Companies, such as Golden Energy and Resources, trading at a market price below their true values are considered to be undervalued. Smart investors can make money from this discrepancy by buying these shares, because they believe the current market prices will eventually move towards their true value. If you’re looking for capital gains in your next investment, I suggest you take a look at my list of potentially undervalued stocks.
Golden Energy and Resources Limited (SGX:AUE)
Golden Energy and Resources Limited, an investment holding company, engages in the exploration, mining, marketing, and trading of thermal coal. The company employs 380 people and with the stock’s market cap sitting at SGD SGD847.12M, it comes under the small-cap group.
AUE’s shares are now floating at around -82% below its actual level of $2.02, at a price of S$0.36, based on its expected future cash flows. This mismatch indicates a chance to invest in AUE at a discounted price. Also, AUE’s PE ratio is trading at around 8.88x relative to its Oil and Gas peer level of, 10.44x implying that relative to other stocks in the industry, you can buy AUE’s shares at a cheaper price. AUE is also strong in terms of its financial health, with short-term assets covering liabilities in the near future as well as in the long run.
Continue research on Golden Energy and Resources here.
Yanlord Land Group Limited (SGX:Z25)
Yanlord Land Group Limited, an investment holding company, engages in the property development activities in the People’s Republic of China. Yanlord Land Group was started in 1993 and with the stock’s market cap sitting at SGD SGD3.26B, it comes under the mid-cap stocks category.
Z25’s shares are now floating at around -93% lower than its value of ¥22.64, at a price tag of S$1.69, based on its expected future cash flows. This mismatch signals an opportunity to buy Z25 shares at a discount. Also, Z25’s PE ratio stands at 5.06x while its Real Estate peer level trades at, 9.54x indicating that relative to its competitors, Z25’s shares can be purchased for a lower price. Z25 also has a healthy balance sheet, with short-term assets covering liabilities in the near future as well as in the long run.
Interested in Yanlord Land Group? Find out more here.
CITIC Envirotech Ltd. (SGX:CEE)
CITIC Envirotech Ltd. provides water and wastewater treatment, water supply, and recycling services in the People’s Republic of China, Singapore, the United States, and Malaysia. Established in 1996, and headed by CEO Weibao Hao, the company employs 1,740 people and has a market cap of SGD SGD1.41B, putting it in the small-cap group.
CEE’s stock is currently floating at around -85% lower than its value of $4.05, at a price tag of S$0.59, based on my discounted cash flow model. The divergence signals an opportunity to buy CEE shares at a low price. Also, CEE’s PE ratio stands at around 9.75x while its Commercial Services peer level trades at, 11.39x suggesting that relative to other stocks in the industry, we can purchase CEE’s shares for cheaper. CEE is also in good financial health, as near-term assets sufficiently cover liabilities in the near future as well as in the long run. The stock’s debt-to-equity ratio of 39.36% has been dropping over the past couple of years signalling its capability to pay down its debt. Interested in CITIC Envirotech? Find out more 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.