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 lows. 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 lows.
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 Bumitama Agri Ltd. (SGX: P8Z).
It is a palm oil plantation company. Its primary business activities are cultivating oil palm trees, as well as harvesting and processing fresh palm fruit bunches (“FFB”) into palm oil and palm kernel. Its operation are located in three provinces in Indonesia, namely Central Kalimantan, West Kalimantan and Riau.
In its latest quarterly result, the company reported that revenue grew by 39.5% year-on-year ,whilst net profit attributable to shareholders jumped by 164.8% during the period.
The improvement in financial performance was driven by growth in fresh fruit bunches (FFB), a result of improving FFB yield per hectare by 84% from 2.5MT/ha to 4.6 MT/ha.
At the current price of $0.725, Bumitama is trading at a price-to-earnings ratio of 10.1 times and dividend yield of 2.1%.
The next company on the list is Singapore Post Limited (SGX: S08).
Singapore Post Limited or Singpost is a mail and logistics company, organised into three major segments, namely, Mail, Logistics, and eCommerce.
In the company’s latest quarterly result, revenue was up by 6.3% year-on-year, whilst profit was down 13.6% during the period. The drop in profit was due to “decline in domestic mail volume, costs from planned investments, increased competition in logistics segment, and expansion costs of associates.”
One major development during the quarter was the movement of Lazada’s entire warehouse operations to SingPost’s Regional eCommerce Logistics Hub. Given that Alibaba is an investor in both companies, we might expect further collaboration between the two.
At the current price of $1.25, SingPost share price has declined by 13% in the last 12 months.
The last company on our list today is Genting Hong Kong Ltd (Malaysia) (SGX: S21).
As a quick introduction, Genting Hong Kong is a global leisure, entertainment and hospitality enterprise, with exposure in both land and seabased businesses.
Its business includes Genting Cruise Lines, German shipyards MV Werften and Lloyd Werft, night club Zouk, and Resorts World Manila, which is an associate of Genting Hong Kong.
Genting Hong Kong is majority owned and managed by Tan Sri Lim Kok Thay, who is also the chairman and CEO of Genting Berhad (KLSE: GENTING).
Genting Berhad, in turn, is the holding company for Genting group that owns companies such as Genting Singapore PLC (SGX: G13), Genting Malaysia Bhd (KLSE: GENM) and GENTING PLANTATIONS BERHAD (KLSE: GENP). Genting Berhad used to own a 16.87% stake in Genting Hong Kong but sold that to the Lim family in 2016.
Genting Hong Kong recently reported that its first half revenue for FY2017 was up by 22% year-on-year. Yet, losses for the period widened from US$55 million to US$203 million.
At US$0.255, Genting Hong Kong’s current share price is flat in the last 12 month.
Though companies trading at 52 weeks low can be a good place to look for investment ideas, the low price itself should not be the sole reason to invest in them.
As we all know, there is no guarantee that share price will not fall further just because it is trading at a 52 weeks low.
Also, like us on Facebook to follow our latest news and articles. The Motley Fool's purpose is to help the world invest, better.
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.