SGX Stocks Estimated To Be Trading At Up To 40.7% Below Intrinsic Value

As the Singapore market continues to navigate a period of transformation and restructuring, investors are keenly observing opportunities that may arise from companies undergoing significant changes. In this context, identifying undervalued stocks—those trading below their intrinsic value—can offer potential for growth, especially when fundamentals show signs of improvement.

Top 3 Undervalued Stocks Based On Cash Flows In Singapore

Name	Current Price	Fair Value (Est)	Discount (Est)
Singapore Technologies Engineering (SGX:S63)	SGD4.71	SGD7.32	35.7%
Digital Core REIT (SGX:DCRU)	US$0.60	US$0.82	27.1%
Nanofilm Technologies International (SGX:MZH)	SGD0.85	SGD1.43	40.7%
Seatrium (SGX:5E2)	SGD2.04	SGD3.07	33.6%

Click here to see the full list of 4 stocks from our Undervalued SGX Stocks Based On Cash Flows screener.

Let's take a closer look at a couple of our picks from the screened companies.

Seatrium (SGX:5E2)

Overview: Seatrium Limited offers engineering solutions to the offshore, marine, and energy industries with a market cap of SGD6.93 billion.

Operations: The company's revenue segments include Ship Chartering at SGD24.71 million and Rigs & Floaters, Repairs & Upgrades, Offshore Platforms, and Specialised Shipbuilding at SGD8.39 billion.

Estimated Discount To Fair Value: 33.6%

Seatrium is trading at S$2.04, significantly below its estimated fair value of S$3.07, indicating potential undervaluation based on cash flows. The company recently reported a net income of S$35.97 million for the first half of 2024, reversing a previous loss, and completed a share buyback worth S$9.6 million. Despite low forecasted return on equity, Seatrium's revenue is expected to grow faster than the Singapore market average.

• Insights from our recent growth report point to a promising forecast for Seatrium's business outlook.
• Click here to discover the nuances of Seatrium with our detailed financial health report.

Nanofilm Technologies International (SGX:MZH)

Overview: Nanofilm Technologies International Limited, with a market cap of SGD553.42 million, offers nanotechnology solutions across Singapore, China, Japan, and Vietnam.

Operations: The company's revenue is primarily derived from its Advanced Materials segment at SGD153.32 million, followed by Nanofabrication at SGD18.37 million, Industrial Equipment at SGD28.71 million, and Sydrogen contributing SGD1.40 million.

Estimated Discount To Fair Value: 40.7%

Nanofilm Technologies International, trading at SGD 0.85, is valued below its fair value estimate of SGD 1.43, suggesting potential undervaluation based on cash flows. Despite a challenging first half with a net loss of SGD 3.74 million, revenue increased to SGD 82.65 million from the previous year’s SGD 73.15 million. The company anticipates higher second-half earnings and revenue growth above the Singapore market average but faces low forecasted return on equity challenges.

• Our comprehensive growth report raises the possibility that Nanofilm Technologies International is poised for substantial financial growth.
• Dive into the specifics of Nanofilm Technologies International here with our thorough financial health report.

Singapore Technologies Engineering (SGX:S63)

Overview: Singapore Technologies Engineering Ltd is a global technology, defence, and engineering company with a market cap of SGD14.68 billion.

Operations: The company generates revenue through its segments, with Commercial Aerospace contributing SGD4.34 billion, Urban Solutions & Satcom providing SGD2.01 billion, and Defence & Public Security accounting for SGD4.54 billion.

Estimated Discount To Fair Value: 35.7%

Singapore Technologies Engineering, priced at SGD 4.71, trades below its fair value estimate of SGD 7.32, indicating it may be undervalued based on cash flows. Despite a less robust coverage of debt by operating cash flow, earnings grew by 19.9% last year and are forecasted to grow faster than the Singapore market at 11.3% annually. A strategic alliance with Toshiba Digital Solutions aims to enhance quantum security solutions across key sectors in Southeast Asia, potentially boosting future revenue streams.

• Upon reviewing our latest growth report, Singapore Technologies Engineering's projected financial performance appears quite optimistic.
• Click to explore a detailed breakdown of our findings in Singapore Technologies Engineering's balance sheet health report.

Key Takeaways

• Embark on your investment journey to our 4 Undervalued SGX Stocks Based On Cash Flows selection here.
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Contemplating Other Strategies?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
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• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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