Why Investors Should Buy Stocks in December.
The Capricorn Effect offers unique advantages for investors who enter the market in December.
Historically, December has been one of the best-performing months for stock markets globally. The combination of year-end optimism, corporate announcements, and increased investor activity tends to lift overall market performance.
Some stocks offer attractive year-end dividends in December. Investors can buy these stocks to benefit from dividend payouts, adding another layer of return potential to their investments.
December often marks a “Santa Claus Rally,” where markets experience a consistent upward trend in the last week of the year. Being invested during this period can maximize returns.
The stocks highlighted below offer compelling reasons for investors to consider them as part of their portfolio, with strong fundamentals, attractive valuations, and significant upside potential.
1. AIMS APAC REIT (AAREIT): Stable Income with Growth Potential
AIMS APAC REIT (AAREIT) offers a strong investment case for income-seeking investors. With a market capitalization of $1.02 billion, it trades at a conservative 1.0x price-to-book (P/B) ratio and provides a 7.5% annualized yield, one of the most attractive in its sector. Analysts from LimTan maintain an “Accumulate” rating, with a consensus target price of $1.47, implying an 18% potential upside.
Why Buy:
AAREIT’s stability and attractive yield make it a top choice for dividend-focused portfolios.
Trading at book value indicates limited downside risk, while the potential price appreciation provides growth opportunities.
Singapore Stock Market Update: AIMS APAC REIT Advances Sustainability Initiatives Amid Market Fluctuations
2. Paragon REIT: Unlocking Value Through Strategic Moves
Paragon REIT is positioned to deliver significant returns amid strategic divestments by its majority shareholder, Cuscaden Peak Investments. Recent payouts, such as the 1.85 Singapore cents per unit from The Rail Mall sale, highlight the REIT’s ability to generate special dividends for investors. Speculation about a potential full divestment adds another layer of upside potential.
Why Buy:
Special dividends enhance immediate returns for unitholders.
A full wind-down or divestment could lead to substantial capital gains.
Paragon Reit’s Future in Limbo – A Sale on the Horizon?
3. Civmec: Leveraging Record Tender Opportunities
Civmec’s growth story is supported by a record-high tender pipeline of nearly A$10 billion and a strong A$821 million orderbook, ensuring stable revenues through 2029. The company’s diversification across energy, infrastructure, marine, and defense sectors ensures long-term sustainability.
Why Buy:
Strong orderbook provides revenue visibility.
High tendering activity indicates growth opportunities in both domestic and international markets.
Civmec: Capitalizing on Record Tender Opportunities for Sustainable Growth
4. Marco Polo Marine: Capitalizing on the Offshore Wind Boom
Marco Polo Marine is a hidden gem in the renewable energy space. Trading at a discount to global peers, with a target price of S$0.08, it offers a solid entry point for investors looking to benefit from the growing offshore wind market.
Why Buy:
Undervalued compared to industry peers.
Positioned to benefit from global energy transition trends.
Offshore & Marine Sector Outlook 2025: Rising Demand and Tight Vessel Supply Drive Growth
5. Singapore Telecommunications (SingTel): Boosted by SingPost’s Special Dividend
SingTel stands out as a reliable investment due to its robust capital return strategy. The potential special dividend from SingPost, one of its key holdings, further strengthens its capital return arsenal, enhancing shareholder value.
Why Buy:
Attractive dividend potential driven by SingPost’s payouts.
Defensive qualities as a telecommunications giant with diverse revenue streams.
SingPost’s Special Dividend Potential Boosts Singtel’s Capital Return Arsenal: Analysts Weigh In
6. Seatrium: A Turnaround Story in the Making
Seatrium’s transformation is gaining momentum, backed by a $24.4 billion orderbook spread across 30 projects, with deliveries extending to 2031. The company’s strategic pivot has led analysts to project profitability for FY2024, which could pave the way for dividend resumption. Consensus target prices range between $2.10 and $3.00, reflecting significant upside potential.
Why Buy:
Large orderbook provides long-term revenue stability.
Turnaround efforts could unlock further value, with dividends resuming in the near term.
Seatrium Charts a New Course: From Struggles to Ambitious Turnaround
7. Suntec REIT: Deep Value in a Strong Portfolio
Suntec REIT, trading at a 0.6x P/B ratio, offers a compelling value proposition. Despite a conditional cash offer by Aelios at S$1.16 per unit, which is below the NAV, the REIT’s high-quality portfolio and 5.2% dividend yield make it an attractive hold for investors. Analysts recommend not accepting the offer, citing the undervaluation.
Why Buy:
Deep discount to NAV indicates strong upside potential.
High-quality real estate assets across Singapore, Australia, and the UK provide stable income and growth opportunities.
Singapore Market Daily Review and Stock Analysis – December 6, 2024
8 Oiltek International: Reports 63.9% Profit Surge Amid Booming Biodiesel and Sustainable Aviation Fuel Markets
In the third quarter of 2024, Oiltek reported a 14.5% increase in revenue, reaching RM67.60 million, and a substantial 75.2% surge in gross profit, amounting to RM19.91 million. The gross profit margin improved by 10.2 percentage points to 29.5%. Profit after income tax rose by 83.2%, totaling RM8.98 million. Over the nine-month period ending September 30, 2024, the company achieved a 23.8% rise in revenue to RM168.05 million and a 63.9% increase in profit after tax, reaching RM19.26 million.
Why Buy:
As of November 2024, Oiltek’s order book stands at approximately RM400.9 million, expected to be fulfilled over the next 18 to 24 months. This robust pipeline provides strong revenue visibility and reflects the company’s ability to secure significant projects in a competitive market.
Oiltek: $0.875, accumulate
Conclusion: A Portfolio for All Seasons
The selected stocks—spanning REITs, industrial players, and telecommunications—offer a balanced mix of income, growth, and value opportunities. AAREIT, Paragon REIT, and Suntec REIT are ideal for yield-focused investors, while Civmec, Marco Polo Marine, Oiltek and Seatrium appeal to those seeking growth and turnaround plays. Finally, SingTel provides defensive stability with the added benefit of capital returns.
Investors should consider these opportunities to diversify their portfolios and capitalize on the potential upside in Singapore’s evolving market landscape.
Thank you
