Here Are 3 Stocks Trading Near Their 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. Market participants can at times react too negatively to certain companies that have sound long-term prospects but have experienced some short-term stumbles.

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 three companies I’ve chosen at random from a list of those that appeared. They are Singapore Press Holdings Limited (SGX: T39), SIA Engineering Company Ltd (SGX: S59), and StarHub Ltd (SGX: CC3).

Source: Yahoo Finance; S&P Global Market Intelligence

Singapore Press Holdings’ latest results (for its financial year ended 31 August 2016) was released slightly over a month ago. The company reported declines of 4.5% and 17.5% in its operating revenue and net profit, respectively.

SPH’s Media segment faced headwinds due to a secular decline in the newspaper industry. This however, was partially offset by positive performance in the company’s Property segment.

On the business outlook, Alan Chan, SPH’s chief executive, said:

“FY2016 has been a challenging year marked by a very tough operating environment. Looking ahead, market conditions are expected to remain difficult in view of the uncertain economic outlook and the continuing disruption of the media industry.”

The next company on the list is SIA Engineering Company, which specialises in aircraft maintenance, repair, and overhaul (MRO) services. The company counts over 80 international airlines amongst its customer base.

In the quarter ended 30 September 2016, SIAEC reported a slight 0.5% dip in revenue and a 19.9% decline in earnings per share.  Higher staff costs and material costs were big culprits in the company’s lower profit.

SIAEC also warned of “global economic uncertainties” and a “challenging outlook” for the MRO industry.

Lastly, we have StarHub, one of Singapore’s three operational telcos. The third-quarter of 2016 saw StarHub report year-on-year declines in both its revenue (3%) and net profit attributable to shareholders (27.6%).

The company had lowered its outlook for the whole of 2016 when it released its second-quarter results. It initially expected some revenue growth, but then said that 2016’s revenue is expected to be at about the same level as 2015. The outlook given by StarHub in its third-quarter earnings is the same as the one given in the second-quarter.

A Foolish conclusion

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 SPH, SIAEC, and StarHub 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.