How You Can Unearth Investment Opportunities

sand dig unearth

In Singapore’s share market, there are more than 700 listed companies, of which 30 belong to the Straits Times Index (SGX: ^STI), the benchmark for the local share market.

Given a universe with a few hundred shares to choose from, if you’re a beginner who’s new to investing, it can be easy to feel lost when it comes to finding shares for your first few investments. So, I’m here to help!

To find out which share(s) you should start looking into first, think about yourself. Where are your interests? Where do you work? How do you travel?  What products do you use frequently? Where do you shop? Which restaurants do you patronise? As simple as it sounds, observation and awareness can actually be the keys to finding investment ideas.

We Singaporeans love to eat and fortunately, we are usually spoilt for choice when it comes to food. When it comes to listed businesses that make a living by cooking, there are quite a number to look into as well. Some of the companies that come to my mind are restaurant outifts Japan Foods Holding  (SGX: 5OI), Soup Restaurant and Sakae Holdings. Other than restaurants, there are other food outlets providing quick bites such as Old Chang Kee, with its curry puffs and fried snacks, and BreadTalk (SGX: 5DA), with its buns and pastries.

Out of the three restaurants cited above, Japan Foods has the highest market capitalisation. It operates a chain of restaurants serving authentic Japanese ramen fare under various brands such as Ajisen Ramen, Menzo Butao, and Menya Musashi. As of 31 March 2014, the firm had a total 43 restaurants in Singapore. Beyond our shores, it has four Ajisen Ramen restaurants in Malaysia, one in Indonesia and two in Vietnam. Furthermore, through joint ventures, it has interests in seven Menya Musashi restaurants in Hong Kong and one in Shanghai.

The food outlets in Singapore are usually located in shopping malls. Some of the listed shopping mall owners include CapitaMall Trust (SGX: C38U) and Frasers Centrepoint Trust (SGX: J69U). CapitaMall Trust was the first real estate investment trust listed in Singapore and owns malls such as Plaza Singapura, JCube, and Junction 8 in its portfolio. Meanwhile, Frasers Centrepoint owns shopping malls like Changi City Point, Northpoint, and Causeway Point.

While at the malls, you may also find retail outlets from other listed companies such as Popular Holdings, Challenger Technologies, and Courts Asia. The first sells mainly books & stationaries; the second deals with mainly information technology products like computers, laptops, and other electronic accessories; and the last company’s in the business of retailing electrical products, IT products, and furniture.

Once you have zoned in on your favourite company, there are few more hoops you need to jump through: You have to understand how the company makes money; look at the financial statements of the firm; understand who are the people running the company and what they have done for the company over the years; and finally, look at the valuation of the business. There are various articles on the different aspects of investing in The Motley Fool Singapore.

Investment ideas can pop out from anywhere. You might get inspiration while watching TV, reading newspapers and magazines, travelling, working in the office, shopping at the mall, eating out at restaurants, or even while strolling along the streets. You just have to be observant and be aware enough. Are you ready to unearth the next share to invest in?

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.