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5 Insights Investors Can Learn From The Latest List Of Stocks That Are Near 52-Week Lows

Nearly once every week, I would screen for stocks – using SGX StockFacts – that are near 52-week lows. I do this for a good reason.

Stocks that are near 52-week lows 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 I run the screen on a near-weekly basis, there are trends I can observe. For instance, there were times in 2016 when the banking industry was hated by investors – all three local banks, namely,  DBS Group Holdings Ltd (SGX: D05), Oversea-Chinese Banking Corp Limited (SGX: O39), and United Overseas Bank Ltd (SGX: U11), appeared on the results of my screen repeatedly.

It was similar for the telcos too, as Singapore Telecommunications Limited (SGX: Z74), StarHub Ltd (SGX: CC3), and M1 Ltd (SGX: B2F) popped up on my screen for months back in 2016.

Here are some high-level things I’m seeing now with the latest list of stocks that are near 52-week lows.

The number of companies

Out of the 700-plus listed companies in Singapore, there were 76 that were trading within 10% of their respective 52-week lows as of 31 March.

In other words, around 90% of the listed companies in Singapore are trading at 10% or higher from their 12-month lows. On an anecdotal basis, this screen has one of the lowest number of companies I’ve seen since the beginning of 2016, indicating that the current market’s valuation as a whole could be higher than at any other time since 2016.

REITs galore

Of the 76 names that appeared, 21% – or 16 in absolute number – were REITs. REITs, as a percentage of all the listed entities in Singapore’s stock market, would be around 5% to 6%; from this, it can be seen how neglected REITs are by investors.

Some examples of the 16 REITs are Far East Hospitality Trust (SGX: Q5T), CapitaLand Mall Trust (SGX: C38U) and Parkway Life Real Estate Investment Trust (SGX: C2PU).

Plenty of real estate and construction-related companies

The second largest type of companies that appeared on my latest screen are those with exposure to real estate and construction. 12 out of the 76 names were from the aforementioned type.

Some examples of the group of 12 are Hiap Hoe Ltd (SGX: 5JK), Wee Hur Holdings Ltd (SGX: E3B), and KSH Holdings Limited (SGX: ER0).

Blue chips are in there too

Among the 30 Straits Times Index (SGX: STI) constituents, only seven companies showed up on my screen.

The group of seven include Singtel, StarHub, CapitaLand Mall Trust, ComfortDelGro Corporation Ltd (SGX: C52), Singapore Press Holdings Limited (SGX: T39), Hutchison Port Holdings Trust (SGX: NS8U), and Singapore Airlines Ltd (SGX: C6L).

A Foolish conclusion

My most important takeaway from the exercise above is this: The market appears to be in an optimistic mood at the moment!

For more investing insights as well as the latest news about Singapore's stock market, you can get both from The Motley Fool's free weekly investing newsletter, Take Stock Singapore. Written by David Kuo, Take Stock Singapore can help you grow your wealth in the years ahead. So, come sign up here.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.The Motley Fool Singapore has recommended shares of United Overseas Bank and CapitaLand Mall Trust. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.