Smart-Core Holdings, SIM Technology Group, and SinoMedia Holding are technology companies which share a common feature – they’re also great dividend stocks. The tech sector is known to be highly volatile and cyclical since firms face high competition, constant disruption and generally relies on consumer discretionary income. Smart-Core Holdings and SIM Technology Group are tech companies that are currently trading below what they’re actually worth. Investors can profit from the difference by investing in these cyclical stocks as the current market prices should eventually move towards their true values. If capital gains are what you’re after in your next investment, I’ve put together a list of undervalued stocks you may be interested in, based on the latest financial data from each company.
Smart-Core Holdings Limited (SEHK:2166)
Smart-Core Holdings Limited, an investment holding company, engages in the trading of integrated circuits and other electronic components to Blue-chip, and small and medium enterprise customers in the People’s Republic of China and Hong Kong. Formed in 2005, and now run by Weidong Tian, the company size now stands at 299 people and has a market cap of HKD HK$790.00M, putting it in the small-cap stocks category.
2166’s stock is currently trading at -89% lower than its intrinsic value of $13.81, at a price tag of HK$1.58, according to my discounted cash flow model. This discrepancy gives us a chance to invest in 2166 at a discount. Moreover, 2166’s PE ratio stands at 10.12x compared to its Electronic peer level of, 10.26x meaning that relative to its comparable set of companies, 2166’s shares can be purchased for a lower price. 2166 is also strong financially, as current assets can cover liabilities in the near term and over the long run. 2166 also has a miniscule amount of debt on its balance sheet, which gives it headroom to grow and financial flexibility. More detail on Smart-Core Holdings here.
SIM Technology Group Limited (SEHK:2000)
SIM Technology Group Limited, an investment holding company, designs, develops, manufactures, and sells handsets, solutions and intelligent terminals, and wireless communication modules in the People’s Republic of China. Formed in 1986, and currently lead by Jun Liu, the company employs 2,540 people and with the market cap of HKD HK$921.44M, it falls under the small-cap group.
2000’s stock is now floating at around -82% less than its intrinsic level of $2.03, at the market price of HK$0.36, based on its expected future cash flows. The divergence signals an opportunity to buy 2000 shares at a low price. Additionally, 2000’s PE ratio is currently around 8.25x while its Communications peer level trades at, 15.89x indicating that relative to its comparable set of companies, we can buy 2000’s stock at a cheaper price today. 2000 is also strong in terms of its financial health, with short-term assets covering liabilities in the near future as well as in the long run. Dig deeper into SIM Technology Group here.
SinoMedia Holding Limited (SEHK:623)
SinoMedia Holding Limited, an investment holding company, provides television (TV) advertisement, creative content production, and digital marketing services for advertisers and advertising agents in China and internationally. Founded in 1999, and now run by Jinlan Liu, the company now has 436 employees and with the stock’s market cap sitting at HKD HK$988.52M, it comes under the small-cap category.
623’s shares are currently floating at around -58% lower than its true level of ¥4.63, at a price tag of HK$1.96, based on my discounted cash flow model. This discrepancy signals a potential opportunity to buy 623 shares at a low price. Additionally, 623’s PE ratio is trading at 8.91x while its Media peer level trades at, 15.45x implying that relative to its peers, you can buy 623 for a cheaper price. 623 is also in good financial health, with current assets covering liabilities in the near term and over the long run. 623 also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility. Dig deeper into SinoMedia Holding here.
For more financially sound, undervalued companies to add to your portfolio, explore this interactive list of undervalued stocks.