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3 Blue-Chip Stocks Near their 52-Week Lows: Are They a Bargain?

Dubbed a Superinvestor by Warren Buffett, Walter Schloss was known to be a deep value investor. Schloss was very keen in stocks that were selling at 52-week low prices.

In Singapore, even among the well-known companies in the Straits Times Index (SGX: ^STI), there are a few stocks that are flirting with their respective 52-week low prices.

Let’s take a look at three of them today, starting with the stock that is closest to its 52-week low price.

StarHub Ltd fell to a low of S$2.63 a few hours ago. Since the market has not closed for the day, the 52-week low price for the telecommunications firm can trend lower.

The company made public its latest quarterly results just yesterday, and things are looking ugly. Revenue came down 1% year-on-year to $579 million, due to weaker mobile, pay TV and broadband sales. Meanwhile, net profit tumbled 21% year-on-year to S$85.7 million.

Consequently, its diluted earnings per share fell 19% to 5.0 cents. Shareholders will receive 4.0 Singapore cents per share as dividends for the latest quarter, down from the five cents paid out a year ago.

StarHub expects prolonged competition in its broadband business and challenges from alternative viewing options for its pay TV business. You can read up on the latest earnings here.

Over at media giant, Singapore Press Holdings Limited, third quarter revenue slumped 10.8% year-on-year to $260.0 million, and net profit plunged 45.2% to S$28.9 million.

The poor revenue performance for the quarter was mainly due to a 15% decline in media segment sales.

The organisation said that “the operating environment is expected to remain challenging in view of the continuing disruption of the media industry”.

Comfortdelgro Corporation Ltd will report its second quarter earnings on 11 August 2017. For the first quarter, net profit rose 12.4% year-on-year to S$82.5 million, even though revenue fell 2.4% to S$972 million.

The company ended off its first quarter results announcement by saying that its “operating environment remains challenging and costs will continue to be managed prudently”. Check out the first quarter earnings coverage here.

Just because a blue-chip company is selling at a 52-week low price, it does not mean it is a screaming buy. Investors must delve deeper to see if there are any structural changes to the company or the share price weakness is a temporary affair. If it is the former, it would be prudent not to touch the business with a ten-foot pole. If it is the latter, the low share price may offer a great opportunity for contrarian investors. Meanwhile, get more investing tips and tricks, FREE! Sign up here to The Motley Fool Singapore’s investing newsletter, Take Stock Singapore.

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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 Sudhan P doesn’t own shares in any companies mentioned.