Investors love a great bargain in the stock market.
The market sometimes provides us with a Great Singapore Sale where we can buy stocks on the cheap.
By doing so, we increase the chances of obtaining a favourable outcome in the long run.
That said, it pays to be wary of value traps.
Some companies are hitting a low because their business may be floundering or they may have temporarily hit a rough patch.
It’s important to tell these two scenarios apart as the former will cause more heartache but the latter represents a great opportunity to accumulate.
Here are four Singapore stocks that recently hit their 52-week lows.
We provide the facts but you need to decide if these stocks may be suitable for your portfolio.
Keppel Pacific Oak US REIT (SGX: CMOU)
Keppel Pacific Oak US REIT, or KORE, invests in commercial assets in key growth markets in the US.
Its portfolio comprises 15 freehold office buildings and business campuses across nine US states with a total asset value of US$1.45 billion as of 30 June 2022.
KORE’s share price has tumbled around 18% year to date and has hit a 52-week low of US$0.66.
The office REIT reported a steady set of earnings for its fiscal 2022’s first half (1H2022).
Gross revenue rose 8.4% year on year to US$74.1 million while net property income (NPI) increased by 5.9% year on year to US$43 million.
Distribution per unit (DPU), however, fell by 4.4% year on year to US$0.0302, with part of the reason being that the manager’s base fee for the second quarter is being paid entirely in cash rather than in units of KORE.
The REIT maintains a high portfolio committed occupancy of 92%.
Its aggregate leverage stands at 37.2% with an all-in average cost of debt of 2.88%. 77.1% of the KORE’s total borrowings are on fixed rates.
However, if the borrowings are refinanced, the average cost of debt will rise to 3.15%.
Manulife US REIT (SGX: BTOU)
Manulife US REIT, or MUST, owns a portfolio of 12 freehold office properties in the US valued at around US$2.2 billion as of 31 December 2021.
The commercial REIT has seen its unit price tumble 20.9% year to date to a 52-week low of US$0.53.
1H2022 saw gross revenue rise 10.6% year on year to US$100.4 million while NPI inched up 2.8% year on year to US$57.6 million.
DPU dipped by 3.3% year on year to US$0.0261.
MUST reported 90% occupancy for its portfolio but physical occupancy only came in at around 28%.
The commercial REIT’s gearing is on the high side at 42.4% as of 30 June 2022 but more than 85% of its loans are on fixed rates.
Around 96% of MUST’s portfolio has rental escalations incorporated into its tenancy agreements that should see a 2.2% per annum uplift in rental income.
Yangzijiang Financial Holding Ltd (SGX: YF8)
Yangzijiang Financial, or YZJF, is an investment management company that invests in public and private companies, debt investments, and funds.
The group also provides wealth management services to clients and generates fee-based income through fund management activities.
Since it was spun off from parent Yangzijiang Shipbuilding Holdings Ltd (SGX: BS6) back in April, its share price has tumbled 43% to a 52-week low of S$0.35.
YZJF reported a 27.3% year on year fall in total income to S$173.8 million due to a fall in the fair values of financial assets that it holds.
Net profit tumbled by 30.6% year on year to S$136.4 million.
As of 30 June, close to 90% of YZJF’s investments are in China, with the remainder parked in Singapore.
The group’s medium-term target is to reduce its debt investment in China from the current 70% to just 30% while increasing its investment proportion in Singapore to around half of the portfolio.
Top Glove Corporation Berhad (SGX: BVA)
Top Glove is the world’s largest manufacturer of gloves with 49 factories capable of producing 100 billion pieces per annum as of 9 June 2022.
The group exports to more than 195 countries worldwide and employs 22,000 staff.
Top Glove’s share price has weakened by nearly 68% this year, falling from S$0.78 to a 52-week low of S$0.25.
For the first nine months of fiscal 2022 (9M2022) ended 31 May, Top Glove saw its revenue plummet 68.5% year on year to RM 4.5 billion as glove demand normalised with higher global vaccination rates.
Net profit plunged by 96% year on year to RM 288.6 million.
Average selling prices continued to decline but at a slower pace, and the poor results were due to the inability of the group to fully pass on higher costs.
In light of lower demand, Top Glove is deferred and reducing capital expenditure in the near term until the glove oversupply situation eases.
Not sure which REIT to put your money in? Use our 7-step REIT checklist to find one that fits into your retirement plan. Checklist is inside our latest FREE report “Singapore REITs Retirement Plan”. Click here to download it now.
Disclaimer: Royston Yang does not own shares in any of the companies mentioned.