In a recent article here, we saw that there were 112 net-net stocks, as of 14 December 2018. To understand what a net-net stock is, you can head here. In this article, let’s look at 20 of those cheapest stocks sorted out according to the following two lists: 1) The 10 net-net stocks with the largest market capitalisations; and 2) The 10 largest net-net stocks that have positive net income over the last 12 months, as well as more cash than debt on their balance sheets. Here are the 10 stocks on the first list: UOB-Kay Hian Holdings Limited (SGX:…
In this article, let’s look at 20 of those cheapest stocks sorted out according to the following two lists:
1) The 10 net-net stocks with the largest market capitalisations; and
2) The 10 largest net-net stocks that have positive net income over the last 12 months, as well as more cash than debt on their balance sheets.
Here are the 10 stocks on the first list: UOB-Kay Hian Holdings Limited (SGX: U10), Hong Leong Asia Ltd (SGX: H22), SingHaiyi Group Ltd (SGX: 5H0), Kingboard Copper Foil Holdings Limited (SGX: K14), SLB Development Ltd (SGX: 1J0), Sino Grandness Food Industry Group Ltd (SGX: T4B), YHI International Ltd (SGX: BPF), Hanwell Holdings Ltd (SGX: DM0), Goodland Group Ltd (SGX: 5PC) and IFS Capital Ltd (SGX: I49).Source: S&P Global Market Intelligence
The following are the stocks on the second list: Kingboard Copper Foil Holdings Limited, Hanwell Holdings Ltd, ISDN Holdings Ltd (SGX: I07), Ellipsiz Ltd (SGX: BIX), Multi-Chem Ltd (SGX: AWZ), PNE Industries Ltd (SGX: BDA), Datapulse Technology Limited (SGX: BKW), Asia Enterprises Holdings Limited (SGX: A55), Sin Ghee Huat Corporation Ltd (SGX: B7K) and Sunright Limited (SGX: S71).Source: S&P Global Market Intelligence
To learn how to calculate a company’s net current asset value, let’s use SingHaiyi as an example. The company is involved in property development, property investment and property management.
As of 30 September 2018, SingHaiyi had total current assets of S$825.20 million and total liabilities of S$455.36 million. This gives a net current asset value of S$369.84 million.
The firm’s share price closed at S$0.08 on 14 December 2018, giving a market capitalisation of S$339.3 million. Therefore, the ratio of its market-capitalisation-to-net-current-asset-value was around 0.92. This also means that SingHaiyi was selling at an 8% discount to its net current asset value.
The Foolish bottom line
Net-net stocks are usually companies that are in serious trouble and/or have poor business fundamentals. That is why diversification is important when investing in such stocks.
The two lists of cheap stocks seen earlier are not a recommendation to buy or sell any of those stocks. The aim here is to simply share some of the undervalued stocks in Singapore’s stock market right now for your own further research.
Meanwhile, there are 28 surprising and important things we think every Singaporean investor should know—and we’ve laid them all out in The Motley Fool Singapore’s new e-book. Packed with information and insights, we believe this book will help you be a better, smarter investor. You can download the full e-book FREE of charge—simply click here now to claim your copy.
The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.