2023 is gone, and welcome 2024!
New Year. New me. New resolutions, and also maybe New Stocks that can huat.
1 year ago, I still remember vividly how economists and bankers around the world braced for a recession in 2023. Now that 2023 is done and dusted, not only did we miraculously defy the prophecy, but we even saw the start of a new bull run.
That said, you might be curious about what lies ahead for 2024, and what stocks can help kickstart your 2024 portfolio.
Here are 8 stocks that are on my radar.
DBS Group Holding Ltd (SGX: D05)
DBS again?
Some of you might scoff at this.
But if I were to show you the 5-year price chart of DBS, you would understand why. Apart from the 2020 pandemic sell-offs, DBS seems to be able to grow its share price almost every single year.
Yes, interest rates should be going down next year.
And yes, there will be a temporary impact on the Net Interest Margin. But that should not be the only ratio that makes or breaks DBS’ 2024 performances.
A lower interest rate can be beneficial to banks. Lower interest rates would provide more growth opportunities for enterprises and individuals to plan for capital expenditures and mortgages.
That is why over the longer timeframe, DBS’ earnings and dividends per share are growing accretively regardless of the interest rate regime.
Oversea-Chinese Banking Corporation Ltd (SGX: O39)
If DBS is poised to do well, so will UOB and OCBC.
One of my greatest investing lessons for 2023 is to stop looking for the next shiny toy. In the end, it’s the familiar names that come out on top. The US boasts the Magnificent Seven combination, and all seven have been familiar names.
The same familiar names that have performed well, will likely continue to perform well. In Singapore, the Terrific Trio of Banks comes to my mind.
The same concern about interest rate cuts haunts OCBC as well. But when we take a look at OCBC’s non-interest income, we can see that the bank has a wide breadth of other revenue verticals that will not be affected negatively by rate cuts.
Again, there will be short-term impacts to the NIM, but looking at earnings per share and dividend per share, OCBC shares a solid track record of delivering shareholder value in various interest rate environments.
p.s. I would go on to list UOB as well, but I feel that would be devoid of another stock to be mentioned.
Mapletree Pan Asia Commercial Trust (SGX: N2IU)
While most REITs suffer from the higher borrowing rates in 2023, MPACT got a double sucker punch.
Not only did interest expenses creep up, but the untimely merger with MNACT gave MPACT a double whammy. The only saving grace was the continuous strong performance from its Singapore portfolio.
Rental reversion for Q3’23 is still affected by the lingering impact of COVID-19 for Festival Walk and China properties. But green shoots can be seen in terms of shopper traffic and tenant sales for Festival Walk.
This missing puzzle could finally fall into place to help MPACT propel to a better 2024.
iFAST Corporation Ltd (SG: AIY)
iFAST has had quite a 2023.
When prices almost hit SGD 10 per share back in 2021, no one anticipated the subsequent fall back down to SGD 4 per share in 2022. The peak to trough is easily -60%.
However in 2023, stock prices staged a rally to finish at SGD 8 per share, marking an increase of almost 40%.
Many would write off iFAST looking at its valuation alone. But looking at its performance and track record, it becomes clear that the company is not resting on its laurels. Recurring net revenue has grown at an astounding rate, and FY 2023 results are poised to outstrip its performances in 2022.
Its next growth frontier would be iFAST Global Bank, which offers a digital personal banking platform in the UK. This might be something new, but there certainly is potential synergy with its fintech and wealth management business.
Sheng Siong Group Ltd (SGX: OV8）
Yet another familiar name has made it onto the list.
A darling stock during the COVID pandemic that saw share prices rocket up 80%, Sheng Siong reported a modest dip in share price movements for 2023.
Higher expenses for 9M’23 pulled down Sheng Siong’s net profit, even though revenue continues to show growth.
The Group stated in its Q3’23 update that it has signed a lease to open its 6th store in Kunming, expanding its reach in China. The new store is expected to be operational by the mid-2024.
On local soil, the Group continues to seek store space in new and existing housing estates. With the new GST hike and carbon tax kicking in 2024, Sheng Siong’s fair prices offer a value proposition that can still fuel its local growth.
Micro-Mechanics (Holdings) Ltd (SGX: 5DD)
The cyclical semiconductor sector might be on an uptrend again, with NVIDIA and AMD all charting new highs, but end-stream Micro-Mechanics is still not seeing any upside.
As China is one of its biggest markets, a drop in revenue in FY2023 pulled down Micro-Mechanics’ performances significantly. Malaysia, another geographic stronghold, also saw sales dip by -25%.
Micro-Mechanics is a dividend investor favorite. Due to its business model and strong free cash flow, the company has had a brilliant track record in terms of share price appreciation and also increasing dividend per share payout.
If the SEMI forecasts are true, we should see a revitalized rebound for the entire semiconductor value chain. This will bode well for Micro-Mechanics.
Sim Leisure Group Ltd (SGX: URR)
Are you aware of a listed theme park designer and operator on the Singapore Exchange?
Sim Leisure Group is a business that you might not come across often. It designs. develops and operates theme parks. It is a business very focused on the leisure industry.
Some of its key attractions are the ESCAPE parks, ESCAPE Challenge, KidZania Kuala Lumpur, and VR Centres.
The founder of the company, Dato Sim, has a solid track record of 30 years in acing theme park projects. Some of the key notable accomplishments of the company include the Escape Waterpark Malaysia, Laguna Waterpark Dubai, Legoland, and Universal Studios Singapore.
The leisure industry got hit hard during the pandemic periods, but the company survived and recorded all-time high revenue and operating income for FY 2022.
By continuing its forte in the theme park business, it will be bringing KidZania back to Singapore in 2024, which will be at Sentosa.
SUTL Enterprise Ltd (SGX: BHU)
SUTL is a well-diversified corporation with businesses in Consumer Goods, Leisure and Environmental sectors.
Its primary business is still in the business of marina operations, where it develops, owns, operates or act as a consultant to marinas.
A marina is basically a dock or basin with moorings and supplies for yachts. SUTL is the owner of the ONE°15 brand, and counts the ONE°15 Marina Sentosa Cove as one of its flagship marina.
Operating in a business that offers Integrated Facilities Management for yachts, SUTL’s financials look commendable, with its free cash flow margin standing out.
Given its expertise in running and operating marinas around the world, SUTL could continue to do well in 2024.
Common stocks, uncommon profits
Some of you might be put off by the usual names suggested. But one key lesson that I learned in 2023 is to keep investing as simple as possible. Too often, we chase after the next big thing, burning on cash provided by venture capital when interest rates are closed to zero.
But when the tides ebbed, these stocks suffered badly. Yes, we saw a small bull run just when the Fed turned dovish, but these hypergrowth stocks are still not back to their glory days.
Guess who stole the limelight? The NASDAQ heavy hitters that we are so familiar with. Common stocks that delivered on uncommon profits.
The same approach, when applied to the Singapore market, also helps us revalidate existing companies with excellent track record. If there’s no reason for these companies to suffer or weaken in 2024, they can only become better.
Granted not many may be familiar with Sim Leisure and SUTL, but judging from the fundamentals and the prospects, these companies, although not as illustrious as our Singapore banks, can prove to be the next multibaggers if they continue to be well managed.
For me, its far better to buy a stock that can confirm plus chope make me huat in the long term, rather than just in 2024.
Do you agree?
If you’ll like to find out more about how Alvin identifies and selects the best Undervalued and Growth stocks, register to join his free webinar sharing session.