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Is It Time To Be Greedy Or Fearful?

Have you realized the sentiment on the news about the market has changed in recent months? Over the weekend, the top news articles on Bloomberg includes “Stocks just had their worst week in years” and “Oil freefall give Dow worst week since 2011 as anxiety grows”. Yet, as these “bad” news pour into the media and my personal portfolio keep falling day after day, I cannot help but smile when reading the news report. For Warren Buffett famously said “Be fearful when others are greedy and greedy when others are fearful”, and it definitely seems that the market has been quite fearful lately.

Where Is The Fear Now?

Many companies are now trading near their 52-week low price this week. Even when we only scan through the constituents of The Straits Times Index (SGX: ^STI), there are 7 of them that are currently trading near their 52-week low prices. Some of them include

Golden Agri-Resources

After a poor showing of its third-quarter result, Golden Agri-Resources Ltd’s (SGX: E5H) share price has taken a beating. Its share price of S$0.455 per share is currently 26% lower than its peak of S$0.615 per share this year. The weak pricing on crude palm oil (CPO) is definitely not helping much for the company as well. Yet, the company management is still optimistic over the long term prospect of its business.

Keppel Corp

Keppel Corporation Limited (SGX: BN4) is one of the worst hit blue chips in the market currently. Within the last three month, the company has seen its share price dropped from S$10.60 to the current S$8.01 per share, a huge drop of 24.5% in a short span of time. The main reason? The price of crude oil has fallen from above US$100.00 per barrel to the around US$60.00 per barrel currently. Investors are fearful of further declining oil prices and how it might affect Keppel Corporation’s business in the future. However, we are seeing the company starting its share buyback programme in response to the falling share price.

The Sembcorps

For similar reasons, Sembcorp Industries Limited (SGX: U96) and Sembcorp Marine Ltd (SGX: S51) have both seen their share price fallen steeply. Sembcorp Industries has also started repurchasing its share in the open market. Its treasury shares held at the end of 15th Dec 2014 is already close to 3 million shares.

Foolish Takeaway

Others includes SIA Engineering Company Limited (SGX: S59), Singapore Technologies Engineering Ltd (SGX: S63) and SATS Ltd (SGX: S58). The point is this: so many of Singapore’s top companies are facing its lowest valuation for the past year, are all their current valuation justified? Or are there bargains lurking amongst them?

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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 Keppel Corporation