Tuesday, September 25, 2018

Possible value buy opportunity in the Singapore market

From the desk of Sagar Nandi and Superior Profit

Singapore CPF (Central Provident Fund) allows investment in a selected list of about three hundred Singapore listed stocks. Not all of them are suitable for investment for an investor. It may be worthwhile looking for solid investment opportunities from this list of stocks and invest a portion of CPF fund in such stocks. One may also use a personal non-CPF account to invest in such stocks. If the investment decision is made based on the sound analysis, it is likely that over time the investors will reap significant gain. One secret of trying to ensure such profits is to buy low and sell high. Easy to say. However, not so easy to practice as many may have found out. Here is one approach that may be of significant value. This approach looks for value stocks that are starting to go up.
Value investors may have a list of stocks in mind that are robust (non-speculative) and professionally managed. Sometimes due to industry and market undercurrents, such stocks may fall and become value buy opportunities. Even if a stock is a value stock, it is wiser not to buy it while it is still falling. A more effective approach is to wait until such a stock starts to go up and then take a position in the stock.
Following this approach, you might attempt to buy a robust stock just as it starts to go up from the bottom. Trying to buy it at the low or lowest price level. If the stock pays a respectable dividend yield %, then it is even better. Key to this approach is the ability to know when a stock is value stock and when a share has started to go up from a low level.
How does one know that a stock has fallen a lot? Using CUE technical trading systems that is easy to identify using the Price Extreme or Pendulum chart template. The stock will show up in red or magenta color if the stock has dropped a lot. Starhub (STAR.SI is the Thomson Reuters symbol) is showing up in red color, representing a significant drop in the stock. The fact that at the right edge the chart color has changed from magenta to red shows that the stock is starting to recover.

Starhub has evidently dropped a lot. What about its fundamental strength? CUE Vital allows you to do a fundamental and peer analysis in one minute using real-time data. Here is the result for Starhub. It is making money (EPS is positive). And pays a hefty dividend yield of 9.58%. That is much higher than the usual return from CPF account and is also significantly higher than Singapore fixed deposit interest rates. 

The dividend yield itself may make the stock appealing to many investors looking for a steady return. However, you will do better if you ensure that the stock is a value stock at the current price level. How do you know that it is a value stock now? You can know that from the CUE Vital Peer Analysis. CUE Vital can carry out such peer analysis in real-time for global stocks. For value stocks, the Primary Valuation Score will be higher, and it will be in cyan, as is the case for Starhub.  As you can also see, among the sector peers, Starhub’s valuation score is highest (the best), and its dividend yield % is the highest as well.

Well, so far we have ascertained that Starhub had dropped a lot to attract the value investor’s attention and that it is indeed a value stock. How do we know that it is starting to go up? There are several ways. One way is to apply the CUE systems unambiguous checklists to see if a valid buy set-up exists. Another way is to look for specific movement patterns using CUE Sonar scans. A logical low-risk CUE trade setup is not there at the time of writing this post. However, it is getting closer to that. Let’s have a look at Starhub using CUE weekly-daily charts. From the weekly-daily chart below you can see that 
(1) The weekly had displayed a possible reversal signal several weeks ago, and so far that low has not been breached.
(2) Weekly backdrop candle color has now turned cyan, i.e., bullish. 
(3) Weekly has displayed a series of bull-release green arrows that shows that the bearish pressure is now relinquished.
(4) The bullish Headwind in daily pointed to possible reversal and after that stock did not fall much.
(5) The series of green smileys in the daily chart shows that the stock is a value buy from a technical point of view.
(6) The movement indicators comprising of Acceleration, Speed and Momentum have all turned green, bullish, several days ago.
(7) The ascending Relative Performance line is showing that Starhub is out-performing the broad market and 
(8) At the right edge, daily candle color is green, bullish, and the price is just below the auto-smart resistance Memory trend line. 
All signals look bullish except the fact that price is just below the Memory resistance. If Starhub can close above that resistance, it may give a low-risk buy opportunity where the risk, i.e., stop loss, will be very narrow. Note that while analyzing the chart, you did not have to set any parameter or compare indicator values with thresholds or squint your eyes to look for convergence/divergence. You only looked at the intuitive colors and lines (green and cyan are bullish, and an ascending line is bullish) to make a sound decision on the stock’s technical state. And whether a novice or experienced trader is looking at the charts, they would come to the same conclusion, making the system unambiguous and easy to use.

In a few minutes, using CUE fundamental, peer and technical analysis you could identify Starhub as a value buy opportunity that is not ready yet but getting closer.
Are there similar other value buy opportunities in the Singapore market? Probably yes. As of this post, there are more than sixty stocks in the CPF approved list of stocks that are value stocks in CUE Scorecard. What about high dividend yield stocks? Currently, there are more than sixty-five stocks in the CPF approved list of stocks that pay a dividend yield of 5% or higher. Again, you could find these stocks in minutes (well, in seconds, really) using CUE Scorecard. 
Could you look for high growth stocks? Yes. You could do that also using a few mice clicks. 
You could also use CUE Sonar technical scans to look for stocks that are at a buy-point.
Whatever be your style, value investor, a growth investor, fundamental investor or technical investor, you would find the CUE systems of immense value in decision making based on robust data, unambiguous and easy to use intuitive and color-coded systems.
If you would like to receive a list of CPFIS approved stocks’ scorecard as of today, that contains much more than the vital statistics presented above, feel free to send us a note using the Contact form (https://superiorprofit.co/contact.html). We will be obliged to send you a copy of the same.