Picking stocks that deliver good returns, in excess of the market, is no simple feat. Many research supports the fact that professional fund managers, who dedicate the bulk of their time and efforts researching financial market and have in-depth knowledge of financial markets are not able to consistently beat market returns.
In fact, just recently, some guy called Warren Buffett won a $1 million bet on the Standard & Poor’s 500 (S&P 500) index delivering a better return than a basket of hedge funds. Of course, he’s the most famous investor in the world and part of why he’s so successful is because he’s been able to consistently beat the market. This makes it interesting that he backed an index fund to outperform professional fund managers.
This doesn’t mean retail investors should blindly follow index funds. At the end of the day, understanding what you’re investing into is still vitally important.
NUS-SGX Stock Pitch Competition
In Singapore, the National University of Singapore and Singapore Exchange (SGX) jointly held a stock pitch competition to encourage students to develop equity research skills and showcase their evaluation processes in the real world.
This year, over 110 teams participated in the competition. Below are some of the companies the winning teams thought would do well.
#1 Sunningdale Tech Ltd (SGX: BHQ)
The eventual winners, a team of four undergraduates from SMU’s Accountancy and Business schools, presented a report on Sunningdale Tech.
Sunningdale Tech serves four main business segments – Automotive, Consumer/ IT/ Telecommunications, Healthcare, and Tooling. The company has multiple production facilities worldwide, including the USA, Brazil, Latvia, China, Indonesia, Thailand, Malaysia and Singapore.
Over the past one-year period, Sunningdale Tech’s share price has already increased close to 53% to $1.97. This has been on the back of stronger business operations with revenue and core net profit increasing 6% and 33% respectively to $724.5 million and $42.0 million.
#2 Thai Beverage Public Company Limited (SGX: Y92)
The first runner-up, a team of four Business undergraduates from NUS, presented a report on ThaiBev.
Controlled by billionaire Charoen Sirivadhanabhakdi, ThaiBev is a leading distributer of beers, other alcoholic beverages, non-alcoholic beverages and food. In recent months, the company has also acquired a 53.6% stake in Vietnam’s largest beer company, Saigon Beer-Alcohol-Beverage Corporation, a 75% stake in Myanmar’s largest whisky firm, Grand Royal Group, 252 KFC restaurants in Thailand under a franchise agreement and 76% stake in hotpot and Thai food restaurant operator Spice of Asia.
In the last 52-weeks, ThaiBev’s shares has actually fell 16% to $0.81. This has mainly been due to slightly weaker operating performance, which saw its revenue and net profit fall 3% and 61% respectively to THB45.6 billion and THB3.0 billion.
#3 Singapore Technologies Engineering (SGX: S63)
The second runner-up, a cross-Uni team comprising one NUS Economics undergraduate and three SMU Accountancy and Business undergraduates, presented a report on ST Engineering.
ST Engineering provides engineering and related services in four business segments including Aerospace, Electronics, Land Systems, and Marine.
In the past 52 weeks, ST Engineering’s share price has declined more than 8% to $3.39. This could be due to its Marine business, which has remained lacklustre. In terms of operational performance, its revenue and net profit has declined 1% to $6.6 billion and increased 6% to $511.9 million respectively.
#4 Singapore Telecommunications Limited (SGX: Z74)
The winning team last year, four accountancy, business management and economics undergraduates from SMU, presented a report on SingTel in 2017.
SingTel, as well as StarHub and M1, has faced strong headwinds in the telecommunications market given the imminent arrival of a fourth telco player as well as slowing business prospects. SingTel has close to 60% market share in Singapore, as well as maintains a strong telecommunications foothold in Australia, Thailand, India, Philippines, Indonesia and Africa.
In the past 52 weeks, SingTel share price has lost 15%, ending at $3.38. SingTel’s revenue has remained stable delivering a 6% increase in operating revenue to $13.2 billion in the first nine months of its financial year. This could likely be due to muted outlook for business growth, the arrival of the fourth telco as well as several mobile virtual network operators such as Circles.Life, Zero Mobile and even perhaps MyRepublic, and narrowing net profit margins in its third quarter results.
This goes to show that while picking stocks can be interesting and exciting, it may not always yield the results you believe is going to happen. This is why you should regularly review your investments to check if your reasons for investing still hold as well as diversify your investments across several stocks and even considering investing in country indexes.
If you are interested to read more about Singapore stocks, you can check out our extensive archive of articles of 4 Stocks This Week. To stay up to date with the latest news on the Singapore Exchange, you also can check out the SGX My Gateway Market Updates to get more insights.
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