10 Singapore Blue-Chip Stocks Trading Near Their 52-Week Low Share Prices
If you belong to the value investing camp, one way to search for investment ideas is to look at stocks trading near their 52-week lows.
Stocks under this category are usually beaten down because of their poor long-term business fundamentals.
However, some of them could be trading at their 52-week lows due to weak short-term market sentiments.
If investors can pick out those temporarily unloved gems, they could turn out to be profitable investments over the long run.
Screening for 52-Week Low Stocks
I ventured on my journey to find stocks that are beaten down among the Straits Times Index (STI) components.
I picked the Singapore benchmark instead of the whole stock market to narrow down the universe of stocks from more than 700 to just 30.
Here are the top 10 STI stocks whose share prices are languishing near their 52-week lows (data as of 26 August 2020).
|Name||Ticker||Last Close||52-Week Intraday Low||Change from 52-Week Intraday Low (%)||Price-to-Earnings Ratio||Price-to-Book Ratio||Dividend Yield (%)|
|Jardine Matheson Holdings||SGX:J36||US$42.3||US$37.37||13.19||-||0.45||4.07|
Source: StocksCafe and SGX
Separating the Wheat From the Chaff
Over the past couple of years, both companies have been struggling to grow their businesses as their net profits have been falling.
More recently, Keppel Corp made news when Temasek dropped its bid for the conglomerate after the former posted poor results.
Meanwhile, earlier last week, Singtel gave a business update for its first quarter ended 30 June.
The telco’s operating revenue tumbled 13.9% year-on-year to S$3.54 billion while its earnings before interest, tax, depreciation and amortisation (EBITDA) fell 24.2% year-on-year to S$897 million.
Therefore, just because a company is trading near its 52-week low price doesn’t make it an automatic buy.
It is important to understand why the price has fallen.
Is it due to mismanagement of the business, causing a permanent decline in value?
Or is it due to temporary poor market conditions that will be resolved?
If it’s the former, the price decline might be warranted.
But if it’s the latter, there could be some mispriced opportunities to take advantage of.
The list given above is certainly not a recommendation to buy or sell any of the companies mentioned.
What investors can do with the list is to dig deeper into the stocks, and determine which are worth investing in for the long-term.
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Disclaimer: The information provided by Seedly serves as an educational piece and is not intended to be personalised investment advice. Readers should always do their own due diligence and consider their financial goals before investing in any stock. The writer may have a vested interest in some of the companies mentioned.