2 Small and Mid Caps Companies with Potential Upside of More than 50%

A consensus estimate is the average target price based upon the recommendation prices provided by various equity analysts which have initiated coverage on the particular stock.

Generally, equity analysts predict the company’s projected revenue and earnings for the current fiscal year and the next few fiscal years. After which, the analyst will consider various factors which might affect the projected figure, before issuing a target price for the stock.

The target price is usually updated on a quarterly basis when financial results are released. The difference between the target price and current share price would be the potential upside (or even downside).

In this article, we will be looking at 2 companies with potential upside of more than 50% to its target price, which are:

• Food Empire Holdings Limited (SGX: F03)
• Uni-Asia Group Limited (SGX: CHJ)

1) Food Empire Holdings Limited (SGX: F03)

Food Empire Holdings Limited (“Food Empire”) is a global branding and manufacturing company in the food and beverage sector. Its products include instant beverage products, frozen convenience food and snack food.

Food Empire’s products are exported to over 50 countries, in markets such as Russia, Vietnam, Ukraine, Kazakhstan, Central Asia, the Middle East, China, Mongolia and North America. The Group has 23 offices worldwide and operates 7 manufacturing facilities in Malaysia, India, Vietnam, Russia and Ukraine.

Key Statistics

Consensus Estimates

Based on the analyst consensus estimates, Food Empire has a “Buy” recommendation with a mean target price of close to S$1.20. This translates into a potential upside of 56% based on the share price of S$0.77.

Over the 3 months, analysts have reduced their target price for Food Empire by 5.5%. On top of that, analysts have adjusted downwards their forecasted revenue and profitability by 0.65% and 30.19% respectively on back of the rising commodity prices, which will have a significant impact on its profitability.

2) Uni-Asia Group Limited (SGX: CHJ)

Uni-Asia Group Limited (“Uni-Asia”) is an alternative investment group specialising in creating alternative investment opportunities and providing integrated services relating to such investments.

The Group’s alternative investment targets are mainly cargo ships and properties. The Group also has extensive know-how and network relating to such alternative investments and provides services relating to these investments. The two main alternative asset classes the Group focuses in are Shipping and Property.

Key Statistics

Consensus Estimates

Based on the analyst consensus estimates, Uni-Asia has a “Buy” recommendation with a mean target price of close to S$2.34. This translates into a potential upside of 90% based on the share price of S$1.23.

Over the 3 months, analysts have increased the target price by 50%. On top of that, analysts have adjusted upwards their forecasted revenue and profitability by 4.02% and 38.18% respectively on back of the elevated shipping fees and resilient demand for handysize dry bulk carriers.

Conclusion

To conclude, both companies have a significant potential upside against their current share price based on the analysts’ consensus.

That said, investors should only take the target prices as a rough guide but still keep a close eye on their fundamentals and latest developments to determine the next course of action.

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