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 time of writing on 11 January 2021).
Name Ticker Last Done 52-Week Intraday Low Change from 52-Week Intraday Low Price-to-Earnings Ratio Price-to-Book Ratio Dividend Yield
City Developments SGX: C09 S$7.18 S$6.07 18% 11.8x 0.6x 1.1%
Singtel SGX: Z74 S$2.48 S$2.00 24% 37.6x 1.5x 4.9%
Singapore Exchange SGX: S68 S$10.03 S$7.96 26% 22.8x 8.6x 3.0%
Hongkong Land SGX: H78 US$4.40 US$3.46 27% 51.9x 0.3x 5.0%
Dairy Farm SGX: D01 US$4.47 US$3.48 28% 18.7x 5.5x 4.7%
ComfortDelGro SGX: C52 S$1.70 S$1.32 29% 13.9x 1.5x 5.8%
UOL SGX: U14 S$7.76 S$6.01 29% 13.7x 0.7x 2.3%
Jardine Cycle & Carriage SGX: C07 S$22.01 S$16.58 33% 7.3x 0.9x 5.3%
Singapore Airlines SGX: C6L S$4.30 S$3.20 34% - 1.1x 0.7%
OCBC SGX: O39 S$10.57 S$7.80 36% 9.7x 1.0x 4.9%
Separating the Wheat From the Chaff
One “unloved” company from the 52-week low stock list is City Developments Limited (SGX: C09) (CDL).
Earlier this month, CDL announced that its independent non-executive director Tan Yee Peng had stepped down after disagreements with the board and management about the handling of its investment in China-based real estate developer Sincere Property Group.
Tan is the third director to step down in recent history.
In April last year, CDL took a 51% stake in Sincere to transform itself into a major property player in China.
If you believe that the selldown of CDL shares is temporary in nature and that the long-term business fundamentals of the property company are intact, along with it having an attractive valuation, it could provide an opportunity to buy the stock.
On the other hand, companies like Singapore Telecommunications Limited (SGX: Z74) (Singtel) could be selling at rock-bottom prices for a reason.
The telco has been struggling to grow its business as seen from its falling earnings over the past decade.
FY2010 FY2020 Change in percentage terms
Total revenue (S$ million) 16,871 16,542 -2.0%
Net profit (S$ million) 3,907 1,075 -72.5%
Underlying net profit (S$ million) 3,910 2,457 -37.2%
Diluted earnings per share (Singapore cents) 24.46 6.56 -73.2%
Source: Singtel annual reports
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 temporary poor market conditions that will be resolved?
Or is it due to mismanagement of the business, causing a permanent decline in value?
If it’s the former, there could be some mispriced opportunities to take advantage of.
But if it’s the latter, the price decline might be warranted.
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 the companies mentioned.