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A stock that you can buy at a price below what it is worth is considered undervalued. This is the case for Sam Woo Construction Group and Great Eagle Holdings. There’s a few ways you can measure the value of a company – you can forecast how much money it will make in the future and base your valuation off of this, or you can look around at its peers of similar size and industry to roughly estimate what it should be worth. Below, I’ve created a list of companies that compare favourably in all criteria based on their most recent financial data, making them potentially good investments.
Sam Woo Construction Group Limited (SEHK:3822)
Sam Woo Construction Group Limited, an investment holding company, primarily provides foundation works and ancillary services in Hong Kong and Macau. Formed in 2012, and now led by CEO Chun Kwok Lau, the company provides employment to 200 people and with the stock’s market cap sitting at HKD HK$349.44M, it comes under the small-cap stocks category.
3822’s stock is now trading at -78% beneath its intrinsic value of $0.96, at the market price of HK$0.21, according to my discounted cash flow model. The divergence signals an opportunity to buy 3822 shares at a low price. Moreover, 3822’s PE ratio is trading at 6.33x against its its Construction peer level of, 12.2x suggesting that relative to its comparable company group, you can buy 3822 for a cheaper price. 3822 is also a financially robust company, as near-term assets sufficiently cover liabilities in the near future as well as in the long run. The stock’s debt-to-equity ratio of 21.63% has been declining over the past couple of years signifying 3822’s capability to reduce its debt obligations year on year. Interested in Sam Woo Construction Group? Find out more here.
Great Eagle Holdings Limited (SEHK:41)
Great Eagle Holdings Limited, an investment holding company, develops, invests in, and manages residential, office, retail, and hotel properties in Asia, North America, Australasia, and Europe. Started in 1963, and currently run by Ka Lo, the company provides employment to 6,540 people and with the stock’s market cap sitting at HKD HK$29.27B, it comes under the large-cap stocks category.
41’s shares are now hovering at around -66% below its actual level of $124.65, at a price of HK$42.50, based on its expected future cash flows. This difference in price and value gives us a chance to buy low. What’s even more appeal is that 41’s PE ratio stands at 3.31x relative to its Real Estate peer level of, 8.33x implying that relative to its comparable set of companies, 41 can be bought at a cheaper price right now. 41 is also strong in terms of its financial health, as near-term assets sufficiently cover liabilities in the near future as well as in the long run.