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 a good value. The 52-week low could be a good place to start since these companies might have been ignored by the investment community for various reasons. Some deserve to…
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 a good value. The 52-week low could be a good place to start since these companies might have been ignored by the investment community for various reasons. Some deserve to be.
Occasionally, however, the market might be 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.
Here are three companies that showed up in my list recently:
The first on the list is ComfortDelgro Corporation Limited (SGX: C52).
ComfortDelgro is a transport company with operations mainly in Singapore, Australia, the United Kingdom, and China. It is also the majority owner of vehicle and non-vehicle testing and inspection outfit, Vicom Limited (SGX: V01), and bus and rail services operator, SBS Transit Ltd (SGX: S61).
Recently, the company reported its latest quarterly result. For the quarter, revenue was down by 3.4% year-on-year and net profit declined 6.8% during the period. As a result, EPS declined by 7.3%. The negative performance was driven primarily by weaker performance in the taxi segment as a result of increased competition and a negative foreign currency translation.
Going forward, Comfortdelgro expects all segments to deliver weaker performance, with the exception of Public Transport Services and Driving Centre.
The next company on the list is StarHub Ltd (SGX: CC3).
For its latest quarterly results, revenue was marginally down by 1% year-on-year whilst net profit plunged 21%. As a result, EPS was down by 19.4% year-on-year. As of 30 June 2017, Starhub had $452.9 million in cash and equivalents while borrowings were at $987.5 million.
The above performance reflects the continuous challenges faced by the local telecom. During the quarter, average revenue per user (ARPU) declined for Mobile, Pay-TV and Broadband segments. Furthermore, we continue to see customer numbers declining for the Pay-TV division.
What’s more, the share price for Starhub has declined by 31% in the last 12 months alone.
The last company on my list today is Raffles Medical Group Ltd. (SGX: BSL).
Raffles Medical runs hospital and healthcare services in Singapore. It also has a network of clinics in five countries and thirteen cities. Also, it has two hospitals under development in China, which is projected to be completed by 2018 and 2019.
In its recent quarterly result, Raffles Medical achieved record quarterly revenue of S$120.1 million in Q2 2017, a 1.0% increase from S$119.0 million in Q2 2016. Yet, staff cost and consumables used grew faster than revenue for this quarter, resulting in a decline in operating profit by 1.9%. Earnings per share came in flat year-on-year.
In the last 12 months, the company’s share price has declined by about 23%. Though it’s hard for us to pinpoint a specific reason for the decline, news that medical tourism in Singapore has lost its appeal to the neighboring countries might have been the culprit.
Though companies trading at 52-week 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. There is no guarantee that the share prices will not fall further just because they are trading at 52-week lows.
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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. Motley Fool has a buy recommendation for Raffles Medical.