SGX Stocks Trading Below Estimated Value In October 2024

In recent months, the Singapore market has experienced fluctuations, with investors closely monitoring economic indicators and regional developments impacting the Straits Times Index. In this environment, identifying undervalued stocks can provide opportunities for investors seeking to capitalize on discrepancies between current market prices and intrinsic values.

Top 5 Undervalued Stocks Based On Cash Flows In Singapore

Name	Current Price	Fair Value (Est)	Discount (Est)
Singapore Technologies Engineering (SGX:S63)	SGD4.71	SGD7.34	35.8%
Digital Core REIT (SGX:DCRU)	US$0.595	US$0.82	27.8%
Frasers Logistics & Commercial Trust (SGX:BUOU)	SGD1.11	SGD1.99	44.2%
Nanofilm Technologies International (SGX:MZH)	SGD0.835	SGD1.43	41.6%
Seatrium (SGX:5E2)	SGD1.95	SGD3.03	35.7%

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.

Digital Core REIT (SGX:DCRU)

Overview: Digital Core REIT (SGX: DCRU) is a leading pure-play data centre REIT in Singapore, sponsored by Digital Realty, with a market cap of approximately $772.40 million.

Operations: The company's revenue is primarily derived from its commercial REIT segment, amounting to $70.76 million.

Estimated Discount To Fair Value: 27.8%

Digital Core REIT is trading at US$0.60, significantly below its estimated fair value of US$0.82, suggesting it may be undervalued based on cash flows. Despite a decrease in revenue to US$48.26 million for the half year ending June 2024, net income rose to US$18.63 million from the previous year, indicating improved profitability. However, shareholders experienced dilution over the past year and dividends have been unstable, posing potential risks for investors seeking consistent returns.

• Our comprehensive growth report raises the possibility that Digital Core REIT is poised for substantial financial growth.
• Click to explore a detailed breakdown of our findings in Digital Core REIT's balance sheet health report.

Nanofilm Technologies International (SGX:MZH)

Overview: Nanofilm Technologies International Limited, with a market cap of SGD543.65 million, offers nanotechnology solutions across Singapore, China, Japan, and Vietnam.

Operations: The company's revenue is primarily derived from Advanced Materials 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: 41.6%

Nanofilm Technologies International is trading at SGD 0.84, below its estimated fair value of SGD 1.43, reflecting potential undervaluation based on cash flows. Despite a net loss reduction to SGD 3.74 million for the first half of 2024 and an interim dividend declaration, profit margins have declined from last year. The company forecasts significant earnings growth and expects revenue to grow faster than the Singapore market, although profitability remains a concern with lower expected returns on equity.

• Our expertly prepared growth report on Nanofilm Technologies International implies its future financial outlook may be stronger than recent results.
• Delve into the full analysis health report here for a deeper understanding of Nanofilm Technologies International.

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's revenue is derived from three primary segments: Commercial Aerospace (SGD4.34 billion), Urban Solutions & Satcom (SGD2.01 billion), and Defence & Public Security (SGD4.54 billion).

Estimated Discount To Fair Value: 35.8%

Singapore Technologies Engineering is trading at SGD 4.71, significantly below its estimated fair value of SGD 7.34, suggesting undervaluation based on cash flows. The company's earnings are projected to grow faster than the Singapore market at 11.3% per year, although revenue growth is slower at 6.4%. Despite a strong strategic alliance for quantum-secure communications and improved recent earnings, concerns remain over debt coverage by operating cash flow and an unstable dividend track record.

• Our growth report here indicates Singapore Technologies Engineering may be poised for an improving outlook.
• Click here and access our complete balance sheet health report to understand the dynamics of Singapore Technologies Engineering.

Where To Now?

• Take a closer look at our Undervalued SGX Stocks Based On Cash Flows list of 5 companies by clicking here.
• Have you diversified into these companies? Leverage the power of Simply Wall St's portfolio to keep a close eye on market movements affecting your investments.
• Invest smarter with the free Simply Wall St app providing detailed insights into every stock market around the globe.

Curious About Other Options?

• 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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