Another month has passed, and we’re now just one month away from the end of the third quarter of 2014. Let us take a look at the top three performers in August among the Straits Times Index’s (SGX: ^STI) 30 constituents. As Fools, we all understand that the month to month performance of a share is hardly important. But by doing this monthly exercise of looking back at some of the best shares, it might give investors a better idea of what really moves a share. In other words, it gives us an opportunity to understand what some of…
Another month has passed, and we’re now just one month away from the end of the third quarter of 2014. Let us take a look at the top three performers in August among the Straits Times Index’s (SGX: ^STI) 30 constituents.
As Fools, we all understand that the month to month performance of a share is hardly important. But by doing this monthly exercise of looking back at some of the best shares, it might give investors a better idea of what really moves a share. In other words, it gives us an opportunity to understand what some of the catalysts behind major share price movements can look like. So, without further ado, here are the three names.
1. Thai Beverage Public Company Limited (SGX: Y92)
Thai Beverage, which makes and distributes alcoholic and non-alcoholic beverages in Thailand, is the top performer among the STI’s 30 constituents this month. The share price of the company had chalked up a 15.5% gain to $0.71 as of 31 August.
It seems that the main catalyst for such a strong performance is the company’s stellar half-year results released in the middle of August. For the six months ended 30 June 2014, Thai Beverage was able to grow its profit by 37.2% to THB11.49 billion compared to a year ago.
Even before the results from Fraser and Neave Limited (SGX: F99) and Frasers Centrepoint Ltd (SGX: TQ5) were included, Thai Beverage still managed to produce strong growth of 31.6% in its bottom-line. Thai Beverage had acquired Fraser and Neave’s shares last year together with its Chairman, Thai billionaire Charoen Sirivadhanabhakdi; Frasers Centrepoint was subsequently spun-off from Fraser and Neave after the acquisition was completed.
There’s also strong international sales growth of 37% in the second quarter from Thai Beverage to be happy about. In addition, optimism surrounding the recovery of Thailand’s economy following political unrest in the earlier part of the year had also probably boosted investors’ confidence in the company.
2. Olam International Ltd (SGX: O32)
Olam claims second spot with its shares climbing 7.3% to S$2.65 as of 31 August 2014.
Back in March this year, a consortium of Olam’s major shareholders sought to buy over even more shares of the company at a price of S$2.23 each. Ever since the transactions were completed in May, shares of the company have been steadily rising.
Earlier in August, Olam announced that it would be expanding its partnership with Sanyo Foods Co. Ltd, the third largest instant noodles maker in Japan. You can read more about it here.
The company also announced its full-year results on 29 August 2014 and posted a 67.8% increase in its annual profit. Olam also highlighted the progress of its Strategic Plans and commented that it has completed 14 initiatives so far which have “released cash of S$603.9 million, generated a P&L gain of S$94.0 million and added S$16.5 million directly to capital reserves.”
3. Singapore Exchange Limited (SGX: S68)
Stock exchange operator Singapore Exchange is also among one of the top performers for August – it’s stepped up by 3.1% to S$7.28 to claim third spot.
Some major news happening with SGX recently is its late August announcement that it will be reducing the board lot size from 1,000 to 100 for shares traded on its stock exchanges starting from 19 January 2015. It is a much anticipated announcement from the company. Hopefully, the reduced board lot size will help improve liquidity and trading activity in Singapore’s share market in the future.
Although these three companies have performances ranging from great to decent for the month of August, they have been even greater performers if shareholders had stuck with them for the long-term.
For instance, Singapore Exchange had returned 638% since the start of 2004 if we include the gains from reinvested dividends. The other two shares, namely Thai Beverage and Olam, which have shorter histories as publicly-listed entities, have achieved total returns of 268% and 107% since the start of 2007 and 2006 respectively.
With such long-term returns, why not invest for the long haul and let your money work for you instead of trying to jump in and out of shares every month?
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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 Stanley Lim owns Frasers Centrepoint Ltd.