Best SGX Undervalued Stocks
Undervalued companies are those that trade at a price lower than their actual values, such as Oxley Holdings and Geo Energy Resources. 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.
Oxley Holdings Limited (SGX:5UX)
Oxley Holdings Limited, an investment holding company, engages in property investment and development, and project management activities in Singapore, the United Kingdom, Ireland, Cambodia, Malaysia, Indonesia, China, Japan, Myanmar, Australia, and Cyprus. Oxley Holdings was established in 2010 and with the stock’s market cap sitting at SGD SGD2.00B, it comes under the mid-cap stocks category.
5UX’s stock is now floating at around -35% lower than its actual value of $0.76, at a price of S$0.49, based on my discounted cash flow model. This mismatch signals an opportunity to buy 5UX shares at a discount. What’s even more appeal is that 5UX’s PE ratio stands at 9.38x relative to its Real Estate peer level of, 10.32x indicating that relative to its competitors, you can purchase 5UX’s stock for a lower price right now. 5UX is also robust in terms of financial health, as short-term assets amply cover upcoming and long-term liabilities. It’s debt-to-equity ratio of 209.16% has been diminishing over the past couple of years indicating its capability to pay down its debt. More on Oxley Holdings here.
Geo Energy Resources Limited (SGX:RE4)
Geo Energy Resources Limited, an investment holding company, engages in mining, producing, and trading coal in Indonesia. Established in 2008, and run by CEO Kum Hon Tung, the company now has 524 employees and with the company’s market cap sitting at SGD SGD305.73M, it falls under the small-cap stocks category.
RE4’s stock is currently hovering at around -77% beneath its value of $0.99, at a price of S$0.23, based on my discounted cash flow model. This discrepancy gives us a chance to invest in RE4 at a discount. In terms of relative valuation, RE4’s PE ratio is around 6.1x compared to its Oil and Gas peer level of, 6.96x indicating that relative to its comparable company group, RE4 can be bought at a cheaper price right now. RE4 is also a financially healthy company, with current assets covering liabilities in the near term and over the long run.
Continue research on Geo Energy Resources here.
GuocoLand Limited (SGX:F17)
GuocoLand Limited, an investment holding company, engages in the development, investment, and management of various properties. GuocoLand was started in 1976 and with the company’s market capitalisation at SGD SGD2.39B, we can put it in the mid-cap stocks category.
F17’s stock is now trading at -71% lower than its actual worth of $7.46, at the market price of S$2.15, based on my discounted cash flow model. This price and value mismatch indicates a potential opportunity to buy the stock at a low price. In terms of relative valuation, F17’s PE ratio is currently around 4.94x relative to its Real Estate peer level of, 10.32x meaning that relative to other stocks in the industry, F17 can be bought at a cheaper price right now. F17 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. Finally, its debt relative to equity is 120.24%, which has been diminishing for the past few years showing its ability to reduce its debt obligations year on year. Interested in GuocoLand? Find out more 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.
