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10 Best Shares for May 2019 and Beyond: Behind-The-Scenes Look

Recently, we shared with readers 10 shares that could outperform the Singapore stock market in May 2019 and beyond. The stocks were selected using the Magic Formula investing strategy that was popularised by investor and author, Joel Greenblatt.

The top five shares shown in that article were:

  1. Noble Group Limited (SGX:CGP)
  2. Delong Holdings Limited (SGX:BQO)
  3. China Sunsine Chemical Holdings Ltd (SGX:CH8)
  4. Haw Par Corporation Ltd (SGX:H02)
  5. Valuetronics Holdings Limited (SGX:BN2)

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 April 2019 — for each of the 10 companies:Source: S&P Global Market Intelligence

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 10 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 Haw Par Corporation and AEM Holdings Ltd. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.