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30 Best Shares in August 2019 and Beyond: A Behind-The-Scenes Look

Recently, we explored 30 shares that could outperform the Singapore stock market in August 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 31 July 2019 — for each of the 30 companies:

Company Share Price

(S$)

Earnings yield  

ROIC

 

Noble Group Limited 0.081 58.44% 94.28%
China Sunsine Chemical Holdings Ltd 1.13 39.24% 48.53%
Valuetronics Holdings Limited 0.655 30.34% 94.74%
Delong Holdings Limited 6.99 51.44% 27.78%
Yangzijiang Shipbuilding (Holdings) Ltd 1.43 32.72% 28.63%
Best World International Limited 1.36 17.33% 662.47%
InnoTek Limited 0.52 40.44% 23.14%
HRnetGroup Limited 0.69 15.33% 116.34%
Meghmani Organics Limited 0.991 22.30% 25.65%
AEM Holdings Ltd 1.18 15.36% 91.37%
Cortina Holdings Limited 1.42 21.45% 26.55%
Challenger Technologies Limited 0.555 15.00% 44.10%
TPV Technology Limited 0.431 35.77% 16.41%
Spindex Industries Limited 0.93 21.40% 19.41%
Hock Lian Seng Holdings Limited 0.335 25.57% 15.89%
The Hour Glass Limited 0.845 20.01% 20.11%
Straco Corporation Limited 0.755 12.66% 40.07%
Lung Kee (Bermuda) Holdings Limited 0.464 22.43% 14.75%
Chuan Hup Holdings Limited 0.27 31.72% 13.41%
Fortress Minerals Limited 0.24 11.27% 40.92%
Venture Corporation Limited 15.54 11.61% 26.06%
Sinopec Shanghai Petrochemical Company Limited 0.806 10.73% 33.00%
Hi-P International Limited 1.39 11.49% 25.22%
JB Foods Limited 0.625 14.88% 15.76%
Fu Yu Corporation Limited 0.225 13.90% 15.12%
Nera Telecommunications Ltd 0.28 12.20% 19.07%
Frencken Group Limited 0.715 13.80% 15.16%
Golden Energy and Resources Limited 0.21 14.19% 14.74%
Micro-Mechanics (Holdings) Ltd 1.58 8.75% 45.12%
Aspen (Group) Holdings Limited 0.125 14.31% 13.59%

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 30 shares further to find ideas that suit their individual investing preferences.

Want to keep reading and learn more from The Motley Fool? There are many important things we think every Singaporean investor should know before jumping into stock picking—and we’ve laid them all out in our eBook, which we think will help you become a Smarter, Happier and Richer investor. You can download the full e-book FREE of charge here

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 HRnetGroup Ltd, AEM Holdings Ltd, Straco Corporation Limited and Micro-Mechanics (Holdings) Ltd. Motley Fool Singapore contributor Sudhan P owns shares in Straco Corporation Limited and Micro-Mechanics (Holdings) Ltd.