Sunday, October 26, 2014

Lowest Price to Earnings, Price to Book Singapore stocks.

I went through the SGX website and discovered that they have a new and useful section called StockFacts. This is part of the exchange's initiatives to encourage retail participation by providing research tool. The ratios were supplied by S&P Capital IQ.

Given that the information now exists, I decided to copy and paste the ratios of the listed copies for screening purpose.

I decided to multiply Price to Earnings (PE) against Price to Book Value (PB), and rank the listed companies. Based on hazy memories, academic research has shown that stocks with low PE, PB and high dividend yield are stocks that will give super returns, although they tend to be illiquid. Teh Hooi Ling narrowed it down to low PB and high ROE. I used PE in place of ROE since it is not provided by the website.

The lowest ten and twenty percent of stocks based on the product of their PE and PB are and  shown. Excluded from this list are REITS and property counters. The reason is that REITS will have much higher yield, and property counters are distressed now. 

The lowest decile.

The second lowest decile

Envictus is the lowest ranked stock - or with the deepest value - but this is because it had a 30 cents distributions earlier this year. What follows after Envictus are mainly S-Chips and small Singapore construction and manufacturing companies.

The bottom 20 percent are really unattractive. I would suggest anyone using the list to comb through it with a very fine tooth comb. I can send the spreadsheet if you require.


  1. i noticed majority of these undervalued stocks stay the way they are for many years and over many bull and bear markets. When the investor is young then time is no issue but say, for a 60 years old investor then getting into these undervalued stocks can be a heart breaking wait.

  2. That is a correct observation. However, I think it would be better to filter the list to exclude the China stocks. We cannot be sure if they will still be around in five more years given the high rate of corporate fraud.