Over the long run, share prices will rise in tandem with an increase in business value.
Investors that park their money in strong, growing businesses can, therefore, enjoy healthy capital gains if the underlying business performs well.
They may also receive dividends that can act as a source of passive income to fatten their bank accounts.
One way to spot companies that are doing well is to scan through the list of stocks hitting their 52-week highs.
These businesses could be doing well but investors need to ensure that the growth is sustainable in the long term.
Otherwise, such stocks could end up being value traps.
Here are three stocks that hit a new year-high recently and could be good candidates for your buy watchlist.
Food Empire Holding (SGX: F03)
Food Empire is a company in the food and beverage (F&B) sector that produces a wide variety of snack foods and beverages such as instant coffee, bubble tea, and cereal mixes.
The group’s products are sold in more than 50 countries and it has 23 offices worldwide with eight manufacturing plants in five countries.
The F&B giant’s share price has been on a tear and is up 83% in one year to hit S$0.86, close to its year-high of S$0.88.
The group has pulled off an admirable performance for 2022 despite the outbreak of the Russia-Ukraine war.
Revenue climbed 24.5% year on year to US$398.4 million with gross profit jumping 26.9% year on year to US$118.8 million.
Net profit more than tripled year on year to US$60.1 million, partly due to the gain on the sale of a property of US$15.3 million.
Of note, revenue for Russia shot up 29.1% year on year to US$148.4 million while that of Ukraine, Kazakhstan and CIS was up 28.6% year on year to US$91.5 million.
In line with the robust results, Food Empire declared a first and final dividend of S$0.044 for 2022, double what it paid out in the previous year.
For 2023, Vietnam is projected to grow its revenue as the country sees high demand for the group’s instant coffee mixes and potato chips.
In addition, Food Empire is also expanding its non-dairy creamer facility in the country and this new capacity is slated to begin production in the fourth quarter of this year.
Genting Singapore (SGX: G13)
Genting Singapore owns and operates the integrated resort (IR) at Resorts World Sentosa (RWS).
The IR spans 49 hectares and features six hotels with around 1,600 rooms, a casino, a Universal Studios theme park, and one of the world’s largest aquariums.
Genting Singapore’s share price has risen by 38.2% in the past year, hitting a 52-week high of S$1.05.
The IR operator reported a sparkling set of earnings for 2022 and doubled its final dividend to S$0.02 as tourists flocked back to its attractions.
The group is cautiously optimistic for a full recovery this year and its RWS 2.0 expansion project has commenced with the ongoing construction of the Singapore Oceanarium, a new attraction (Minion Land) at Universal Studios Singapore, and additional infrastructure to support this expansion.
A new theatre will open this month featuring art and visual reality while May will see the re-launch of a newly-renovated Festive Hotel that will add 389 rooms to Genting Singapore’s hotel room inventory.
Samudera Shipping Line Ltd (SGX: S56)
Samudera Shipping is engaged in the transportation of containerised and non-containerised cargo.
The group’s vessels ply trade routes that connect ports in Southeast Asia, the Indian subcontinent, the Far East, and the Middle East.
The shipping company has seen its share price shoot up 88% in a year, touching a 52-week high of S$1.42.
The group reported an impressive set of results for 2022 as cargo volumes surged along with freight rates.
Revenue surged by 88% year on year to US$990.6 million while operating profit soared 150.1% year on year to US$327.1 million.
Net profit more than doubled year on year from US$128.6 million to US$322 million.
Samudera also saw its free cash flow more than triple year on year from US$123.2 million to US$388.8 million.
Buoyed by the strong results, management has declared a final dividend of S$S$0.0075 along with a special bumper dividend of S$0.2425.
The total dividend for 2022 came up to S$0.32, more than double the S$0.14 paid out in 2021.
The group is taking delivery of four newbuild container vessels on long-term charter in the first half of this year.
However, it warned of weaker cargo demand and freight rates as a combination of geopolitical tensions and economic headwinds dampen consumers’ purchasing power.
In our latest Special FREE Report, we cover the best performing stocks and blue chips in the Singapore market in 2022. Look forward to 2023 as we cover the industries and sectors that are poised to do well in the year ahead. Click HERE to download for free now.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
