The coronavirus has battered many economies of the world, including that of Singapore.
Our small economy could see its worst-ever recession if what the authorities have projected comes true.
The Ministry of Trade and Industry expects Singapore’s gross domestic product to shrink between 4 per cent and 7 per cent in 2020, far worst than the 2.2 per cent fall during the Asian financial crisis in 1998.
Amid such tough times, it is important for investors in the stock market to be especially selective when it comes to picking stocks.
Screening for strong stocks
With the help of a stock screener , I screened out from the 700-odd Singapore stocks some of the companies with strong balance sheets.
Those companies are more likely to withstand the harsh economic conditions brought about by Covid-19 than those that are bogged down by huge amounts of debt.
I used three broad criteria to filter the universe of Singapore-listed stocks. Those criteria and the reasons I chose them are:
Total revenue (more than $100 million) — to have companies with a sizeable scale
Return on equity (between 10 per cent and 30 per cent) — reveals companies with efficient management
Debt-to-equity (between 0 per cent and 20 per cent) — ensures a strong balance sheet
The stock screener revealed more than 20 stocks meeting those three criteria.
From there, I further filtered down the stocks to those that I think are worthy of further research for my own portfolio.
Here, I present to you the 15 stocks from my final list:
Company
Ticker
Revenue
($’ million)
Return on Equity (%)
Debt/Equity (%)
Price-to-Earnings Ratio
Dividend Yield (%)
SATS
S58
1,979.619
13.94
6.04
15.16
6.25
VICOM
V01
103.703
20.14
0
25.61
4.68
SIA Engineering
S59
994.1
12.28
1.26
11.47
5.56
SBS Transit
S61
1445.297
15.86
15.05
11.5
4.35
Riverstone
AP4
324.146
17.41
2.82
37.27
1.14
Venture
V03
3,633.431
14.99
0.08
13.03
4.29
The Hour Glass
AGS
755.532
13.78
5.29
5.97
4.55
Cortina
C41
502.601
18.33
17.45
5.89
1.56
HRnetGroup
CHZ
423.081
15.51
0
9.95
5.38
Kimly
1D0
208.299
23.39
0.09
12.34
5.21
Challenger
573
329.57
18.09
0
9.3
3.16
UMS
558
138.178
15.25
11.86
13.39
3.76
Sheng Siong
OV8
1,068.582
26.11
14.82
27.21
2.31
Valuetronics
BN2
501.429
18.64
0
7.15
5.89
Straco
S85
108.835
13.32
13.37
11.57
4.9
(Source: SGX Stock Screener; data as of market close on June 3, 2020)
Further research required
As you can see from the list, there are companies that are directly hit by the Covid-19 pandemic, while others like Riverstone and Sheng Siong are thriving in this environment.
A stock screener serves as a useful stock ideas generation tool.
What investors should then do is to dive deeper into the companies sieved out as not all companies may turn out to be great ones for the long-term.
This article is certainly not a recommendation to buy or sell any of the companies mentioned, but to give readers an idea of how to go about finding stocks to invest in.
This article was first published in Seedly.
InvestmentSingapore companiesSGX (Singapore Exchange)Stocks and Shares
