As of October 2024, the Singapore market has been navigating a period of cautious optimism, with investors closely monitoring economic indicators and global events that could influence the performance of local indices. In this context, identifying stocks that may be priced below their fair value can be particularly appealing to investors looking for opportunities amidst prevailing market conditions.

Top 5 Undervalued Stocks Based On Cash Flows In Singapore

Click here to see the full list of 5 stocks from our Undervalued SGX Stocks Based On Cash Flows screener.

Underneath we present a selection of stocks filtered out by our screen.

Seatrium (SGX:5E2)

Overview: Seatrium Limited offers engineering solutions to the offshore, marine, and energy industries with a market cap of SGD6.01 billion.

Operations: The company generates revenue primarily from its Rigs & Floaters, Repairs & Upgrades, Offshore Platforms, and Specialised Shipbuilding segment with SGD8.39 billion, supplemented by SGD24.71 million from Ship Chartering.

Estimated Discount To Fair Value: 40.4%

Seatrium is trading at 40.4% below its estimated fair value of SGD2.97, suggesting potential undervaluation based on cash flows. The company reported a significant turnaround with a net income of SGD35.97 million for H1 2024, compared to a loss the previous year, and earnings are forecast to grow significantly over the next three years. Recent successful project completions and share buybacks further underscore Seatrium's operational efficiency and financial health.

• Insights from our recent growth report point to a promising forecast for Seatrium's business outlook.
• Delve into the full analysis health report here for a deeper understanding of Seatrium.

Frasers Logistics & Commercial Trust (SGX:BUOU)

Overview: Frasers Logistics & Commercial Trust (SGX:BUOU) is a Singapore-listed real estate investment trust that manages a portfolio of 107 industrial and commercial properties valued at approximately S$6.4 billion, spread across Australia, Germany, Singapore, the United Kingdom, and the Netherlands, with a market capitalization of about S$4.40 billion.

Operations: Frasers Logistics & Commercial Trust generates revenue through its diversified portfolio of 107 industrial and commercial properties valued at approximately S$6.4 billion, located in Australia, Germany, Singapore, the United Kingdom, and the Netherlands.

Estimated Discount To Fair Value: 26.8%

Frasers Logistics & Commercial Trust is trading at S$1.17, below its estimated fair value of S$1.6, indicating potential undervaluation based on cash flows. While forecasted revenue growth of 6.4% per year surpasses the Singapore market average, its operating cash flow does not adequately cover debt, posing a financial risk. The trust's earnings are expected to grow significantly over the next three years; however, dividend sustainability remains uncertain due to an unstable track record.

• Our earnings growth report unveils the potential for significant increases in Frasers Logistics & Commercial Trust's future results.
• Take a closer look at Frasers Logistics & Commercial Trust's balance sheet health here in our report.

Singapore Technologies Engineering (SGX:S63)

Overview: Singapore Technologies Engineering Ltd is a global technology, defence, and engineering company with a market cap of SGD14.53 billion.

Operations: The company's revenue segments consist of Commercial Aerospace at SGD4.34 billion, Urban Solutions & Satcom at SGD2.01 billion, and Defence & Public Security at SGD4.54 billion.

Estimated Discount To Fair Value: 36.3%

Singapore Technologies Engineering is trading at S$4.66, significantly below its estimated fair value of S$7.31, highlighting potential undervaluation based on cash flows. Revenue growth is forecasted at 6.4% annually, outpacing the Singapore market average of 3.6%. However, its operating cash flow does not adequately cover debt, posing a financial concern. Recent strategic alliances in quantum security could enhance future growth prospects despite an unstable dividend track record and moderate earnings growth expectations of 11.28% per year.

• The analysis detailed in our Singapore Technologies Engineering growth report hints at robust future financial performance.
• Click here and access our complete balance sheet health report to understand the dynamics of Singapore Technologies Engineering.

Make It Happen

• Access the full spectrum of 5 Undervalued SGX Stocks Based On Cash Flows by clicking on this link.
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Contemplating Other Strategies?

• 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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