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. So what are the companies that have shown up on this week’s list? Here are three of them:
Source: SGX.COM; SGX StockFacts
Thai Beverage Public Company Limited (SGX: Y92) is the first company that we will look at in this article. As a quick introduction, Thai Beverage is a company operating in four different segments, namely, Spirits, Beer, Food, and Food Beverages.
For the full year ended 30 September 2018 (FY2018), Thai Beverage reported that revenue was up 20.9% year-on-year to THB 229.7 billion. Yet, EBITDA (earnings before interest, tax, depreciation and amortisation) declined by 19.8% to THB 36.2 billion. Similarly, net profit attributable to shareholders fell 46.3% year-on-year to THB 18.5 billion. Excluding one-off items, net profit attributable to shareholders would have dropped by 19.1% instead.
Thai Beverage announced a final dividend of THB 0.24 per ordinary share. Including THB 0.15 interim dividend paid, the total dividend per share for FY2018 was THB 0.39. This was down from THB 0.67 dividend per share paid in FY2017.
The next company here is Keppel Corporation Limited (SGX: BN4). As a quick introduction, Keppel Corporation a conglomerate with major business segments include Offshore and Marine, Property, Infrastructure, and Investment.
For the third quarter of 2018, Keppel Corp reported that its revenue fell by 19.9% year-on-year to S$1.30 billion. Similarly, operating profit declined by 8.9% year-on-year to S$270.4 million. As a result, Keppel Corp’s net profit attributable to shareholders slid 14.9% to S$225.67 million.
Keppel Corp’s revenue declined mainly because of a lower revenue from the Property segment; lower property trading activities took place in Singapore, China, and Vietnam. Meanwhile, a fall in contributions from the Investments and Property segments were big culprits for Keppel Corp’s lower profit in the third quarter of 2018. Stronger performances in the Infrastructure and Offshore & Marine divisions provided some offset. Despite lower profitability, Keppel Corp managed to improve its balance sheet on a year-on-year basis: The conglomerate’s net debt declined from S$6.25 billion a year ago to S$4.84 billion.
SPH REIT (SGX: SK6U) is the last company that we will look at in this article. As a quick introduction, SPH REIT owns retail malls in Singapore such as Paragon, The Clementi Mall and The Rail Mall.
For the quarter ended 31 August 2018, SPH REIT reported that gross revenue grew marginally by 0.2% year-on-year to S$53.0 million while net property income fell by 1.9% to S$41.0 million. Distribution per unit was up by 0.7% as compared to a year ago to 1.43 cents. On 28 June 2018, SPH REIT completed the acquisition of The Rail Mall for around S$63.2 million.
As of 31 August 2018, the REIT’s gearing stood at 26.3%, which is a safe distance from the regulatory ceiling of 45%.
Susan Leng, chief executive of the SPH REIT’s manager, said:
“SPH REIT has delivered yet another year of consistent returns to our unitholders and our well-positioned assets continued its track record of close to full occupancy. The resilient performance for five years since listing in 2013 amid retail sales downturn, is a testament to our long-standing philosophy of partnership with our tenants for mutual success. We are pleased that our tenants have registered higher sales and lower occupancy cost.”
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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.