I’m a value investor. So, I like to search for companies that are trading at good value. A list of stocks that are near a 52-week low is a good place to start my search for a good reason. These are the stocks that are either neglected or beaten down by investors. And, some of these stocks can be bargains in relation to their actual economic worth because market participants can at times react too negatively to certain companies that have sound long-term prospects but have experienced some short-term stumbles. As such, I will screen for stocks that are trading…
I’m a value investor. So, I like to search for companies that are trading at good value. A list of stocks that are near a 52-week low is a good place to start my search for a good reason.
These are the stocks that are either neglected or beaten down by investors. And, some of these stocks can be bargains in relation to their actual economic worth because market participants can at times react too negatively to certain companies that have sound long-term prospects but have experienced some short-term stumbles.
As such, I will screen for stocks that are trading near a 52-week low nearly once every week. There are many stocks that pop up on my screen each time I run it. In here, let’s look at three stocks I’ve chosen at random from a list of those that popped up. They are: Singapore Airlines Ltd (SGX: C6L), Vicom Limited (SGX: V01), and Kingsmen Creatives Ltd (SGX: 5MZ).
Source: S&P Global Market Intelligence
Singapore Airlines is the company that owns Singapore Airlines, the national airline of Singapore. Beyond that, the company also has other airlines under its belt, including Silk Air and Scoot.
The company has a listed subsidiary in SIA Engineering Company Ltd (SGX: S59) as well. SIA Engineering specialises in providing aircraft maintenance, repair, and overhaul (MRO) services. It has over 80 international airlines as customers.
Singapore Airlines announced its results for the quarter ended 31 December 2016 last week. During the quarter, the company experienced a 2.3% year-on-year decline in revenue which eventually led to a 35.5% fall in profit.
In its earnings release, Singapore Airlines commented that “2017 is expected to be another challenging year amid tepid global economic conditions and geopolitical concerns, alongside other market headwinds such as overcapacity and aggressive pricing by competitors.”
The next company on the list is Vicom. As a quick introduction, Vicom provides technical testing and inspection services for vehicles in Singapore. It also provides such services to companies in a wide range of industries. Vicom is a majority-owned subsidiary of local land-transport giant ComfortDelGro Corporation Ltd (SGX: C52).
Vicom’s shares have fallen steadily since peaking at a high of nearly S$6.80 in late 2014. One of the main culprits has been the company’s falling financial performance.
Vicom’s latest results, released last week, are for the calendar year 2016. During the year, the company had experienced declines of 5.2% and 10.3% in its revenue and profit, respectively. The company also mentioned in its earnings release that business conditions “are expected to remain difficult for both the vehicle and non-vehicle testing businesses.”
The last stock I’m going to be sharing on is Kingsmen Creatives.
For some background, the company is a corporate marketing services provider. Its business is organized into four major divisions: Exhibitions and Museums; Retail and Corporate Interiors; Research and Design; and Alternative Marketing.
Kingsmen Creatives’ share price has fallen by nearly 40% from its peak of around S$1.055 that was reached near the middle of 2015, largely as a result of uninspired business performances.
In the first nine months of 2016, Kingsmen Creatives has managed to grow its revenue by about 7.3%. Yet, its net profit attributable to shareholders had plunged from S$4.42 million to S$2.92 million due to higher expenses and weaker pricing. Despite the challenging environment, Kingsmen Creatives expects 2016 to be an overall profitable year.
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 Singapore Airlines, Vicom, and Kingsmen Creatives 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.
Also, like us on Facebook to follow our latest news and articles. The Motley Fool's purpose is to help the world invest, better.
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.