Dear readers, there are currently two undervalued, oversold Straits Times Index (STI) stocks on the Singapore stock exchange. Each of these two stocks has a Relative Strength Index of below 30 and a Price-to-Book ratio of below 1. Without further ado, let us take a look at these two oversold and undervalued STI stocks.
First, JMH stock or Jardine Matheson Holding stock. JMH stock currently trades at a Price-to-Book ratio of 0.555 and a dividend yield of 3.78%. Its Return-on-Equity is 10.06%.
Second, JSH stock or Jardine Strategic Holding stock. JSH stock currently trades at a Price-to-Book ratio of 0.674 and a dividend yield of 1.63%. Its Return-on-Equity is 6.503%.
Oversold stocks does not mean that these stocks will rebound anytime soon now. Nor should the combination of both oversold and undervalued excite me into investing in these two stocks immediately in view of the larger stocks markets macro backdrop. I continue to be bearish on the stocks markets in the nearer term, with a target of 2,000 for the Singapore stocks markets.
I read online how some investors have been accumulating stocks which they consider cheap recently. As I have highlighted to readers before, the Straits Times Index currently is below or at most around the same level of the Straits Times Index (STI) ten years back. Ten years ago, we did not have the Covid-19 pandemic which disrupted businesses. Neither did we have the unprecedented business woes at Singapore Airlines (SIA) back then. And ten years ago, the stocks markets by and large were still recovering from the global financial crisis.
Hence, with the Singapore Straits Times Index retracing to levels ten years ago but in the context of more “risks”, I am of the view that the corrections have already began to push the Straits Times Index slowly to my target level of 2,000, aided by the developments on the international macro stocks markets. At the very least, Singapore has confirmed a recession in 2020, investors should not think that the current Singapore stocks level which matches the 2010 level is cheap. It is cheap for a reason and it could get cheaper anytime soon.