5 SGX stocks to invest in 2018

With Dow Jones on course to hitting 25,000 points, the US stock market is certainly on a bull run. Over in Singapore, the Strait Times Index is not doing too badly either, adding 1.8% for the month of November and bringing its year-to-date dividend inclusive return to 23%, compared to an SGD denominated average returns of 18% for the benchmarks of Australia, Hong Kong and Japan. In this article, I will share my views on the 5 SGX stocks to invest in 2018.

For the past 7 years, I had been sharing my insights and strategies on a number of SGX stocks in this blog. However, two years ago, I have divested all my stock holding to fund the purchase of my new home. In spite of this, I have been analysing selected SGX stocks which I would invest in 2018 once my war chest is built up. On this note, it must be emphasized that I do not have a vested interest in the following SGX stocks. Readers and members must do their own diligence before investing in these counters.

OCBC

I am still beating myself for missing the boat on this one. Since 2016, I have been tracking OCBC when the shares were trading at about $8.00 level. Unexpectedly, the share price went on a rampage and stormed to $12.00. Is this counter over-valued? Based on my analysis, current shares are likely to be worth much more than its trading price. Why is this so?

Read my analysis on OCBC’s value, its recent financial performance and how it fared against DBS and UOB. To access the articles, please sign up as member of SG Wealth Builder.

1. Battle of Singapore Banks (OCBC, DBS and UOB)
2. OCBC shares worth $50?
3. OCBC Bank to rock the market with multi-billion hidden assets?
4. Will EZRA sink OCBC share price?
5. OCBC considering sale of United Engineers Ltd
6. Is it a good time to invest in OCBC shares?
7. OCBC Wing Hang Bank

Although not vested in OCBC shares before, this is my most favourite stock because of its investment moat, long history of track record, diversified business and strong brand name. Being a family-owned, professionally-run company, this bank spread its wings overseas in recent years by venturing into the China market with Wing Hang Bank acquisition. In doing so, it has managed to mitigate the double whammy of toxic corporate loans made to the ailing oil and gas companies and the sluggish home loans due to the property cooling measures.

The venerable bank has also stunned market by acquiring Barclays and National Australia Bank wealth businesses. Will wealth management become a game-changer for OCBC? After all, the real money to be made should be from the rich and mighty right? To be honest, it is too early to judge but in my own opinion, it will be a fight to the death for the three local banks (OCBC, DBS and UOB). Ranked by Bloomberg Markets as the third strongest bank in the world, OCBC is expected to continue to do well in 2018.

Suntec REIT

Suntec City should be a familiar brand name in Singapore. Listed on 9 December 2004 on Singapore Exchange mainboard, Suntec REIT is the first composite REIT in Singapore, owning income-producing real estate that is primarily used for retail and/or office purposes. Since the IPO of Suntec REIT, there had been numerous other REITs in the Singapore stock market. But if given a choice, I would place my bet on this counter because of its long history, good management and track record of cash distribution per unit.

Read my analysis on Suntec REIT value and its recent financial performance. To access the articles, please sign up as member of SG Wealth Builder.

1. Bullish form of Suntec REIT shares
2. Analysis on Suntec REIT

The share price of Suntec REIT had been on a mighty bullish form since my last coverage in September 2017. The surging price could be due to the announcement of its Australia expansion plans. What are the risks for this counter and what is my entry price? Check out my analysis.

SingTel

Once a upon a time, it used to be the case that if you invested in a stock linked to Temasek Holdings, chances of making money would be high. Well, not anymore. The delisting of SMRT and NOL should serve as a stern reminder of the perils of herd investing. SingTel is one of the few companies of Temasek Holdings that has withstand the test of time. Listed in 1993, this telecom player has evolved into a juggernaut with 638 million mobile customers from across the globe.

Read my analysis on SingTel’s value, its recent financial performance and how it fared against StarHub and M1. To access the articles, please sign up as member of SG Wealth Builder.

