JB Foods and Indofood Agri Resources are two of the consumer staple stocks I have identified as undervalued. This means their current share prices are trading at levels less than what the companies are actually worth. Investors can determine how much a company is worth based on how much money they are expected to make in the future, or compared to the value of their peers. The list I’ve put together below are of stocks that compare favourably on all criteria, which potentially makes them good investments if you believe the price should eventually reflect the stock’s actual value.
JB Foods Limited (SGX:BEW)
JB Foods Limited, an investment holding company, produces and sells cocoa ingredient products. Established in 2012, and headed by CEO How Tey, the company provides employment to 526 people and with the company’s market cap sitting at SGD SGD166.76M, it falls under the small-cap group.
BEW’s shares are now trading at -70% below its true value of $1.81, at a price tag of S$0.55, based on its expected future cash flows. This mismatch indicates a potential opportunity to buy low. Also, BEW’s PE ratio is trading at around 6.55x relative to its Food peer level of, 13.42x implying that relative to its peers, we can invest in BEW at a lower price. BEW is also robust in terms of financial health, as short-term assets amply cover upcoming and long-term liabilities.
Continue research on JB Foods here.
Indofood Agri Resources Ltd. (SGX:5JS)
Indofood Agri Resources Ltd. operates as a vertically integrated agribusiness company. Established in 2001, and currently lead by Mark Wakeford, the company now has 39,652 employees and has a market cap of SGD SGD418.77M, putting it in the small-cap group.
5JS’s shares are now trading at -21% under its intrinsic level of IDR0.38, at a price of S$0.30, based on its expected future cash flows. This mismatch signals an opportunity to buy 5JS shares at a discount. What’s even more appeal is that 5JS’s PE ratio is around 13.42x relative to its index peer level of, 13.53x meaning that relative to other stocks in the industry, 5JS’s shares can be purchased for a lower price. 5JS is also a financially healthy company, as current assets can cover liabilities in the near term and over the long run.
Dig deeper into Indofood Agri Resources here.
Best World International Limited (SGX:CGN)
Best World International Limited develops, manufactures, and distributes skincare, personal care, nutritional, and wellness products. Best World International was formed in 1990 and with the stock’s market cap sitting at SGD SGD709.91M, it comes under the small-cap category.
CGN’s shares are now trading at -46% beneath its actual value of $2.38, at a price of S$1.29, based on my discounted cash flow model. The difference between value and price signals a potential opportunity to buy CGN shares at a discount. What’s even more appeal is that CGN’s PE ratio is trading at around 13.73x compared to its Personal Products peer level of, 24.95x implying that relative to its comparable set of companies, we can invest in CGN at a lower price. CGN is also in good financial health, with near-term assets able to cover upcoming and long-term liabilities.
Dig deeper into Best World International 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.