There are many ways to find investment ideas. Some useful ways are to screen for stocks or to look at a list of stocks near their 52-week lows to sieve out potential stock bargains. Studying what institutional investors have been buying or selling is another avenue. Institutional investors are typically large investment organisations, such as hedge funds, mutual funds, unit trust companies, sovereign wealth funds, insurance companies and so on. These investors tend to possess vastly greater resources than individual investors like you and me when researching stocks. Hence, it may be useful to keep a close eye on what…
There are many ways to find investment ideas. Some useful ways are to screen for stocks or to look at a list of stocks near their 52-week lows to sieve out potential stock bargains. Studying what institutional investors have been buying or selling is another avenue.
Institutional investors are typically large investment organisations, such as hedge funds, mutual funds, unit trust companies, sovereign wealth funds, insurance companies and so on. These investors tend to possess vastly greater resources than individual investors like you and me when researching stocks. Hence, it may be useful to keep a close eye on what they are doing, as a way to generate ideas.
In this article, I will look at three Singapore stocks (among the top ten stocks) that have seen the highest net disposal in dollar value by institutional investors for the week ended 11 January 2019. They are: GSH Corporation Ltd (SGX: BDX), CapitaLand Mall Trust (SGX: C38U) and ComfortDelgro Corporation Limited (SGX: C52).
Source: Singapore Exchange; SGX Stock Facts
The first company that saw its shares sold off by institutional investors is GSH Corporation.
GSH Corporation growing property developer in Southeast Asia, with three properties under development in Kuala Lumpur and Kota Kinabalu, Malaysia. It also owns the Sutera Harbour Resort in Kota Kinabalu, comprising two five-star hotels – the Pacific Sutera and Magellan Sutera Resort, a 104-berth marina and 27-hole championship golf course.
Last week, GSH Corporation has seen its major shareholder and executive chairman, Sam Goi Seng Hui, raised his stakes in GSH Corporation from 50.01% to 56.47% in a number of separate transactions. In other words, the majority of institutional investors’ shares were sold to the major shareholder. According to businesstimes.com.sg , Mr Goi has gradually increased his stake in the property developer from 47.32% at the end of 2014.
Given the majority stake that Mr Goi has in the company, minority investors should be comfortable with his vision for the company before investing in this company.
The next company that saw its shares sold off by institutions recently is Capitaland Mall Trust, otherwise known as CMT. As a quick introduction, CMT is a real estate investment trust (REIT) that focuses on investing in income producing real estate, which is used for retail purposes.
It currently has 15 properties, which are located in the suburban areas and the downtown core of Singapore. Example of properties includes Tampines Mall, Junction 8, Funan, IMM Building, Plaza Singapura, Bugis Junction and others.
In the last quarter ended 30 September 2018, CMT reported that gross revenue was up 0.7% year-on-year or S$170.5 million. Similarly, net property income grew 1.1% year-on-year to S$122.7 million. Consequently, distribution per unit grew 5.0% year-on-year to 2.92 cents. The improvement in performance was driven by higher revenue from Junction 8, IMM Building, Plaza Singapura, Bedok Mall and Tampines Mall. CMT is expected to announce its 2018 fourth quarter and full year result next week.
As at 30 September 2018, the REIT clocked in a gearing ratio of 31.7% while its occupancy rate stood at 98.5%.
The last company with significant net selling by institutional investors is ComfortDelgro, a transport company with operations mainly in Singapore, Australia, the United Kingdom, and China.
For the quarter ended 30 September 2018, Comfortdegro delivered an 8.5% year-on-year improvement in revenue to S$ 967.9 million. Yet, its profit attributable to shareholders fell by 2.0% year-on-year to 78.5 million. Similarly, the Comfortdegro earnings per share (EPS) fell by 1.9% year-on-year to 3.63 cents.
ComfortDelGro Group CEO, Mr Yang Ban Seng, commented:
“Organically, our Singapore and overseas public transport business continued to do well with higher mileages operated. The Singapore Taxi Business has shown slight improvement compared to the last quarter. Our inorganic growth has been strong. The acquisitions earlier in the year have started to contribute. For this year, we have invested over $450 million in new acquisitions in Singapore, Australia, the United Kingdom and China. We will continue to be on the lookout for opportunities to grow the business.”
Looking at what institutional investors are doing could be a useful tool in your toolkit when sourcing for investment ideas. But do note that the information presented here is by no means a recommendation to take any action on the stocks mentioned. Instead, it 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 Singapore has a recommendation for Capitaland Mall Trust.