In Search Of Value Engineers In Singapore

ValueThere are 13 Industrial Machinery stocks with a market value of more than S$100m quoted on the Singapore market. The baker’s dozen span smartphone manufacturers to designers for the aerospace and the oil and gas industries.

UMS Holdings (SGX: 558) is a company that looks interesting. Founded in 2001, it focuses on the manufacture of high-precision semiconductors and also offers electromechanical assembly and final-testing services. The company serves a broad range of industries including the semiconductor, electronic, machine tools, aerospace and oil and gas industries.

Since June, UMS has seen its share price fall by more than S$0.20 from a high of S$0.77 – a loss of over 25%. This came off the back of news that Applied Materials (NASDAQ: AMAT), which was the source of around 80% of revenue for UMS, had sold down its stake in the company.

Could this be a time to recall the sage words of Warren Buffett, namely, “Be fearful when others are greedy. Be greedy when others are fearful.” Could that be applicable to UMS Holdings?

A closer look at the company suggests it could still be in good financial health, thanks to steadily rising net income. With cash on its balance sheet, an undemanding PE of 7.4 and a tempting yield of 7.3%, UMS holdings could bear the hallmarks of an interesting value opportunity.

Elsewhere, Sunningdale Tech (SGX: T35) has gained some attention as one of the top performers in the Industrial Machinery sector over the last twelve months in terms of its total return.

Despite the rise, there could still be some residual value. Manufacturing high precision steel moulds and plastic parts, Sunningdale serves the automotive, consumer IT, telecommunications, healthcare and tooling industries.

Sunningdale’s PE is just 8.5, which is below the market average of around 13 times earnings. Perhaps even more encouraging to the intrepid value investor is the fact that its shares are 30% below its book value.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Adam Kuo doesn’t own shares in any companies mentioned.