The Singapore stock market has been experiencing a period of cautious optimism, with investors closely monitoring economic indicators and corporate earnings reports. Amid this environment, identifying undervalued stocks can offer significant opportunities for growth and value investing. In this article, we will explore three stocks on the Singapore Exchange (SGX) that are estimated to be trading below their fair value as of September 2024.

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 SGD5.68 billion.

Operations: The company's revenue segments include Ship Chartering at SGD24.71 million and Rigs & Floaters, Repairs & Upgrades, Offshore Platforms, and Specialised Shipbuilding at SGD8.39 billion.

Estimated Discount To Fair Value: 43.2%

Seatrium Limited, trading at SGD1.67, is significantly undervalued against its estimated fair value of SGD2.94 based on discounted cash flow analysis. The company has demonstrated strong project execution capabilities, recently delivering a jackup rig ahead of schedule. Analysts forecast earnings to grow by 75.55% annually and expect the company to become profitable within three years, with revenue growth outpacing the Singapore market average. Recent buybacks and improved earnings further support its undervaluation thesis.

• According our earnings growth report, there's an indication that Seatrium might be ready to expand.
• Unlock comprehensive insights into our analysis of Seatrium stock in this financial health report.

Frasers Logistics & Commercial Trust (SGX:BUOU)

Overview: Frasers Logistics & Commercial Trust (SGX:BUOU) is a Singapore-listed real estate investment trust with a market cap of S$4.40 billion, managing a diversified portfolio of 107 industrial and commercial properties valued at approximately S$6.40 billion across Australia, Germany, Singapore, the United Kingdom and the Netherlands.

Operations: The trust generates revenue from its diversified portfolio of 107 industrial and commercial properties valued at approximately S$6.40 billion, spanning Australia, Germany, Singapore, the United Kingdom, and the Netherlands.

Estimated Discount To Fair Value: 26.4%

Frasers Logistics & Commercial Trust, trading at S$1.17, is 26.4% below its estimated fair value of S$1.59 based on discounted cash flow analysis. Earnings are forecast to grow 39.43% annually, with revenue growth projected at 6.3% per year, surpassing the Singapore market average of 3.6%. However, the company has an unstable dividend track record and debt not well covered by operating cash flow, which may pose risks despite its undervaluation.

• Our growth report here indicates Frasers Logistics & Commercial Trust may be poised for an improving outlook.
• Click here to discover the nuances of Frasers Logistics & Commercial Trust with our detailed financial health report.

Singapore Technologies Engineering (SGX:S63)

Overview: Singapore Technologies Engineering Ltd operates as a global technology, defence, and engineering company with a market cap of SGD14.40 billion.

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

Estimated Discount To Fair Value: 37.1%

Singapore Technologies Engineering, trading at S$4.62, is 37.1% below its estimated fair value of S$7.35 based on discounted cash flow analysis. Earnings grew by 19.9% last year and are forecast to grow 11.15% annually, outpacing the Singapore market average of 9.9%. Recent strategic alliances in quantum-secure communications could bolster future revenue streams, although debt coverage by operating cash flow remains a concern for potential investors.

• Upon reviewing our latest growth report, Singapore Technologies Engineering's projected financial performance appears quite optimistic.
• Click here and access our complete balance sheet health report to understand the dynamics of Singapore Technologies Engineering.

Seize The Opportunity

• Reveal the 5 hidden gems among our Undervalued SGX Stocks Based On Cash Flows screener with a single click here.
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Ready To Venture Into Other Investment Styles?

• 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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