2 Shares That Beat the Market Today

Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on changes — just in case they’re material to our investing thesis.

The Straits Times Index (SGX: ^STI) has increased by 1.05% to 3,237 points with 25 of its 30 constituents clocking gains.

With the blue chips having a good day collectively, let’s take a closer look at two market-beaters from within the group.

Singapore’s second largest telecommunications outfit Starhub Ltd. (SGX: CC3) has gained 2.49% to S$4.11. The company would be releasing its third quarter results soon on 5 November 2014.

For the first half of 2014, Starhub saw its revenue dip by 2% to S$1.148 billion compared to a year ago; its net profit followed suit with a 7% decline to S$179 million.

Despite the slight drops in its top- and bottom-line, Starhub had managed to grow its free cash flow by 6.4% year-on-year from S$156 million to S$166 million. This gave the telco the ability to declare dividends of S$0.10 per share for the first half of 2014, unchanged from a year ago.

Starhub’s intention for the year is to maintain its dividends at S$0.20 per share, same as what it paid out in 2013. When the firm reports its results two weeks later, investors who are attracted to the company’s dividend yield (Starhub has a historical yield of 4.9%, which is considerably higher than the market’s average yield of around 2.7%), ought to keep an eye on the company’s free cash flow – long-term trends in that metric would eventually have a huge bearing on how Starhub’s dividends evolve.

Singapore Exchange Limited (SGX: S68) is up next with its shares climbing 3.38% to S$7.03 after releasing its first quarter earnings on Tuesday. Interestingly, the market has given the stock exchange operator a thumbs up despite the company experiencing an 8% and 16% year-on-year decline in its top- and bottom-line, respectively.

Much of the damage to Singapore Exchange’s results had been due to its Securities business segment (the company’s largest segment in 2013), which saw a 28.8% drop in revenue. The segment had suffered because of “low volatility” in the securities market in Singapore. There were also big declines in securities daily average traded value and total traded value of 27% and 26%, respectively. These exacerbated the problem for the company.

On that note, Singapore Exchange’s trying hard to boost activity in the securities market in Singapore and one of the improvements it has implemented would be the upcoming reduction in the unit lot size from 1,000 to 100. With a decrease in the board lot size, highly-priced blue chips would become more affordable for every investor – this has the potential to drive trading activity for the company.

With Singapore Exchange seemingly unable to grow its business much over the past five years – revenue for FY2010 (financial year ended 30 June 2010) was at S$640 million as compared to S$672 million for the last 12 months – investors would need to watch the company’s ability to drive top-line growth.

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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 writer Chong Ser Jing doesn't own shares in any company mentioned.