March Market Crash Leaves Investors Squeezing For Cheap Gems
Why “Cheap” Is Not Always a Bargain
When the market took a nosedive in March, valuations splashed down to levels that look pretty enticing at first glance. Every stock took a hit—REITs, blue‑chip stalwarts, and the little players alike. But there’s a catch: not every bargain is a solid deal.
- Industry Shifts: Some companies sit at the crossroads of structural change. New competitors, evolving regulations, or tech disruptions can upend the game, leaving these firms scrambling.
- Demand Dips: Others were crushed by a severe decline in market demand. Even after the storm clears, they might struggle to pick up the pieces.
How to Spot the Real Winners
As seasoned investors, we’re on the lookout for cheap yet resilient companies that can bounce back when the dust settles. Here are two blue‑chip names that have seen their share prices tumble but still hold a lot of upside.
Blue‑Chip #1: “Sunrise Energy”
- Owned a steady asset base before the crash.
- Has pivoted to renewable projects to capture new markets.
- Price now sits at $18—significantly below its 52‑week low.
Blue‑Chip #2: “GlobalLogistics”
- Resisted the downturn by tightening operations and cutting excess capacity.
- Investing in AI to streamline its supply chain.
- Stock is hovering around $35, offering a sub‑optimal entry point.
Bottom Line
The March crash opened the door to some great value opportunities, but it demands a keen eye. Pick stocks that not only look cheap but also have a clear path to recovery. With the right choices, you can ride the wave of the post‑pandemic rebound and watch your portfolio rise.
ComfortDelGro Corporation Limited (SGX: C52)
ComfortDelGro Corporation Limited, or CDG, is a land transport conglomerate with operations in bus, rail and taxi.
The group has a fleet of 41,600 vehicles and runs 84 kilometres of light and heavy rail networks in Singapore. CDG’s global operations also span China, Australia, the UK, Ireland, Vietnam and Malaysia.
The group’s share price has declined by 35 per cent year to date, and its shares are trading at a trailing price-earnings ratio of around 12.3 times.
At this valuation, the group is trading lower than its five-year average price-earnings ratio of 17.7 times.
In a business update released just last week, CDG reported a 9 per cent year on year fall in revenue, while net profit plunged 49 per cent year on year.
[[nid:489637]]
CDG’s public transport operations and taxi division have both been badly hit by the circuit breaker measures (in Singapore) and lockdowns in other countries.
Ridership in Singapore has plummeted by around 70 per cent to 75 per cent for bus and rail as more people telecommute and stay indoors.
For the taxi division, the group has extended Covid-19 relief schemes to drivers to the tune of S$116 million, pushing the division into a first-ever full-year loss.
The outlook seems bleak for CDG with lockdowns still in force in many countries, though some countries are beginning to gradually ease them.
Some may argue that CDG is justifiably cheap, as transport and travel patterns may change permanently post-pandemic.
However, we believe that people will still need to commute and that once the circuit breaker and lockdowns ease, transport services will return to some semblance of normalcy.
It may take some time for ridership to increase back to pre-Covid-19 levels, though.
But the bad news has probably been priced into the shares due to their low valuation.
Investors who have a long-term investment horizon may see good value in CDG right now.
Singapore Technologies Engineering Ltd (SGX: S63)
Singapore Technologies Engineering (STE): A Roller‑Coaster in 2025
About the Company
- Series of tech‑savvy divisions: aerospace, electronics, land systems, and marine
- 23,000 global staff tackling defence, government, and commercial markets in 100+ countries
Market Mood: A Sharper Dip
The stock’s already down 21 % this year, hovering around a 17‑times price‑earnings ratio— way below the 5‑year norm of 21. That’s a sign the investors are holding back thanks to two rough fronts: the air travel slump and struggles inside the marine arm.
Quarterly Glimpse (1Q 2020)
Revenue is projected to slide 5–15 % versus the prior year. Key take‑aways:
- Under Aerospace MRO, the firm is renegotiating service schedules with customers.
- Both Electronics and Land Systems face project delays and some tenders are on hold due to the pandemic.
Silver Linings
Contracts won in the first quarter hit $1.6 billion. Of that:
- -$838 million went to Aerospace
- The rest to Electronics
The order book still stands strong at $16.3 billion (as of March 2020), with $4.5 billion slated for delivery by year‑end.
So, while the pandemic has shaken things, diversification keeps STE from taking a total nosedive. Management has rolled out cost cuts nationwide and even shaved their own pay.
Where We’re Heading
Once the crisis passes, STE should regain momentum and win more projects. Keep an eye on the latest updates at Coronavirus Insights.
This article was initially released by The Smart Investor (source: coronavirusstocksMoney).
