After a dramatic plunge below 3,000 points in February, the benchmark Straits Times Index has since recovered to close above. Yet a good many stocks remain undervalued or underowned. In this post, we will highlight 2 stocks – CWT and CSE Global.
CWT
CWT has 2 main business segments, logistics and Commodity SCM business. CWT is trading at 6.4x FY14F PER, representing a steep discount to its peers (average 16.7x). CWT has traded down from its 52 week high of $1.83 due to over-estimation of risks in Commodity SCM and lack of clarity on earnings growth ahead. The volatility in earnings due to its commodity related business has caused investors to reduced ownership of the stock. However the Commodity SCM business is less risky than perceived as CWT fully hedges prices in its Commodity SCM business, rendering the trades back-to-back and eliminating risk of losses through ...
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