4 Singapore Blue Chip Shares Are Trading Near 52 Week Lows: Should You Buy?
We often hear of investors reacting with desperation when their stocks have hit a 52-week low.
But things may not always be as bad as they seem.
One popular method of finding great deals is to browse the 52 week low list.
Both sentiment and corporate fundamentals play a role in falling stocks to their all-year lows.
If weak sentiment is at play, then you might be looking for a valuable opportunity to accumulate stock in a quality company that has been unfairly beaten.
That said, it’s important to observe the state of the business and look at a few key financial metrics to determine if these actions are indeed a good deal.
Same blue chip companies are not immune to such dives.
Here are four that are trading near their 52-week lows that you can potentially add to your watchlist.
ComfortDelGro Corporation Limited (SGX: C52)
ComfortDelGro, or CDG, is one of the largest ground transportation companies in the world with a fleet of approximately 40,000 buses, taxis and rental vehicles.
The group operates in seven countries: Singapore, Australia, China, United Kingdom, Ireland, Vietnam and Malaysia.
Shares of the transport giant recently hit a 52-week low at S $ 1.47 and are down about 12% year-to-date.
That said, the taxi operator’s recent results have been decent, coming out of last year’s weak base.
The group announced an improvement in its profits for its third quarter of fiscal 2021 (3Q2021), with revenue up 7.4% year-on-year to reach S $ 880.3 million.
Net profit rose 19.4% year-on-year to S $ 25.8 million despite a sharp decline in government COVID-19 relief.
In Singapore, public transport ridership has remained at around 60% of pre-pandemic levels.
At the same time, CDG is pursuing other initiatives.
The transport operator recently announced that its wholly-owned private bus company has won a S $ 30 million contract to operate Singapore’s largest fleet of electrified private buses at the National University of Singapore.
The group also acquired a property in Brentford, London, for around S $ 6.5 million to develop a new bus garage.
Keppel DC REIT (SGX: AJBU)
Keppel DC REIT is a data center REIT which has a portfolio of 19 data centers in eight countries worth approximately S $ 3.1 billion.
Its units recently hit a 52-week low at S $ 2.32 and are down 15% year-to-date.
Despite the lower unit price, the REIT posted encouraging growth in its distribution per unit (DPU) for 3Q2021.
Gross revenue increased 2.5% year-on-year to S $ 69.3 million, while DPU increased 4.5% year-on-year to S $ 0.02462.
Keppel DC REIT also recently announced two acquisitions: a data center in the Netherlands and its first acquisition data center in Guangdong, China.
In addition, the manager of the REIT has also agreed to subscribe for bonds and preferred shares issued by M1, a subsidiary of Keppel Corporation Limited (SGX: BN4).
All of these transactions should increase his DPU over time.
Wilmar International Limited (SGX: F34)
Wilmar is a leading agribusiness group with an integrated business model that spans the entire commodity value chain.
The group has more than 500 manufacturing plants and an extensive distribution network covering China, India, Indonesia and 50 other countries.
Wilmar’s shares closed at S $ 4.22 recently, not far from their 52-week low at S $ 4.04.
The commodities giant recently reported a bullish profit set for 3Q2021, with revenue up 28.7% year-on-year to $ 17.1 billion.
Basic net income increased 15% year-on-year to US $ 576.4 million.
The group also declared an interim dividend of S $ 0.05 last quarter, its highest interim dividend since listing.
Singapore Exchange Limited (SGX: S68)
Singapore Exchange Limited, or SGX, is Singapore’s sole stock exchange operator.
Shares of the exchange trader are down nearly 24%, from an annual high of S $ 12.05 to S $ 9.18, and are trading just below its 52-week low of 8 , $ 89 S.
The group reported a bad set of earnings for its 2021 fiscal year ended June 30, 2021, acquisition-related charges weighing on its net income.
In addition, a sense of weakness surrounded the operator of the Singapore Stock Exchange as a competitor, Hong Kong scholarships and compensation (SEHK: 0388), offered its first A-share derivative contract which began trading in October.
However, SGX continued its initiatives to develop its business.
SGX also announced a partnership with Changi Airports International to launch an index that captures long-term growth related to aviation and travel.
Get Smart: The Importance of Dividends
Low stock prices are attractive business.
But as smart investors, we need to look beyond short-term price movements and focus on the business.
Fortunately, all of the companies except CDG have continued to pay uninterrupted dividends over the past 23 months.
This is something we appreciate here at The Smart Dividend Portfolio.
The regularity of dividends is the first sign that the company has the financial means to maintain dividends.
But this is not the end of the analysis.
At The Smart Dividend Portfolio, we’ve taken our research deeper, examining the sustainability of the business, its ability to generate sufficient cash flow, and the company’s willingness to share its loot with investors like you and me.
Basically, we are looking for stocks that can pay us for life.
We document all of our work in detailed case studies that we can refer to in the future to check on our progress.
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Disclaimer: Royston Yang owns shares of Keppel DC REIT and Singapore Exchange Limited.
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