Undervalued companies, such as Hour Glass and UOL Group, trade at a price less than their true values. Investors can benefit from buying these companies while they are discounted, because they gain when the market prices move towards the stocks’ true values. Below is a list of stocks I’ve compiled that are deemed undervalued based on the latest financial data.
The Hour Glass Limited (SGX:AGS)
The Hour Glass Limited, an investment holding company, retails and distributes watches, jewelry, and other luxury products in South East Asia, Australia, and North East Asia. Hour Glass was formed in 1979 and with the market cap of SGD SGD465.31M, it falls under the small-cap category.
AGS’s shares are now trading at -55% lower than its value of $1.47, at the market price of S$0.66, based on its expected future cash flows. This discrepancy gives us a chance to invest in AGS at a discount. Additionally, AGS’s PE ratio is currently around 9.19x while its Specialty Retail peer level trades at, 10.22x implying that relative to other stocks in the industry, you can buy AGS’s shares at a cheaper price. AGS is also strong financially, with current assets covering liabilities in the near term and over the long run. Finally, its debt relative to equity is 10.26%, which has been declining for the past few years signalling AGS’s ability to pay down its debt. Continue research on Hour Glass here.
UOL Group Limited (SGX:U14)
UOL Group Limited, through its subsidiaries, primarily engages in property development and management, property investments, and hotel businesses. Formed in 1963, and currently lead by Lian Gwee, the company provides employment to 2,000 people and has a market cap of SGD SGD7.25B, putting it in the mid-cap group.
U14’s stock is currently trading at -59% lower than its actual value of $21.18, at a price of S$8.61, according to my discounted cash flow model. This price and value mismatch indicates a potential opportunity to buy the stock at a low price. Furthermore, U14’s PE ratio stands at around 7.91x compared to its Real Estate peer level of, 10.43x implying that relative to its peers, we can invest in U14 at a lower price. U14 is also a financially robust company, with short-term assets covering liabilities in the near future as well as in the long run. Finally, its debt relative to equity is 26.67%, which has been diminishing for the past few years revealing its capacity to pay down its debt. More on UOL Group here.
HL Global Enterprises Limited (SGX:AVX)
HL Global Enterprises Limited, an investment holding company, operates in the hospitality operations and property development activities in Malaysia and the People’s Republic of China. HL Global Enterprises was founded in 1961 and has a market cap of SGD SGD42.26M, putting it in the small-cap stocks category.
AVX’s stock is currently hovering at around -55% lower than its real value of $1.01, at the market price of S$0.45, according to my discounted cash flow model. signalling an opportunity to buy the stock at a low price. What’s even more appeal is that AVX’s PE ratio stands at 0.49x while its Hospitality peer level trades at, 24.57x meaning that relative to its peers, AVX’s shares can be purchased for a lower price. AVX is also in great financial shape, as short-term assets amply cover upcoming and long-term liabilities. Finally, its debt relative to equity is 2.26%, which has been falling over the past couple of years demonstrating its capability to reduce its debt obligations year on year. Continue research on HL Global Enterprises 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.