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Companies, such as Intraco, are deemed to be undervalued because their shares are currently trading below their true 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.
Intraco Limited (SGX:I06)
Intraco Limited operates as an investment management company, Singapore, rest of ASEAN, and Greater China. Intraco was started in 1968 and with the company’s market capitalisation at SGD SGD29.56M, we can put it in the small-cap category.
I06’s stock is now floating at around -46% lower than its actual level of $0.53, at the market price of S$0.28, based on my discounted cash flow model. signalling an opportunity to buy the stock at a low price. In terms of relative valuation, I06’s PE ratio is trading at 14.23x against its its Trade Distributors peer level of, 22.11x suggesting that relative to its competitors, I06’s stock can be bought at a cheaper price. I06 is also strong in terms of its financial health, with near-term assets able to cover upcoming and long-term liabilities. The stock’s debt-to-equity ratio of 15.53% has been dropping for the last couple of years indicating its capacity to reduce its debt obligations year on year. Continue research on Intraco here.
Combine Will International Holdings Limited (SGX:N0Z)
Combine Will International Holdings Limited, an investment holding company, operates as an original design manufacturer (ODM)/original equipment manufacturer (OEM) of corporate premiums, toys, and consumer products. Started in 1992, and now run by Jo Tak Tam, the company size now stands at 10,000 people and with the market cap of SGD SGD28.45M, it falls under the small-cap group.
N0Z’s stock is currently floating at around -80% below its true level of $4.31, at a price of S$0.88, based on its expected future cash flows. This price and value mismatch indicates a potential opportunity to buy the stock at a low price. What’s even more appeal is that N0Z’s PE ratio is around 15.95x relative to its Leisure peer level of, 23.25x meaning that relative to its comparable set of companies, we can invest in N0Z at a lower price. N0Z is also strong financially, as current assets can cover liabilities in the near term and over the long run. It’s debt-to-equity ratio of 35.93% has been falling for the past few years showing N0Z’s capacity to pay down its debt. More detail on Combine Will International Holdings here.