1. SingTel knocked the wind out of StarHub
2. Three-way battle for SingTel, Starhub and M1
3. SingTel’s NetLink Trust IPO application approved
4. SingTel at a cross road
5. Short selling on SingTel shares
6. SingTel shares to rocket on NetLink Trust IPO?
7. SingTel share in supreme form
8. SingTel increased investment moat aggressively

Fresh from the divestment of NetLink Trust, SingTel recently put up its Hill Street property for sale. What is the management up to? Could there be another mouth-watering acquisition to bolster its market share in the mobile sector? Competition is going to heighten with the entry of TPG Telecom and not to mention the ravage brought forth by technology disruptions. How is SingTel going to tackle these challenges? 2018 may turn out to be another interesting year for SingTel investors. Do not miss the actions!

Raffles Medical Group

Share price of Raffles Medical Group has taken a beating lately and is on a horror run. So why on earth is this stock on this list? To put things into perspective, you only make money at the point of buying, and not selling. This means that to have a higher chance of winning the stock market, you should adopt a contrarian approach. Raffles Medical Group is one of the stocks that have fallen out of favour but its business fundamentals remain very much intact.

Read my analysis on Raffles Medical Group’s value, its recent financial performance and how it fared against rival IHH. To access the articles, please sign up as member of SG Wealth Builder.

1. My stock analysis of Raffles Medical Group
2. Raffles Medical shares under siege!
3. Raffles Medical share price
4. Raffles Medical Group’s Return on Equity (ROE)
5. Analysis on Raffles Medical Group
6. Raffles Medical shares power ahead
7. Raffles Medical Group stable growth
8. Raffles Medical Group’s proposed stock split

Although the healthcare industry is an evergreen sector in Singapore, it does not mean that there are no risks involved. The challenges faced by Raffles Medical Group is not difficult to understand but I am glad that there are concrete plans by the management to ride out the storm. Various projects like the Raffles Holland V, Raffles Hospital Extension and acquisition of MCH clinics are expected to diversify revenue sources and strengthen Raffles Medical’s position in the region.

2018 could be an interesting year as Raffles Medical is building two hospitals in China. I expect share price to witness further weakness because of the expected surge in capital layout for these two projects. I have set an entry price on this stock earlier on and on current form, it is likely that the share price would drop to my entry-level.

MM2 Asia

As a matter of policy, I do not invest in IPO and would avoid investing in companies which debut within 5 years of IPO. But I think mm2 Asia could be an exception.

Within two years of listing in the Catalist, the entertainment outfit has witnessed such explosive growth that it ascended to the SGX mainboard on 7 August 2017. Along the way, it has also attracted investment from StarHub.

Share price of mm2 Asia had been surging in recent years. Since IPO, mm2 Asia share price has risen from listing price of $0.25 to the current $0.50 level. There was a stock split exercise of 1-into-2 exercise in early 2016. But that didn’t stop its meteoric rise. In late 2016, the company announced yet another stock split exercise of 1-into-2 exercise.

Based on my memory, I could not recall any SGX stocks that underwent twice stock split in a year and still continued to rise like mm2 Asia shares. If shareholders held on to the shares since IPO in 2014, they would have made a killing! In stock split, shareholders do not need to make any payment. Do I regret missing the boat for this multi-bagger? Of course I did! The paper gains would have been 8 times considering the fact that this counter has been split twice in a year.

Read my analysis on mm2 Asia’s value and its recent financial performance. To access the articles, please sign up as member of SG Wealth Builder.

1. The outrageous story of mm2 Asia

In 2017, mm2 Asia suffered from a brief loss of momentum after the botched acquisition of Golden Village. However, that did not deter the management. In November 2017, it announced the shock acquisition of Cathay Cineplex for a whopping $230 million. Being a leader in content production, the acquisition of Cathay Cineplex is expected to create synergy in the value chain for mm2 Asia. With a higher revenue forecast in 2018, the share price is expected to maintain its bullish form.

I hope readers find the above article useful. Over in SG Wealth Builder, I have been trying to build a community of investors. It is in this spirit that I recently launched a beta version of SG Wealth Builder Membership. My aim is to share knowledge on the proper way to build wealth.

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Magically yours,

SG Wealth Builder