Many people look at returns, revenue, profitability, business fundamentals when they invest their money. For some people, the trading volume of a stock could be equally important. This is because it shows that it is a liquid stock that people are actively buying and selling, meaning they can get a fair price for the stock if they have an urgent need to liquidate their assets.
Traders also look at a stock’s trading volume as it shows that they can easily obtain the stock whether they want to buy (long) or sell (short) it at a certain point. Stocks that are more liquid may also have higher a free float, which means that a high proportion of the company is in public hands and being actively bought and sold as opposed to being kept by company insiders.
In this week’s edition of 4 Stocks This Week, we look at companies that have had high trading volume in the past three months.
#1 Rowsley Ltd.
At a market capitalisation of $531 million, Rowsley is focused in the business of real estate. It main business segments include design and engineering, real estate development and hospitality.
On 18 July 2017, it announced its proposed acquisition of Thomson Medical in a deal reaching up to $1.9 billion. Mainly due to this, its stock has been the highest traded on the Singapore Exchange (SGX) over the past three months.
Thomson Medical is also privately owned by Peter Lim, one of the major shareholders in Rowsley. Another thing to note is that Thomson Medical was earmarked to be separately listed on SGX at the tail end of 2016. If this acquisition goes through, it will not likely be separately listed in Singapore any time soon.
This proposed acquisition also highlights the fact that stocks such as Rowsley may not see consistently high trading volume. It only happens when there is new interest in such stocks. This also makes it very volatile – within the space of one month, it jumped from $0.07 to $0.14 and came back down to $0.10.
As at Friday (25 August 2017), Rowsley’s shares were trading at $0.12.
Read Also: FSMOne – How Singapore Investors Can Now Trade SGX Stocks With The Same Platform They Use For Bonds & Unit Trusts
#2 Spackman Entertainment Group Ltd
Spackman Entertainment, a leading Korean entertainment production company, announced its first acquisition, since being listed, on 14 August. It is proposing to acquire start-up film production company, Take Pictures, which was founded by veteran Korean movie producer, Song Dae-Chan.
This acquisition will enable it to ramp up its movie production capacity, which will likely improve revenue and profitability as well as diversify its portfolio.
The reason for Spackman’s recent increase in trading volume is also mainly due to this announcement. It has seen its share price rise from $0.105 before the announcement to $0.125 today.
#3 Imperium Crown Ltd
In the business of property investment and property development, Imperium Crown has a portfolio of five properties in Tokyo, Japan.
With a market capitalisation of $86 million, the company said that it was limited in size and constrained by free cash flow. To enable it to focus on its property development business, it intends to divest is property portfolio in Japan.
As at Friday (25 August 2017), Imperium Crown was trading $0.109.
#4 Thai Beverage PLC
In the business of distributing beers, other alcoholic beverages, non-alcoholic beverages and food, the company is one of the largest food and beverage companies in Southeast Asia.
At a market capitalisation of close to $24 billion, Thai Beverage’s liquidity is a product of its reputation as a company and number of shares available for trading in the market. This is unlike the other companies featured above, where their trading volume was a function of an announcement.
Also unlike some of the other companies featured above, ThaiBev’s large market capitalisation and reputation as a stable company to invest in for the long-term, its share price has not seen the volatility experienced by them.
In the past three months, its share price has improved 10.6%. On Friday (25 August 2017), its shares closed at $0.94.
4 Stocks This Week is not a recommendation from us to buy or sell any of these stocks. For investors who are keen to find out more, you should continue researching about them before making your investment decisions.
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