Let’s take stock on the STI component stocks performance in the first half of 2013 and find out the leaders and laggards.
When calculating the returns, the price has been adjusted for dividends, stocks splits and other corporate actions that may affect the stock price.
First, there are 14 stocks with positive returns and 16 stocks with negative returns. Almost a 50-50 split.
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Second, the top 6 stocks had double digit returns:
- Thai Bev (+51%)
- SingTel (+16%)
- SIA Engg (+15%)
- ST Engg (+14%)
- DBS (+11%)
- Starhub (+10%)
Third, the worst 6 stocks had double digit negative returns:
- Noble Group (-24%)
- Golden Agri (-16%)
- Capitaland (-16%)
- CityDev (-15%)
- Jardine C & C (-14%)
- Wilmar (-12%)
From the results, we can see that F&B, Telecommunications and Engineering sectors are doing well. Commodities and property developers have taken a beating.
Would this trend continue or reverse?
If you are a trend follower, you might want to long the top performers and short the laggards, subjected to your trading rules.
If you are a counter trend trader, you might want to short the top performers and buy the laggards, subjected to your counter-trend rules.
If you are a pairs trader, you might want to short DBS and buy UOB or OCBC at the same time. Or short Olam and long Noble together.
If you are a value investor, you might be better off looking for good buys near the bottom of the list, subjected to your stock picking criteria.