The Straits Times Index (SGX: ^STI) has been falling of late, mainly due to trade tensions between the US and China. Foolish investors would see the market weakness as an opportunity to pick up some cheap shares. So, what are some of the shares to consider for your portfolio right now?
We found some stocks using our data provider, S&P Global Market Intelligence, and a Magic Formula methodology popularised by Joel Greenblatt. The basic premise of the Magic Formula is to find the 30 best shares in the market as ranked by their cheapness and their 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.
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With that, here’s a list of the top 15 out of those 30 stocks in Singapore’s stock market for June 2019:
- Noble Group Limited (SGX: CGP)
- Valuetronics Holdings Limited (SGX: BN2)
- China Sunsine Chemical Holdings Ltd (SGX: CH8)
- Delong Holdings Limited (SGX: BQO)
- AEM Holdings Ltd (SGX: AWX)
- Yangzijiang Shipbuilding Holdings Ltd (SGX:BS6)
- Best World International Limited (SGX: CGN)
- InnoTek Ltd (SGX: M14)
- Cortina Holdings Limited (SGX: C41)
- HRnetGroup Ltd (SGX: CHZ)
- TPV Technology Limited (SGX: T18)
- Meghmani Organics Limited (SGX: M30)
- Challenger Technologies Limited (SGX: 573)
- Hour Glass Ltd (SGX: AGS)
- ComfortDelGro Corporation Ltd (SGX: C52)
As seen from the above list, the Magic Formula could throw up companies that look shabby. That is why diversification is essential when using this strategy. For important lessons learnt from the previous exercises, you can check out the article here.
This exercise merely aims to provide some stock ideas for investors who are looking to do better than the market average. Take it like 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 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 AEM Holdings Ltd and HRnetGroup Ltd. Motley Fool Singapore contributor Sudhan P owns shares in HRnetGroup Ltd.