Happy National Day! How has your portfolio been year to date?
With reference to my writeup published on 3 Jul 2022 (click HERE), I mentioned that there are likely to be opportunities in the next few weeks. Post my writeup, S&P500 touched an intraday low of 3,722 on 14 Jul before closing up 418 points or 11.2% at 4,140 yesterday. In fact, S&P500 posted its best monthly gain in July, since Nov 2020. STI touched an intraday low of 3,088 on 15 Jul before trading up 183 points or 5.9% at 3,271 yesterday. Our Singapore banks started to stage a breakout on 20 Jul as they approached their results.
For those who have missed the rally, is this over? Or are there some laggards which have not joined in the rally yet and may have scope for re-rating as they approach their results announcement?
To spot laggards or potential trading opportunities, a possible starting point may be here…
In line with my usual practice, I have sorted some Singapore listed stocks by total potential return using Bloomberg data as of the close of 29 Jul 2022.
I have generated two tables below and have appended the top 10 and bottom 10 stocks for readers. Table 1 lists the top 10 stocks sorted by highest total potential return. These top 10 stocks offer a total potential return of between 50 – 101%, based on the closing prices as of 29 Jul 2022. Most importantly, please refer to the criteria and caveats below. [My clients have already received the entire list of my compilation of 96 stocks and some highlighted stocks – see important note 4 below.]
Table 1: Top 10 stocks sorted by total potential return
Source: Bloomberg 29 Jul 2022
Table 2 lists the bottom 10 stocks sorted by total potential return. These bottom 10 stocks offer a total potential return of around -11% to +9%, based on the closing prices as of 29 Jul 2022.
Table 2: Bottom 10 stocks sorted by total potential return
Source: Bloomberg 29 Jul 2022
Criteria in generating the above tables
a) Mkt cap >= S$400m to potentially capture more market opportunities;
b) Presence of analyst target price.
Very important notes
a) This compilation is just a first level stock screening, sorted purely by my simple criteria above. It does not necessary mean that Oxley is definitely better than Wilmar in terms of stock selection. Readers are still required to do their own due diligence and form their own independent investment decisions;
b) Even though I put “Ave analyst target price”, some stocks may only be covered by one analyst hence may be subject to sharp changes. Also, analysts may suddenly drop coverage. Furthermore, Bloomberg may not have captured all the analysts’ target prices and some of these target prices may not be the most updated figures;
c) Analyst target prices and estimated dividend yield are subject to change anytime, especially after results announcement, or after significant news announcements;
d) In my list of 96 stocks above, I have highlighted some stocks in green (visible to my clients but not for readers) which my private banking clients and I are looking at. Naturally, as I have a limited portfolio size and bandwidth, I do not intend to buy all the highlighted stocks. However, some of my private banking clients have a bigger portfolio and hence they have the capacity to accumulate 10-20 stocks (not only limited to Singapore) with meaningful quantities. Notwithstanding this, we may change our stocks accordingly as variables change (e.g., newsflow on the specific stocks; prices have moved etc.)
e) The above stock prices and average analyst target prices are rounded to two decimal places.
Among the 96 stocks compiled, Comfort Delgro looks interesting
With reference to my writeup HERE, Comfort Delgro has been trading at low valuations for quite some time. However, coupled with its upcoming results (will be interesting to see CD’s results & outlook and whether it will hike its interim dividend) and a price chart which has been base building for 8 – 9 months, it may arguably be a good time to take a closer look at Comfort Delgro. Nevertheless, readers need to be aware of the risks. Please refer to my writeup HERE for more information.
Conclusion – opportunities abound
With reference to the above compilation of 96 stocks, suffice to say that if the analysts are right, there are indeed numerous opportunities to accumulate with meaningful potential upside.
Notwithstanding the above, as usual, I wish to caution that there are risks stemming from geopolitics; interest rate; inflation; supply chain constraints (which are easing somewhat but still present); a strong dollar etc.
Readers have to assess their own % invested, risk profile, investment horizon and make your own informed decisions. Everybody is different hence you need to understand and assess yourself. The above is for general information only. For specific advice catering to your specific situation, do consult your financial advisor or banker for more information
Readers who wish to receive my manual compilation of stocks sorted by total potential return can leave their contacts here http://ernest15percent.com/index.php/about-me/. I will send the list out to readers around 13 Aug 2022.
Readers who wish to be notified of my write-ups and / or informative emails, can consider signing up at http://ernest15percent.com. However, this reader’s mailing list has a one or two-day lag time as I will (naturally) send information (more information, more emails with more details) to my clients first. For readers who wish to enquire on being my client, they can consider leaving their contacts here http://ernest15percent.com/index.php/about-me/
P.S: Among the stocks highlighted in this write-up, I am vested in Comfort Delgro and Yangzijiang Financials for trading plays.
Please refer to the disclaimer HERE.