Best Cheap Stocks To Buy

Stocks, such as Multi-Chem, trading at a market price below their true values are considered to be undervalued. There’s a few ways you can value a company. The most popular methods include discounting the company’s cash flows it is expected to create in the future, or comparing its price to its peers or the value of its assets. Analysing the most recent financial data, I’ve created a list of companies that compare favourably in all criteria, making them potentially good investments.

Multi-Chem Limited (SGX:AWZ)

Multi-Chem Limited, an investment holding company, distributes hardware and software related to Internet and network products in Singapore, the People’s Republic of China, and internationally. Formed in 1985, and run by CEO Suan Sai Foo, the company provides employment to 921 people and has a market cap of SGD SGD90.10M, putting it in the small-cap group.

AWZ’s stock is currently floating at around -28% beneath its actual level of $1.4, at a price of S$1.00, based on its expected future cash flows. signalling an opportunity to buy the stock at a low price. Moreover, AWZ’s PE ratio is trading at 8.22x against its its Electronic peer level of, 12.3x suggesting that relative to its comparable company group, we can invest in AWZ at a lower price. AWZ is also a financially robust company, with short-term assets covering liabilities in the near future as well as in the long run. It’s debt-to-equity ratio of 23.62% has been diminishing over the past couple of years signifying AWZ’s ability to pay down its debt. More on Multi-Chem here.

Bumitama Agri Ltd. (SGX:P8Z)

Bumitama Agri Ltd., an investment holding company, produces and trades in crude palm oil (CPO), palm kernel (PK), and related products for refineries in Indonesia. Founded in 1996, and headed by CEO Lim Gunawan, the company size now stands at 12,600 people and with the company’s market cap sitting at SGD SGD1.24B, it falls under the small-cap category.

P8Z’s stock is now hovering at around -53% lower than its real value of IDR1.5, at a price tag of S$0.71, based on my discounted cash flow model. This difference in price and value gives us a chance to buy low. Moreover, P8Z’s PE ratio is trading at 10.93x compared to its Food peer level of, 10.98x meaning that relative to other stocks in the industry, you can purchase P8Z’s stock for a lower price right now. P8Z is also strong financially, as short-term assets amply cover upcoming and long-term liabilities.

Interested in Bumitama Agri? Find out more here.

SingHaiyi Group Ltd. (SGX:5H0)

SingHaiyi Group Ltd., an investment holding company, develops, owns, and manages real estate properties in Singapore, Malaysia, and the United States. SingHaiyi Group was established in 1988 and has a market cap of SGD SGD413.32M, putting it in the small-cap category.

5H0’s stock is currently trading at -92% below its true value of $1.16, at the market price of S$0.096, based on its expected future cash flows. The divergence signals an opportunity to buy 5H0 shares at a low price. Moreover, 5H0’s PE ratio stands at 5.75x compared to its Real Estate peer level of, 9.77x suggesting that relative to its competitors, 5H0’s stock can be bought at a cheaper price. 5H0 is also a financially healthy company, with short-term assets covering liabilities in the near future as well as in the long run. The stock’s debt-to-equity ratio of 28.84% has been dropping over time, signalling its capacity to reduce its debt obligations year on year. More on SingHaiyi Group here.

For more financially sound, undervalued companies to add to your portfolio, explore this interactive list of undervalued stocks.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.