These 3 Companies Are Trading Close To Their 52-Week Low

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 M1 Limited (SGX: B2F)

As a quick introduction, M1 Ltd is one of the three telecoms in Singapore, the other being Starhub Ltd (SGX: CC3) and Singapore Telecommunications Limited (SGX: Z74). M1’s business has four segments, namely, mobile services, fixed services, international services, and handset sales.

The group recently announced its latest result. Revenue was up by 4.7% while earnings per share (EPS) came down by 20.8% on a year-on-year basis. The main reason cited for the poor performance was lower average revenue per user (ARPU). Moreover, the financial position had deteriorated from a net debt position of S$327 million a year ago to S$421 million this quarter.

On a slightly positive note, the fixed services segment continued to deliver positive performance on a year-on-year basis, with revenue up by 21.9% and subscribers growing by 21.3%.

The next company on the list is VICOM Ltd (SGX: V01).

Vicom is a leading provider of vehicle and non-vehicle related technical testing and inspection services with operations primarily in Singapore. The company is majority-owned by land-transport giant ComfortDelGro Corporation Ltd (SGX: C52).

Vicom’s share price had declined in the last few years after touching a high of about $6.75 in the middle of 2014. At the current price of $5.68, it is down by about 16% from the high touched in 2014. In one of my previous articles here, we looked at Vicom’s valuation as compared to the overall market after the multi-year decline.

One thing to note here is that Vicom has been appearing in the 52 week-low list for a number of occasions since last year. Thus, it might also fall into a category of stocks known as “value trap”.

The last company on our list is Advancer Global Limited (SGX: 43Q).

Advancer Global is an integrated services provider that operates in 3 different main businesses, namely employment services, facilities management services, and security services.

The company was listed in July 2016 at an IPO price of about $0.22 and touched a high of $0.47. Since then, the price has dropped precipitously to close at $0.285 at the time of writing, giving it a price to earnings ratio of 18.5 times.

For more information about the company, it will be useful to read this article here by my colleague James Yeo.

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.