥2.61, at the market price of S$1.52, according to my discounted cash flow model. This mismatch signals an opportunity to buy CH8 shares at a discount. Additionally, CH8’s PE ratio is trading at around 8.17x relative to its Chemicals peer level of, 13.65x suggesting that relative to its peers, we can buy CH8’s stock at a cheaper price today. CH8 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. CH8 also has a miniscule amount of debt on its balance sheet, which gives it headroom to grow and financial flexibility. Dig deeper into China Sunsine Chemical Holdings here.