3 Companies Trading Close To Their 52-Week Lows

Regular readers will know that one of my favourite ways to search for stocks is to use the 52-week low list. This screen, which is usually performed on a weekly basis, will give me a list of companies that are trading at 12-months low.

As a value investor, I like to search for companies that are trading at good value. The 52 weeks low is a good place to start with since these companies are usually hated or neglected by the investment community for various reasons, and many deserve so.

Occasionally, however, market participants may have reacted overly negative on certain companies which may have good long term prospects despite some short term headwinds. Our job, then, is to try to separate the wheat from the chaff.

Here are three companies on this week’s list:

Company Name Mkt. Price vs. 52 Price to book
  S$ million weeks low (%) ratio
BreadTalk Group Limited (SGX: 5DA) 282 2.55% 2.2
SIA Engineering Company Limited (SGX: S59) 3889 3.28% 2.6
StarHub Ltd. (SGX: CC3) 5304 0% 23.1

BreadTalk may be best known for its signature pork floss buns that it sells in its namesake bakeries around the Garden City and other parts of Asia. It has three main business segments, namely, Bakery, Restaurant, and Food Atrium.

In its latest quarterly results summary, which can be found here, the company’s performance was mixed. Revenue fell by 2.7% year-on-year to $157.3 million but net profit and EPS were up by 108% and 108.5% year-on-year, respectively.

The improvement in net profit, despite lower revenue, was due to improvements in cost control and supply-chain management.

SIA Engineering, which is a subsidiary of Singapore Airlines Ltd (SGX: C6L), specialises in providing aircraft maintenance, repair, and overhaul (MRO) services to major airlines around the world.

Recently, the company faced some headwinds due global economic uncertainties and the challenging outlook of the MRO industry. This was reflected in its latest quarterly results here, with net profit and EPS down by 20.2% and 19.9% from a year ago, respectively.

Moreover, company’s interim dividend dropped 33% year-on-year from S$0.06 per share a year ago to S$0.04 per share.

StarHub is one of the three telecoms listed on Singapore Stock Exchange. In its 2016 third-quarter results, the company reported that revenue, net profit and EPS were down by 3%, 27.6% and 27% from one year earlier, respectively. StarHub’s revenue was down across the board, with the exception of its Broadband segment.

Despite the weaker performance, StarHub intends to maintain its dividend payment for 2016. For more information about the latest quarterly performances, click here for the summary.

Although companies trading at 52-weeks low are a good place to search for investment ideas, the low price itself should not be the sole reason to invest in such companies.

As we all know, there is no guarantee that the share price will not fall further, just because it is trading at a 52-weeks low.

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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.