Our retail research team has created 3 stock lists, namely Growth, Value and Yield.
|The Growth List comprises of small-mid capitalisation companies with business catalysts which will potentially grow their earnings in the near future. The Growth portfolio would be suitable for investors looking for higher returns and are willing to tolerate the risk of higher short-term volatility of stock prices.|
|The Value List focuses on companies which are undervalued based on their share prices as compared to the company fundamentals. It would be suitable for conservative investors who prefer price stability and have a longer investment horizon.|
|The Yield List comprises of stocks that provide consistent dividend pay-out. It would be suitable for investors whose primary focus is to gain regular dividend income from their investments.|
January Market Overview
The STI got off to a strong start in 2018 with a Jan gain of 3.9%, buoyed by broad-based rally mainly across industrial conglomerates (Keppel Corp, SCI), tech manufacturers (Venture Corp), property (CapitaLand, City Dev) and financials (SGX, DBS).
Against this backdrop, our Growth, Value, Yield (GVY) basket of stocks achieved a handsome average return of 8.9%. Excluding the outperforming outlier, AEM Holdings (+48.4%), the portfolio still returned 6.2%, beating the benchmark index by a good margin.
Growth List +13.1% YTD
The Growth portfolio was boosted mainly by the stellar performance of AEM following its positive profit guidance, backed by growing order book, higher sales, better product mix and operational efficiency.
China Sunsine also chalked up double-digit gains due to improved visibility and better valuations, following coverage from two local brokers in Jan.
Hi-P was included in the portfolio last month as we believe the ODM and EMS solutions provider is set to continue its earnings trajectory in 2018
Value List +3.1% YTD
Water treatment player SIIC Environment led the performance for the Value portfolio after it successfully obtained shareholders' approval for its proposed dual primary listing in HK.
This is anticipated to improve valuations given higher relative pricing in HK.
Yield List +5.5% YTD
We exited Micro-Mechanics from the Yield basket last month following release of below-par 2QFY18 results.
While earnings momentum remains strong (1HFY18: +34.6%, FY18E: +18.7%), rising headwinds stemming from the depreciating USD, which accounts for half its revenue, could be a drag going forward.
Following its recent share price run-up, dividend yield has dropped below 4%, making its valuation no longer compelling.
Note: *Including dividends
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