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Companies with shares trading at a market price below what they are actually worth, such as Sino Grandness Food Industry Group and Goodland Group, are deemed undervalued. 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.
Sino Grandness Food Industry Group Limited (SGX:T4B)
Sino Grandness Food Industry Group Limited, an investment holding company, produces and sells canned vegetables and fruits in the People’s Republic of China, Europe, North America, and internationally. Sino Grandness Food Industry Group was formed in 1997 and has a market cap of SGD SGD239.96M, putting it in the small-cap category.
T4B’s stock is now trading at -85% lower than its intrinsic level of ¥1.58, at a price tag of S$0.24, based on its expected future cash flows. The difference between value and price signals a potential opportunity to buy T4B shares at a discount. What’s even more appeal is that T4B’s PE ratio is trading at 3.42x relative to its Food peer level of, 15.52x meaning that relative to other stocks in the industry, T4B can be bought at a cheaper price right now. T4B is also robust in terms of financial health, with near-term assets able to cover upcoming and long-term liabilities. The stock’s debt-to-equity ratio of 34.99% has been dropping for the past few years signalling its capability to pay down its debt. Dig deeper into Sino Grandness Food Industry Group here.
Goodland Group Limited (SGX:5PC)
Goodland Group Limited, an investment holding company, engages in real estate development activities in Singapore and Malaysia. The company was established in 1993 and with the company’s market cap sitting at SGD SGD100.99M, it falls under the small-cap stocks category.
5PC’s shares are now floating at around -93% lower than its actual level of $3.94, at a price tag of S$0.28, based on its expected future cash flows. This discrepancy signals a potential opportunity to buy 5PC shares at a low price. What’s even more appeal is that 5PC’s PE ratio is currently around 5.84x against its its Real Estate peer level of, 9.91x implying that relative to its comparable company group, 5PC can be bought at a cheaper price right now. 5PC is also robust in terms of financial health, with current assets covering liabilities in the near term and over the long run. It’s debt-to-equity ratio of 20.75% has been declining over time, showing its ability to reduce its debt obligations year on year. More on Goodland Group here.