I’m a value investor. So, I like to search for companies that are trading at good value. A list of stocks that are near their respective 52-week lows is a good place to start my search for a good reason. These are the stocks that are either neglected or beaten down by investors. And, some of these stocks can be bargains in relation to their actual economic worth because market participants can at times react too negatively to certain companies that have sound long-term prospects but have experienced some short-term stumbles. As such, I will screen for stocks that are…
I’m a value investor. So, I like to search for companies that are trading at good value. A list of stocks that are near their respective 52-week lows is a good place to start my search for a good reason.
These are the stocks that are either neglected or beaten down by investors. And, some of these stocks can be bargains in relation to their actual economic worth because market participants can at times react too negatively to certain companies that have sound long-term prospects but have experienced some short-term stumbles.
As such, I will screen for stocks that are trading near 52-week lows nearly once every week. There are many stocks that pop up on my screen each time I run it. In here, let’s look at three such stocks.
Source: SGX Website
The first on the list is Jardine Cycle & Carriage Ltd (SGX: C07), or Jardine C&C.
Jardine C&C is one of the companies related to the web of Jardine companies which include Jardine Strategic Holdings Limited (SGX: J37), Hongkong Land Holdings Limited (SGX: H78), Mandarin Oriental Limited (SGX: M04) and Jardine Matheson Holdings Limited (SGX: J36).
On its own, Jardine C&C is a conglomerate with a diverse set of businesses, with segments such as automotive, financial services, heavy equipment and mining, agribusiness, information technology, and infrastructure, logistics and others.
In its first-half results, Jardine C&C reported that revenue grew by 11% year-on-year and net profit attributable to shareholders increased by 13% during the period. The stronger performance was mainly driven by Astra, its Indonesia subsidiary. On the other hand, Jardine C&C’s Direct Motor business faced challenges in all areas but Singapore.
Going forward, Jardine C&C expects the first half result to continue into the second half.
At the current price of $39.68, Jardine C&C is trading at a price to earnings (P/E) ratio of 14.9.
The next company on the list is Challenger Technologies Limited (SGX: 573).
Challenger Technologies is an information technology (IT) lifestyle retailer of personal computers, notebooks, printers, tablets and mobile devices. The company operates through three segments, which include IT products and services, electronic signage services, and telephonic call centre and data management services.
In the company’s latest quarterly results, revenue was down year-on-year by 14% while net profit was up 2%. The decline in revenue was due to decrease in retail sales and trade show sales, offset partially by increase in corporate sales.
On a positive note, Challenger managed to improve profitability (despite lower sales) by improving efficiency and reducing cost.
Going forward, this is what the company aims “focus on improving our omnichannel experience and deliver better experiences to our online shoppers”.
At a current price of $0.42, Challenger is trading at a dividend yield of 6.4%.
The last company on our list today is Sheng Siong Group Ltd (SGX: OV8).
Sheng Siong one of the largest supermarket chains in Singapore. The company’s network of 42 stores is primarily located at the heartlands of the island. The company was established in 1985 and listed in 2011.
In its latest quarterly results, the group delivered a growth of 6.8% in revenue as compared to the same period last year. Furthermore, gross profit margin improved from 26.1% last year to 26.6% this year. Earnings per share also grew during the quarter, up by 5.9% as compared to the same period last year.
Despite the better results, the market seems unexcited, pushing Sheng Siong’s share price lower for the year. One speculation here is that investors might perceive the business outlook to be less positive since competition in the supermarket industry remains keen.
At $0.915, Sheng Siong is trading at a P/E ratio of 21.5.
A Foolish conclusion
It’s worth noting that not every company with a stock price near a 52-week low is a legitimate bargain. A declining stock price can decline yet further if the underlying business performance continues to weaken.
Nothing we’ve seen here about Jardine C&C, Challenger and Sheng Siong should be taken as the final word on their investing merits. The information presented in this piece should be viewed only as a useful starting point for further research.
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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 recommendation for Hongkong Land.