SGX Stocks That May Be Undervalued In August 2024

The Singapore market has been experiencing a wave of investments, particularly in the fintech sector, reflecting growing confidence in the region's economic potential. In this context, identifying undervalued stocks can be crucial for investors looking to capitalize on opportunities that may not yet be fully recognized by the broader market.

Top 5 Undervalued Stocks Based On Cash Flows In Singapore

Name	Current Price	Fair Value (Est)	Discount (Est)
Singapore Technologies Engineering (SGX:S63)	SGD4.48	SGD8.95	50%
LHN (SGX:41O)	SGD0.34	SGD0.41	17.2%
Winking Studios (Catalist:WKS)	SGD0.29	SGD0.55	47.1%
Digital Core REIT (SGX:DCRU)	US$0.615	US$0.85	27.5%
Seatrium (SGX:5E2)	SGD1.51	SGD2.86	47.2%

Click here to see the full list of 5 stocks from our Undervalued SGX Stocks Based On Cash Flows screener.

Let's explore several standout options from the results in the screener.

Seatrium (SGX:5E2)

Overview: Seatrium Limited offers engineering solutions to the offshore, marine, and energy industries and has a market cap of SGD5.14 billion.

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

Estimated Discount To Fair Value: 47.2%

Seatrium is trading at S$1.51, significantly below its estimated fair value of S$2.86, suggesting it may be undervalued based on cash flows. The company has reported a turnaround with sales reaching S$4.01 billion and net income of S$35.97 million for H1 2024, compared to a net loss last year. Despite an ongoing investigation by the Monetary Authority of Singapore, Seatrium's robust project pipeline and successful rig deliveries highlight operational strength and potential future profitability.

• Insights from our recent growth report point to a promising forecast for Seatrium's business outlook.
• Navigate through the intricacies of Seatrium with our comprehensive financial health report here.

Digital Core REIT (SGX:DCRU)

Overview: Digital Core REIT (SGX: DCRU) is a leading pure-play data centre REIT listed in Singapore, sponsored by Digital Realty, with a market cap of $799.77 million.

Operations: Revenue for Digital Core REIT primarily comes from its commercial real estate segment, amounting to $70.76 million.

Estimated Discount To Fair Value: 27.5%

Digital Core REIT is trading at US$0.62, significantly below its estimated fair value of US$0.85, indicating it may be undervalued based on cash flows. Despite a decline in revenue to US$48.26 million for H1 2024 from US$53.39 million a year ago, net income surged to US$18.63 million from US$9.07 million. However, shareholders experienced dilution over the past year and the dividend track record remains unstable with recent decreases announced for H1 2024 distributions.

• According our earnings growth report, there's an indication that Digital Core REIT might be ready to expand.
• Dive into the specifics of Digital Core REIT here with our thorough financial health report.

Singapore Technologies Engineering (SGX:S63)

Overview: Singapore Technologies Engineering Ltd operates as a global technology, defence, and engineering company with a market cap of SGD13.97 billion.

Operations: The company's revenue segments include Commercial Aerospace (SGD4.34 billion), Urban Solutions & Satcom (SGD2.01 billion), and Defence & Public Security (SGD4.54 billion).

Estimated Discount To Fair Value: 50%

Singapore Technologies Engineering is trading at SGD4.48, significantly below its estimated fair value of SGD8.95, suggesting it is undervalued based on cash flows. The company's earnings grew by 19.9% over the past year and are forecast to grow 11.05% annually, outpacing the Singapore market's average growth rate of 10.3%. However, debt coverage by operating cash flow remains a concern and its dividend track record has been unstable despite recent affirmations of payouts for Q2 2024.

• Our earnings growth report unveils the potential for significant increases in Singapore Technologies Engineering's future results.
• Click here and access our complete balance sheet health report to understand the dynamics of Singapore Technologies Engineering.

Next Steps

• Explore the 5 names from our Undervalued SGX Stocks Based On Cash Flows screener here.
• Have a stake in these businesses? Integrate your holdings into Simply Wall St's portfolio for notifications and detailed stock reports.
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Ready For A Different Approach?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
• Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence.
• 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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