As an investor, one of the methods that I use to search for investment ideas is stock screening. One of my personal favourite screens is the 52-week low list. This screen, which is usually performed weekly, will give me a list of companies that are trading at their 12-month low. Why do I like this screen? As a value investor, I like to search for companies that are trading at good value. The 52-week low could be a good place to start, since these companies might have been ignore by the investment community for various reasons. Some deserve to be….
As an investor, one of the methods that I use to search for investment ideas is stock screening.
One of my personal favourite screens is the 52-week low list. This screen, which is usually performed weekly, will give me a list of companies that are trading at their 12-month low.
Why do I like this screen? As a value investor, I like to search for companies that are trading at good value. The 52-week low could be a good place to start, since these companies might have been ignore by the investment community for various reasons. Some deserve to be.
Occasionally, however, the market might have been overly negative. These companies could have good long-term prospects, despite some short-term headwinds. My job, then, is to try to separate the wheat from the chaff.
So what are the companies that have shown up on this week’s list? Here are three of them:
The first on the list is Singapore Press Holdings Limited (SGX: T39).
Singapore Press Holdings or SPH in short, is a publisher of newspapers such as The Straits Times, The Business Times, The New Paper, Berita Harian, My Paper, Lianhe Zaobao and others.
Also, it is involved in the real estate business and other activities like events management. As part of the firm’s real estate activities, it is the majority owner and manager of SPH REIT (SGX: SK6U), a real estate investment trust which owns retail malls in Singapore.
The group has recently announced its third quarter 2017 results. Here, revenue and net profit to shareholders were down by 10.8% and 45.2%, respectively, on a year-on-year basis. The main reason for such poor performance is due to the continuous weakening of the media segment. Moreover, the latest quarterly result is also affected by the impairment of goodwill in the media segment.
On a slightly positive note, the property segment continues to deliver positive performance on a year-on-year basis.
The next company on the list is Golden Energy and Resources Limited (SGX: AUE).
Golden Energy and Resources or GEAR is engaged in the exploration, mining, processing and marketing of thermal coal. It operates mainly in South Kalimantan, Central Kalimantan and Jambi (a province in Sumatra), Indonesia.
GEAR is one of the largest coal reserve owners in Singapore, owing a concession areas of more than 40K hectares, giving it a right to 23 billion tonnes of thermal coal resources and up to 770 million tonnes of coal reserves as at 31 December 2016. In addition, GEAR owns forestry concession rights of 265K hectares across four regions in South Kalimantan.
The company’s share price has fallen by about 40% since its share placement in December 2016 at $0.67.
So far, the company has delivered positive performance in Financial Year 2017, with revenue and profitability materially higher than that of Financial Year 2016. Moreover, its gearing is low at 0.07, as of March 2017. As such, the continued decline in share price is clearly something worth exploring, especially after the positive financial performance.
The last company on our list today is Soo Kee Group Ltd. (SGX: 42G) and it has a market capitalisation of S$70 million.
As a quick introduction, Soo Kee Group is a jeweler operating under three brands, namely Soo Kee Jewellery, SK Jewellery and Love & Co. According to its corporate website, it has a retail network of over 60 showrooms across Singapore and Malaysia.
The company was listed in August 2015 and has since saw its share price decline by about 50%. In fact, an article was written back then by colleague James Yeo that should give us a better understanding of the business.
At current price of $0.125, the company is trading at a yield of around 4%.
Though companies trading at 52-week low are a good place to search for investment ideas, the low price itself should not be the sole reason to invest in these companies.
As we all know, there is no guarantee that share prices will not fall further, just because it is trading at a 52-week 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.