MENU

2 Shares Near Their 52-Week Lows

Ser Jing - When a Cheap Share Isn't Cheap (pic)

There are more than 750 shares listed in Singapore and it can be exhausting to run through all of them to search for possible investment opportunities. That’s where investing screens can help – they can pare down the number of shares you need to study into a more manageable group.

For bargain hunters, shares that are trading near their 52-week lows might be a quick filter to help spot potential bargains. Here’s a quick look at two such shares.

1. LionGold Corp Ltd (SGX:A78)

Since changing its core business to the exploration, development, and mining of gold mines in March 2012, LionGold has taken up interests in eight different gold mining and exploration companies. Its primary concessions rest in Ghana, Australia, Canada, and Bolivia. With a focus on being Asia’s biggest gold producer, LionGold is constantly on the lookout for acquisition prospects based on a strict criteria. The company writes:

“Acquisition prospects will have scalable resources with scope for rapid enhancement and which are currently producing or within a year from production. The intention behind this selective approach is to unlock asset value while building out the gold business.”

Nonetheless, LionGold was part of the penny stock crash last October which saw its share price nosedive a whopping 96% from S$1.735 to a low of S$0.071. Blumont Group Ltd (SGX: A33) and Asiasons Capital Limited (SGX: 5ET) were part of the debacle as well. Investigations are currently ongoing regarding the crash.

As of Tuesday’s close, LionGold’s share price is still stuck at S$0.071, just a tad above its 52-week low of S$0.07. LionGold has not made a profit so there is no price/earnings (PE) ratio to speak of.

2. Food Empire Holdings Limited (SGX:F03)

Food and beverage manufacturer Food Empire is another share that’s currently near its 52-week low of S$0.36; the share closed at S$0.375 on Tuesday. Interestingly, despite being at a low, Food Empire’s shares still commands a lofty PE ratio of 55.

Listed in Singapore, Food Empire’s operations are spread across 19 different offices worldwide with five manufacturing facilities situated in Ukraine, Russia, Vietnam, Malaysia, and Singapore. The company’s main business is in the manufacture and distribution of branded instant coffee products; despite being a relatively small company with a market capitalisation of just S$200 million, Food Empire does seem to possess a strong brand as it has won several awards over the past few years like the “Most Valuable Brand in Singapore” and “The Strongest Singapore Brands.”

The present state of the company’s shares can be attributed mainly to the tense situation between Ukraine and Russia (the two countries are Food Empire’s largest geographical markets) which has led to the company chalking up a loss in its latest earnings release.  That said, investors who have a long-term view and who possess a contrarian streak may view this as an opportunity to invest; though of course, that’s up to each individual to judge

Foolish Bottomline

Shares near their 52-week lows may be a sign of a potential hidden gem. But, it may also be a value trap as well. There can sometimes be very legitimate reasons for a share being valued so cheaply by the market – the share may never be able to turn around its business or the turnaround might be many, many years away.

Bear that in mind for shares that are selling at seemingly low prices.

Click here now for your FREE subscription to Take Stock Singapore, The Motley Fool's free investing newsletter. Written by David Kuo, Take Stock Singapore tells you exactly what's happening in today's markets, and shows how you can GROW your wealth in the years ahead.  

The Motley Fool's purpose is to help the world invest, better. Like us on Facebook  to keep up-to-date with our latest news and articles.

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