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-term.
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 16 September 2021).
Name Ticker Share Price 52-Week Intraday Low Change from 52-Week Intraday Low Price-to-Earnings Ratio Price-to-Book Ratio Dividend Yield
Venture Corporation SGX: V03 S$18.59 S$18.05 3.0% 18.2x 2.1x 4.0%
Wilmar International SGX: F34 S$4.10 S$3.952 3.8% 12.7x 1.0x 3.2%
Keppel DC REIT SGX: AJBU S$2.55 S$2.44 4.5% 26.0x 2.0x 3.4%
Dairy Farm SGX: D01 US$3.52 US$3.36 4.8% 17.6x 4.2x 4.7%
Ascendas REIT SGX: A17U S$3.07 S$2.83 8.5% 29.1x 1.4x 4.6%
Jardine Cycle & Carriage SGX: C07 S$19.92 S$17.63 13.0% 10.6x 0.8x 2.9%
ST Engineering SGX: S63 S$3.80 S$3.33 14.1% 22.7x 5.2x 3.9%
Genting Singapore SGX: G13 S$0.725 S$0.635 14.2% 126.3x 1.1x 1.4%
ComfortDelGro SGX: C52 S$1.56 S$1.36 14.7% 54.7x 1.2x 0.9%
Mapletree Industrial Trust SGX: ME8U S$2.87 S$2.502 14.7% 46.4x 1.6x 3.9%
Separating the Wheat From the Chaff
One “unloved” company from the 52-week low stock list is Keppel DC REIT (SGX: AJBU), which is also one of the featured companies in our Investing in 2021: 9 Stocks to Consider Buying for the New Year report.
After hitting an intraday high of S$3.16 in October 2020, the data centre REIT’s unit price has fallen to S$2.55.
The fall could be due to the rotation of money from “beneficiaries of the pandemic” (of which Keppel DC REIT is part of) to “re-opening” stocks.
Business-wise, Keppel DC REIT continues to perform well.
For its first half of 2021, Keppel DC REIT’s gross revenue grew 9.0% year-on-year to S$135.1 million while its distribution per unit (DPU) improved by 12.5% to 4.924 Singapore cents.
Over the longer term, its DPU has increased from 6.51 cents in 2015 to 9.17 cents in 2020.
If you believe that the selldown of Keppel DC REIT units is temporary in nature and that the REIT is a good proxy to the fast-growing technology sector, along with it having an attractive valuation, it could provide an opportunity to have part-ownership in the REIT.
On the other hand, companies like ComfortDelGro (SGX: C52) could be selling at rock-bottom prices for a reason.
From 2014 to 2019, the company’s net profit has tumbled from S$283.5 million to S$265.1 million.
2014 2015 2016 2017 2018 2019
Revenue (S$' million) 3,680.2 3,725.7 3,635.5 3,576.4 3,805.2 3,905.7
Net profit (S$' million) 283.5 301.9 317.1 301.5 303.3 265.1
Earnings per share (cents) 13.29 14.07 14.72 13.95 14.01 12.24
Net profit margin 7.7% 8.1% 8.7% 8.4% 8.0% 6.8%
Return on equity 13.1% 13.3% 13.2% 11.8% 11.6% 10.2%
Strong competition mainly in its taxi business (with the likes of ride-hailing apps like Grab) has impacted ComfortDelGro’s overall business.
When COVID-19 hit in 2020, ComfortDelGro’s earnings fell even further to S$61.8 million, bringing the full-year dividend per share to 1.43 Singapore cents, down from 9.79 cents in 2019.
Things seem to be looking better this year compared to 2020.
For the first half of 2021, the transport giant posted a net profit of S$91.0 million versus a net loss of S$6.6 million during the same period last year.
But it remains to be seen if ComfortDelGro can reverse the trend of declining profitability that has bogged down the company over the past few years.
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 doesn’t own shares in any companies mentioned.