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, StockFacts
Fraser and Neave Limited (SGX: F99), or F&N, is the first company that we will look at. As a quick introduction, F&N is a consumer group with expertise in the food and beverage (F&B), and publishing and printing sectors.
For the full year ended 30 September 2018, F&N reported that revenue was up 1.5% year-on-year to S$1.9 billion. Similarly, EBIT (earnings before interest and tax) grew by 25.6% as compared to a year ago to S$213.5 million. As a result, net profit attributable to shareholders (excluding exceptional items) grew 46.3% year-on-year to S$121.7 million. The improvement in profitability was driven mainly by the dairy segment.
F&N proposed a final dividend of 3.0 cents per ordinary share. Including interim dividend paid, the total dividend per share for the 2018 full-year was 4.5 cents, unchanged from the previous year.
Koh Poh Tiong, chairman of the F&N board executive committee, said:
“F&N’s financial performance for FY2018 was creditable, taking into account the challenging business environment. Increasing input costs, declining consumer confidence as well as evolving consumer preference and behavior continued to impact the businesses this year. Nevertheless, our strong brands and focus on efficiency and cost control enabled us to remain competitive through these challenging times. Together with the advantages of a regional footprint, scale and distribution capabilities, these factors will continue to provide F&N with the firm foundation to build on the success in the years ahead.”
The next company here is a small cap company, Samurai 2K Aerosol Ltd (SGX: 1C3). As a quick introduction, Samurai 2K is an aerosol coating specialist with a focus on high performance coating solutions for the automotive refinishing and refurbishing industry, focusing on selling its own brands such as Samurai, Kurobushi, Khameleon and a few others. Its products are distributed mainly in Malaysia, Indonesia, Thailand , Philippines and United States.
For the first six months ended 30 September 2018, Samurai 2K reported that revenue was up by 12.8% year-on-year to RM 38.9 million. Similarly, profit before interest and tax jumped 32.4% year-on-year to RM 10.4 million. Consequently, net profit attributable to shareholders surged 30.8% to RM 8.4 million. The stronger performance was due to higher sales volume in Malaysia, as well as increase in average selling price by 12% in Malaysia and Indonesia.
Going forward, the group is exploring an expansion into India. Here’s what the company said:
“The Group is currently exploring expansion into the India market which is still an untapped market for aerosol spray paint. Every day there are 20 million new registered motorcycles on the road. The India market is about 5 times bigger than Indonesia market. The Company will make the necessary announcement on SGXnet as and when there are any material updates”
SPH REIT (SGX: SK6U) is the last company that we will look at in this article. As a quick introduction, SPH REIT is an owner of two retail malls in Singapore, namely, Paragon and The Clementi Mall. It also owns a leasehold interest in The Rail Mall. Newspaper publisher Singapore Press Holdings Limited (SGX: T39) is the sponsor, manager, and large unitholder of SPH REIT.
For the quarter ended 30 November 2018, SPH REIT reported that gross revenue grew marginally by 0.6% year-on-year to S$53.8 million. Yet, net property income fell by 1.0% to S$41.8 million. The weaker performance was due to lower revenue at Paragon, cushioned by higher contribution from The Clementi Mall and The Rail Mall. Distribution per unit (DPU) was flat as compared to a year ago at 1.34 cents.
Susan Leng, CEO of SPH REIT’s manager, said:
“We are pleased that SPH REIT continued to deliver steady distribution with overall positive rental reversion of 9.7% for 1Q 2019.
In line with our strategy of acquiring yield-accretive retail properties that provide sustainable returns to unitholders, SPH REIT completed the acquisition of 85% stake in Figtree Grove Shopping Centre, with our joint venture partner, Moelis Australia Limited holding the remaining stake. The property is an established sub-regional shopping centre in Wollongong, New South Wales, Australia and is a strategic fit with SPH REIT’s portfolio of quality assets. This acquisition provides SPH REIT with the opportunity to further create value and continue to deliver long term returns for unitholders. The full contribution from Figtree Grove Shopping Centre is expected in the second half of the year.”
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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.