Here Are 2 Stocks That Are Near a 52-Week Low

Some of the greatest investors around – such as John Neff and Walter Schloss – source their investing ideas from lists of stocks that have fallen hard. They believe that some beaten-down stocks may be a bargain in relation to their actual economic worth.

Nearly once every week, I run a filter to look for companies with stock prices that are near 52-week lows. (On a related side note, the use of stock filters can help investors narrow the playing field instead of investigating the 700-plus listed companies in Singapore one at a time.)

In this week’s exercise, Chip Eng Seng Corporation Ltd (SGX: C29) and Great Eastern Holding Limited (SGX: G07) are two companies that emerged. There were many others, but I had picked the two at random.

chip eng seng and great eastern 52-week low article
Source: S&P Global Market Intelligence

The first company on the list is Chip Eng Seng, a construction, civil engineering, and property group.

It has over 30 years of experience in general construction and is registered with the Building and Construction Authority (BCA) under the A1 classification. This is the highest classification and allows Chip Eng Seng to bid for public sector projects of unlimited value.

Chip Eng Seng also owns a number of investment properties in Singapore and Australia which gives the company rental income. In 2015, Chip Eng Seng ventured into the hospitality industry with the opening of Park Hotel Alexandra. This helped to diversify the company’s income stream even further.

The company had managed strong growth from 2011 to 2014, with revenue more than tripling from S$360 million to S$1.1 billion and profit more than doubling from S$124 million to S$281 million. But, Chip Eng Seng’s numbers had tumbled in 2015 – revenue slipped to S$677 million and profit fell to S$63 million.

The next company is Great Eastern, a life insurance company in Singapore and a subsidiary of the local banking giant Oversea-Chinese Banking Corp Limited (SGX: O39).

Great Eastern is the oldest and most established life insurance group in Singapore and Malaysia with its roots tracing back to 1908. The company is also huge, with S$68 billion in total assets at last count.

Over the past five from 2011 to 2015, Great Eastern has grown its gross written premiums from S$6.43 billion to S$8.76 billion. This translates to an 8% compound annual growth rate. The insurer’s net asset value per share has also grown by 9.7% annually from S$8.27 in 2011 to S$13.16 in 2015.

It’s worth noting that not every company with a stock price near a 52-week low is a legitimate bargain. A declining stock price can decline yet further if the underlying business performance continues to weaken.

Nothing we’ve seen here about Chip Eng Seng and Great Eastern should be taken as the final word on their investing merits. The information presented in this piece should be viewed only as a useful starting point for further research.

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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 Lawrence Nga doesn’t own shares in any companies mentioned.