How We Used Investor-One To Create A SGX Portfolio

The Singapore Exchange (SGX) is home to many well-known stocks. While stocks like Singtel and DBS may get all the attention, they are not the only ones with potential. After all, there are over 700 stocks listed on the SGX!

When it comes to investing in Singapore, our portfolio has a healthy allocation to small and mid-cap SGX stocks. Compared to your large caps like Singtel, we feel these stocks have greater growth potential. Additionally, since most are based in Singapore, it’s easier for us to get a good understanding of their business and management team.

How to choose the best stocks? 

There is no “best” way to pick the right stocks. It depends on your investment goals, your risk appetite, as well as how much time and capital you have.  As a rule of thumb, these steps can help you identify whether a stock is worth investing in. 

1: Do your own research and analysis to understand the company and the business it operates.

2: Use both quantitative and qualitative metrics to evaluate your stock picks. 

  • Quantitative factors include technical analysis to determine the fair value of a stock. 
  • Qualitative factors include interviews or reports that can help you better understand a company’s prospects and whether it is in line with your investment objectives.

3: Avoid basing your investment decisions on emotions. Don’t buy a stock simply because of the hype (remember GameStop or AMC?).  

4: Diversify. Make sure to pick stocks from different industries so your risk is not just concentrated in one sector.

5: Know what you’re getting from a stock. 

  • With a stock that pays dividends, you can reinvest your dividends to increase the size of your holding. You’ll probably get modest capital growth but enjoy steady dividends.  
  • If you’re looking for maximum capital appreciation, stocks with good growth potential may suit you more because there’s a possibility of rapid price increases.

Where to find Singapore stocks with growth potential

For us, we like stocks that can potentially generate returns fast – within 3 to 6 months for instance. But stocks with future growth potential can be hard to spot. You need to first analyse  the industry potential as well as the ability of a company to ride that growth. This is where qualitative and quantitative factors come in to help identify such stocks. 

In Singapore, stocks with growth potential tend to be small and mid-caps. But the thing is, these stocks usually don’t get much analyst coverage. By the time they do, the stock price is likely to have already run up quite a bit. 

Luckily for us, there’s the Investor-One portal. You’re not likely to find the analysis there reported in the papers or compiled in analyst reports. This gives you the opportunity to uncover “hidden gems” ahead of other investors. We like using the site to help further our research on small and mid cap SGX stocks and also to get a sense of the market chatter.

Qualitative factors to consider 

Company news

News on a listed company can cause it’s stock price to rise or tumble. This is because good news often prompts people to buy a stock, while bad news causes them to sell the stock. This affects supply and demand and ultimately, the share price. 

The News Stories feature on Investor-One lets you read up in-depth on a company. 

For instance, the news above suggests that Acromec may be worth adding to our watchlist as we think that the contracts will contribute positively to earnings per share and net tangible assets per share in the coming months.

Management Team

Personnel interviews allow us to understand more about a company and may provide insights that are not easily found in press releases. We’ve found the C-suite interviews on Investor-One immensely helpful.

Without this interview, it would have been hard to know that Grand Venture Technology has invested significantly in Industry 4.0, automation and robotics initiatives which will prepare them for the switch in digital landscape in 2021 and beyond. 

Of course, this doesn’t necessarily mean that Grand Venture Technology is going to see an immediate lift in share price. But it does suggest that investors may do well to take a closer look at the company’s fundamentals and the industry it is operating in. 

Quantitative factors to consider

Earnings releases

Investors should keep a close eye on changes in company earnings as part of their fundamental analysis. If company earnings drop and the share price does not adjust to the new earnings level, the stock price might not reflect true value. 

Stock.i1 on Investor-One allows investors to have a snapshot of earning announcements and other insights.

Again, this is a useful starting point to do further research into Medtecs. In fact, we’ve added this stock to our watchlist based on the potential we see from their positive earnings announcement.

Firstly, its revenue skyrocketed 1,444.2% from US$1.8 million in FY2019 to US$27.8 million in FY2020 due to higher customer demand for healthcare items. Concurrently, the Group will make full use of e-commerce platforms through a “Source and Sell Globally” strategy. The aim is to drive customer engagement and improve the sourcing of quality raw materials, as well as diversify the pool of trusted PPE suppliers to minimize the impact of supply chain disruption. 

Dividends

Dividends are a portion of a company’s profit that it chooses to return to its shareholders. They are one of the ways a shareholder can earn money from an investment without having to sell shares. 

You could use dividends as a deciding factor when choosing stocks, because they indicate that the company is profitable and that there is a good possibility of future earnings. The highest dividend yield portion under the performance section will allow you to monitor highest dividend yield companies! We are keeping an eye on Maxi-Cash Fin as it is a higher dividend yield stock with excellent revenue and profit growth.



Based on the insights and analyses we’ve gleaned from Investor-One, we have identified several positions we may proceed with. The platform has helped us narrow down potential stock picks and allowed us to cut down much of the initial groundwork and research.

Interested to start rounding out your SGX portfolio? Use Investor-One as the starting point for your research. You can also follow @ShareInvestor SG on Telegram to get the latest stock news and analysis on the go.

Disclaimer: This article is written in collaboration with Investor-One. All opinions and views expressed in this article are that of The Frugal Fox. 

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