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Top 10 Most Oversold Stocks
Corporate Digest | 10 October 2014
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By: Ernest Lim
Articles (134) Profile

With the recent market weakness, as per my usual practice, I screened out oversold stocks listed on our Singapore bourse.

Here is the list of the top ten most oversold stocks using CIMB’s stock filter as of 7 October 2014.

Source: CIMB iTrade 7 Oct-14

One of the stocks in the above list caught my attention. Midas is the fourth most oversold stock on the Singapore Exchange by relative strength index (RSI) level as of 7 October. It has a market capitalisation of $402 million and has dropped 25 percent from $0.44 on 30 July 2014 to close $0.330 on 7 October 2014. Part of the decline may be attributed to its weaker than expected 2Q14 results announced on 14 August 2014.

Against the backdrop of 25 percent drop in Midas’ share price, Midas is the most oversold since its initial public offering with a RSI of 11.9 as of 3 October. The average directional index closed at an unsustainable high level at 57.0, indicating that the recent sharp downtrend is likely to ease. It trades at 0.67x price-to-book value with net asset value of $0.491. The average analyst target polled by Bloomberg is $0.533.

Chart 1: Midas Dropped 25% Since 30 Jul-14; At All Time Oversold By RSI

Source: CIMB iTrade Complimentary Chart (7 Oct-14)

Conclusion – Likely To Have A Technical Rebound

At the time of writing this, Midas is trading down half a cent to $0.325. If the general market were to rebound, based on chart, to a certain extent, Midas is likely to participate in the technical rebound. Resistance levels are around $0.35 to $0.36 and $0.38. Support levels are at $0.325 to $0.33 and $0.315.

Ernest Lim is a CFA, CA and has worked at GIC Special Investment. He has a solid feel of the markets and financial world and is now a remisier.

Please click here for more information about this author.

Midas Hldgs  -- -- --   
Business: Manufacturer of aluminium alloy extrusion products for China's rail transportation sector. [FY16 Turnover] Aluminium alloy (99.3%), polyethylene pipe (0.7%).

Insight: Jan-18, Co announced that its JV company, CRRC Nan... Read More
Hatten Land  0.100 -- --   
Business: Co is a leading property developer in Malaysia focusing on integrated residential, hotel and commercial developments in Malacca.

Insight: May-19, 9M19 revenue inched up 0.3% due to higher ... Read More
Nam Lee Pressed Metal Industries  0.380 +0.010 +2.70%   
Business: Co manufactures & sells steel & aluminium products. [FY18 Turnover] Aluminium (92%), mild steel (7.7%), stainless steel & others (0.3%).

Insight: May-19, 1H19 revenue slid 23% mainly due to a decr... Read More
JES Int'l Hldgs  -- -- --   
Business: Co engaged in the trading & manufacturing of plastic products, foodstuffs, household insecticides, seasoning, beverages & infant-care products.

Insight: Aug-18, 1H18, Co did not generate any revenue but ... Read More
OneApex  -- -- --   
Business: Co is a leading producers of fresh eggs in Singapore. [FY18 Turnover] Designer eggs & generic eggs (86.1%), others (13.9%).

Insight: May-19, 1H19 revenue rose 47% primarily due to inc... Read More

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