The Singapore market has been navigating a period of volatility, with recent performance reflecting mixed results across various indices. In such an environment, identifying stocks that may be trading below their estimated value can present compelling opportunities for investors seeking potential growth.

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.

Let's review some notable picks from our screened stocks.

Seatrium (SGX:5E2)

Overview: Seatrium Limited offers engineering solutions to the offshore, marine, and energy industries and has a market cap of SGD5.71 billion.

Operations: The company's revenue primarily comes from Rigs & Floaters, Repairs & Upgrades, Offshore Platforms, and Specialised Shipbuilding (SGD8.39 billion), with additional income from Ship Chartering (SGD24.71 million).

Estimated Discount To Fair Value: 42.8%

Seatrium Limited, trading at S$1.68, is significantly undervalued based on discounted cash flow analysis, with an estimated fair value of S$2.93. The company has demonstrated strong revenue growth (7.1% per year) and is forecast to become profitable within three years. Recent successful project completions and a share buyback program further bolster its financial health, with H1 2024 earnings showing a net income of S$35.97 million compared to a net loss last year.

• According our earnings growth report, there's an indication that Seatrium might be ready to expand.
• Click here and access our complete balance sheet health report to understand the dynamics of Seatrium.

Frasers Logistics & Commercial Trust (SGX:BUOU)

Overview: Frasers Logistics & Commercial Trust (FLCT) is a Singapore-listed real estate investment trust with a portfolio of 107 industrial and commercial properties valued at approximately S$6.4 billion, diversified across Australia, Germany, Singapore, the United Kingdom and the Netherlands, with a market cap of S$4.36 billion.

Operations: FLCT generates revenue from 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: 26.9%

Frasers Logistics & Commercial Trust, trading at S$1.16, is undervalued by over 20% based on discounted cash flow analysis with a fair value estimate of S$1.59. While its return on equity is forecast to be low at 5.8% in three years, the trust is expected to achieve above-average market profit growth and earnings are projected to grow 39.43% annually. However, its debt coverage by operating cash flow remains a concern alongside an unstable dividend track record.

• Upon reviewing our latest growth report, Frasers Logistics & Commercial Trust's projected financial performance appears quite optimistic.
• 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 operates as a global technology, defence, and engineering company with a market cap of SGD14.62 billion.

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

Estimated Discount To Fair Value: 36.2%

Singapore Technologies Engineering (ST Engineering) is trading at S$4.69, significantly below its estimated fair value of S$7.36 based on discounted cash flow analysis, indicating it is undervalued by over 20%. Recent strategic alliances with Toshiba Digital Solutions and SpeQtral enhance its market position in quantum-secure communications. Despite concerns about debt coverage by operating cash flow, ST Engineering's earnings grew 19.9% last year and are forecast to grow faster than the Singapore market at 11.2% annually.

• Our growth report here indicates Singapore Technologies Engineering may be poised for an improving outlook.
• Delve into the full analysis health report here for a deeper understanding of Singapore Technologies Engineering.

Next Steps

• Click this link to deep-dive into the 5 companies within our Undervalued SGX Stocks Based On Cash Flows screener.
• Are you invested in these stocks already? Keep abreast of every twist and turn by setting up a portfolio with Simply Wall St, where we make it simple for investors like you to stay informed and proactive.
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Want To Explore Some Alternatives?

• 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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