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30 Best Shares for December 2018 and Beyond: A Behind-The-Scenes Look

Yesterday, I shared with readers 30 shares that could outperform the Singapore stock market for this month and beyond. The stocks were selected using the Magic Formula investing strategy that was made famous by investor and author, Joel Greenblatt.

The top five stocks shown in that article were:

1) Noble Group Limited (SGX:CGP)

2) Lung Kee (Bermuda) Holdings Limited (SGX: L09) (SEHK: 255)

3) China Sunsine Chemical Holdings Ltd (SGX:CH8)

4) Aspen (Group) Holdings Limited (SGX:1F3)

5) Delong Holdings Limited (SGX:BQO)

The strategy behind the Magic Formula is to pick the stocks with the highest quality (the ones with the highest returns on invested capital) at the lowest price (the ones with the highest earnings yield). For an in-depth discussion on what goes into the Magic Formula, you can head to my colleague Chong Ser Jing’s article here.

The following table shows the share price, earnings yield, and return on invested capital (ROIC) — as of 30 November 2018 — for each of the 30 companies:

Source: S&P Global Market Intelligence (Note: Share prices denominated in other currencies have been converted to Singapore dollars)

Using the above table, investors can (if they wish to) add additional figures such as the free cash flow yield and dividend yield to screen the 30 stocks further to find ideas that suit their individual investing preferences.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of AEM Holdings Ltd, Straco Corporation Ltd, Boustead Singapore Limited and HRnetGroup Ltd. Motley Fool Singapore contributor Sudhan P owns shares in Straco Corporation Ltd, APAC Realty Limited and Boustead Singapore Limited.