Here Are 2 Stocks Trading Near 52-Week Lows

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Some of the greatest investors around – John Neff and Walter Schloss are good examples – source their investing ideas from lists of stocks that have fallen hard. That’s because they believe some beaten-down stocks will be bargains in relation to their actual economic worth.

Nearly once every week, I run a screen to look for companies with stock prices that are near 52-week lows.

There are many companies that pop up on my screen each time I run them. This week, let’s look at two companies I’ve chosen at random from a list of those that appeared. They are ComfortDelGro Corporation Ltd (SGX: C52), and IHH Healthcare Bhd (SGX: Q0F)

Source: S&P Global Market Intellligence

ComfortDelGro is a global land transport giant that operates mainly in Singapore, Australia, the United Kingdom, and China. It is also the majority owner of testing and inspections outfit Vicom Limited (SGX: V01) and bus and rail operator SBS Transit Ltd (SGX: S61).

I had recently gone through the different business segments that ComfortlDelGro has and the profitability of each of the company’s segments. You can find out more in here and here.

In the first-half of 2016, the company saw its revenue inch up by 0.9% to S$2.02 billion. This drove a 6.8% increase to S$158.6 million in profit attributable to shareholders.

ComfortDelGro mentioned in the earnings release that its Rail revenue is expected to grow for the rest of year. But, there are some troubled spots as revenues from the Automotive Engineering Services Business, Insepction and Testing Services Business, and Bus Station Business in Guangzhou are all projected to fall. The company also warned that costs are expected to be higher.

Interestingly, despite the company’s shares being near a 52-week low, they still carry a price-to-earnings (PE) ratio of 17.6, which is higher than the PE ratio of 12 that the SPDR STI ETF (SGX: ES3) has at the moment. The SPDR STI ETF is an exchange-traded fund that tracks the fundamentals of Singapore’s market barometer, the Straits Times Index (SGX: ^STI).

We now turn to IHH Healthcare.  The company is an international provider of premium healthcare services in in Asia, Central & Eastern Europe, the Middle East, and North Africa. It also happens to be the largest hospital group in the pan-Asian region.

In Singapore, some of the hospitals under IHH Healthcare’s banner are Mount Elizabeth and Gleneagles Singapore.

IHH Healthcare has had a pretty good time in 2016 so far. In the first six months of the year, the company’s revenue and profit had both climbed by 21% year-on-year. In its earnings release, the company said that it “continues to believe in the robust demand for quality private healthcare in its home and growth markets, especially India and China.”

In a similar manner to ComfortDelGro, IHH Healthcare currently has a PE ratio that is higher than the market’s. The hospital owner and operator is valued at 51 times trailing earnings at the moment.

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 ComfortDelGro and IHH Healthcare 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.