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15 Best Shares for July 2019 and Beyond: A Behind-The-Scenes Look

Earlier this week, we looked at 15 shares that could outperform the Singapore stock market in July 2019 and beyond. The stocks were selected using the Magic Formula investing strategy made famous by investor and author, Joel Greenblatt.

The top five shares shown in that article were:

  1. Noble Group Limited (SGX: CGP)
  2. China Sunsine Chemical Holdings Ltd (SGX: CH8)
  3. Valuetronics Holdings Limited (SGX: BN2)
  4. Delong Holdings Limited (SGX: BQO)
  5. Yangzijiang Shipbuilding Holdings Ltd (SGX:BS6)

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 check out 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 28 June 2019 — for each of the 15 companies:

Company Share Price (S$) Earnings yield ROIC
Noble Group Limited 0.081 58.44% 94.28%
China Sunsine Chemical Holdings Ltd 1.14 38.64% 48.53%
Valuetronics Holdings Limited 0.685 27.50% 94.91%
Delong Holdings Limited 5.9 57.40% 29.47%
Yangzijiang Shipbuilding Holdings Ltd 1.53 28.13% 28.63%
InnoTek Ltd 0.52 40.44% 23.14%
Best World International Limited 1.36 17.33% 662.47%
AEM Holdings Ltd 1.03 18.10% 91.37%
HRnetGroup Ltd 0.7 14.94% 116.34%
Meghmani Organics Limited 1.26 19.84% 27.45%
Cortina Holdings Limited 1.48 20.26% 26.37%
Challenger Technologies Limited 0.53 15.96% 44.10%
TPV Technology Limited 0.41 37.38% 16.41%
Hour Glass Ltd 0.765 22.85% 20.02%
Spindex Industries Ltd 0.9 22.49% 19.41%

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 15 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 AEM Holdings Ltd and HRnetGroup Ltd. Motley Fool Singapore contributor Sudhan P owns shares in HRnetGroup Ltd.