As an investor, one of the methods that I use to look 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 look for companies that are trading at good valuations. 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,…
As an investor, one of the methods that I use to look 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 look for companies that are trading at good valuations. 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 Hour Glass Ltd (SGX: AGS).
Hour Glass Ltd (SGX: AGS) is in the business of retailing luxury watches. It has a network of over 40 stores in Singapore, Malaysia, Thailand, Japan, Hong Kong, and Australia.
The company is an official retailer of some of the world finest brands, such as Audemars Piguet, Cartier, Hublot, IWC, Patek Philippe, Richard Mille, Rolex, Sinn, TAG Heuer and more.
Recently, the company reported its latest quarterly result. Revenue was up by 11% year-on-year to S$165.9 million. But profit attributable to shareholders was down by 15% to S$6.9 million. Consequently, earnings per share (EPS) saw a 22.4% decline from 1.16 cents in FY2017’s first-quarter to 0.99 cents in the reporting quarter.
The growth in revenue was driven by improvement in consumer sentiments in certain markets. Nevertheless, gross margin declined from 22.9% last year to 21.2% this quarter. Together with higher operating expenses, net profit decline by 15% year-on-year.
At current price of $0.64, Hour Glass is trading at a P/E ratio of 9.5 times.
The next company on the list is Singapore Press Holdings Limited (SGX: T39).
Singapore Press Holdings or SPH, is a publisher of newspapers such as The Straits Times, The Business Times, The New Paper, Berita Harian, My Paper, Lianhe Zaobao and more.
It is also in the real estate business and other activities such as events management. As part of the firm’s real estate activities, it is the majority owner and manager of SPH REIT (SGX: SK6U), which is a real estate investment trust that owns retail malls in Singapore
The company’s latest quarterly results continued to demonstrate the challenging environment of its media business. Quarterly revenue fell by 10.8% year-on-year, whilst net profit plunged 45.2% year-on-year. As a result, EPS was down from $0.03 to $0.02.
Lower advertising and circulation revenue led to reduced revenues for the media segment. The fall was offset by increases in revenue from the property segment, and the others segment. The latter was lifted by the SPH’s newly acquired healthcare business.
The weaker financial performance was reflected in SPH’s share price. At today’s price of $2.78, the shares were down by 27% in the last 12 months.
The last company on our list today is Jardine Cycle & Carriage Ltd (SGX: C07).
Jardine Cycle & Carriage Ltd or JCC is one of the companies related to the web of Jardines companies that include Jardine Strategic Holdings Limited (SGX: J37), Hongkong Land Holdings Limited (SGX: H78), Dairy Farm International Holdings Ltd (SGX: D01), Mandarin Oriental Limited (SGX: M04) and Jardine Matheson Holdings Limited (SGX: J336).
Jardine C&C is a conglomerate with interests in automotive, financial services, heavy equipment and mining, agribusiness, information technology, and infrastructure, logistics and others.
In its recent half-year result, Jardine C&C reported revenue growth of 11% year-on-year and underlying net profit rose 13% year-on-year. Similarly, half-year earnings per share grew 13% year-on-year. The positive performance was driven by stronger performance in PT Astra, which as offset slightly by the weaker performance in its direct motor business.
At current price of $39.85, JCC is trading at a P/E ratio of 15 times.
Though companies trading at 52 weeks low is a good place to search for investment ideas, the low price itself should not be the sole reason to invest in such companies.
As we all know, there is no guarantee that the share price 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.