Yahoo Finance Best Cheap Stocks To Buy
Hour Glass and Hi-P International are stocks on my list that are potentially undervalued. This means their current share prices are trading well-below what the companies are actually worth. There’s a few ways you can determine how much a company is actually worth. The most popular methods include discounting the company’s cash flows it is expected to create in the future, or comparing its price to its peers or the value of its assets. The discrepancy between the price and value means investors have an opportunity to buy shares at a discount. Below are the stocks I believe are undervalued on all criteria, based on their 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 company’s market cap sitting at SGD SGD454.73M, it falls under the small-cap stocks category.
AGS’s stock is now floating at around -54% below its true level of $1.41, at the market price of S$0.65, based on its expected future cash flows. The divergence signals an opportunity to buy AGS shares at a low price. Additionally, AGS’s PE ratio is currently around 9.13x relative to its Specialty Retail peer level of, 10.8x meaning that relative to its peers, 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 9.56%, which has been dropping for the last couple of years signalling its capability to reduce its debt obligations year on year. More detail on Hour Glass here.
Hi-P International Limited (SGX:H17)
Hi-P International Limited operates as an integrated contract manufacturer serving the telecommunications, consumer electronics, computing and peripherals, lifestyle, and medical and industrial devices industries. The company was established in 1980 and with the company’s market capitalisation at SGD SGD1.01B, we can put it in the small-cap category.
H17’s stock is now trading at -41% lower than its intrinsic value of $2.15, at the market price of S$1.26, based on my discounted cash flow model. This mismatch indicates a potential opportunity to buy low. What’s even more appeal is that H17’s PE ratio is trading at 8.25x against its its Electronic peer level of, 9.06x indicating that relative to its peers, we can buy H17’s stock at a cheaper price today. H17 is also a financially healthy company, with current assets covering liabilities in the near term and over the long run.
More detail on Hi-P International here.
UOL Group Limited (SGX:U14)
UOL Group Limited, through its subsidiaries, primarily engages in property development and management, property investments, and hotel businesses. Started in 1963, and run by CEO Lian Gwee, the company now has 2,000 employees and with the stock’s market cap sitting at SGD SGD6.67B, it comes under the mid-cap group.
U14’s shares are currently floating at around -65% under its intrinsic level of $22.43, at the market price of S$7.92, based on my discounted cash flow model. This mismatch signals an opportunity to buy U14 shares at a discount. Also, U14’s PE ratio is trading at 7.42x while its Real Estate peer level trades at, 9.73x indicating that relative to other stocks in the industry, U14’s stock can be bought at a cheaper price. U14 also has a healthy balance sheet, with current assets covering liabilities in the near term and over the long run. The stock’s debt-to-equity ratio of 26.67% has been diminishing over the past couple of years signalling its ability to pay down its debt. More detail on UOL Group 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.
