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Sarine Technologies Ltd Stock Is Near A 52-Week Low Now: Is It Cheap?

Sarine Technologies Ltd (SGX: U77) is an Israel-based company that develops precision technology products that helps in the processing of diamonds and gemstones. The company’s products provide solutions for every stage of the manufacturing process that turns rough diamonds into the polished jewellery-worthy versions you see in stores.

At the company’s current stock price of S$1.44, it is near a 52-week low of S$1.41. But, is Sarine Technologies actually cheap?

There’s no easy answer since there are many ways to look at a company’s valuation. But, we can still get some insight by comparing Sarine Technologies’ current valuations with the market’s.

The three valuation metrics I will focus on are the price-to-book (PB) ratio, price-to-earnings (PE) ratio, and dividend yield. I will be using the SPDR STI ETF (SGX: ES3) as a proxy for the market; the SPDR STI ETF is an exchange-traded fund that tracks the fundamentals of Singapore’s stock market benchmark, the Straits Times Index (SGX: ^STI).

Sarine Technologies currently has a PB ratio of 4.8, which is nearly four times higher than the SPDR STI ETF’s PB ratio of 1.3. So, the company is clearly more expensive than the market, based on the PB ratio.

It is a similar story with the PE ratio. Sarine Technologies’ PE ratio of 25 is at a 117% premium to the market average.

Lastly, we have the dividend yield. This is where Sarine Technologies outshines the market. The diamond manufacturing system maker’s yield of 3.8% is higher than the market’s yield of 3.1%. (The higher the yield is, the lower a stock’s valued.)

To sum it all up, Sarine Technologies can be said to be priced at a premium to the market currently given its higher-than-average PE ratio and PB ratio.

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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 Lawrence Nga doesn’t own shares in any companies mentioned.