From the end of 2018 till 30 April 2019, the Straits Times Index (SGX: ^STI) has rallied some 11%, blowing past the 3,400 mark. If you are wondering what stocks you can consider for your portfolio amid the stock market rally, look no further. Using our data provider, S&P Global Market Intelligence, and a Magic Formula methodology popularised by Joel Greenblatt, we have found some of the best stocks for the month that could go on to perform well.
The basic premise of the Magic Formula is to find the 30 best shares in the market as ranked by their cheapness and quality, and to hold on to that basket of shares for a year before repeating the ranking process. For a deeper understanding of how the formula works, here’s an article explaining the strategy.
With that, here’s a list of the top 10 out of those 30 stocks in Singapore’s stock market for May 2019:
- Noble Group Limited (SGX:CGP)
- Delong Holdings Limited (SGX:BQO)
- China Sunsine Chemical Holdings Ltd (SGX:CH8)
- Haw Par Corporation Ltd (SGX:H02)
- Valuetronics Holdings Limited (SGX:BN2)
- Yangzijiang Shipbuilding Holdings Ltd (SGX:BS6)
- Stamford Land Corporation Ltd (SGX:H07)
- AEM Holdings Ltd (SGX:AWX)
- InnoTek Ltd (SGX: M14)
- Challenger Technologies Limited (SGX: 573)
As seen, the Magic Formula could throw up companies that look dubious. That is why diversification is essential when using this strategy. For important lessons learnt from previous exercises, you can check out the post here.
This latest exercise merely aims to provide some stock ideas for investors who are looking to do better than the market average. Take it as a stock screener where you screen for a specific set of criteria. It is not a recommendation to buy any of the stocks. Investors should carry out their own research before purchasing any of the companies mentioned.
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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 Haw Par Corporation and AEM Holdings Ltd. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.