1 Timeless Investing Lesson from Singapore’s 15 Best-Performing Shares Over the Past Decade
Benjamin Graham, who was Warren Buffett’s mentor, once said:
“In the short run, the market is a voting machine but in the long run, it is a weighing machine.”
What Graham meant is that in the short-term (days and months), stocks can fluctuate wildly. But in the long-term, companies with strong earnings tend to do better than those without.
The best shares of the decade
Over the past 10 years, the 15 best-performing stocks in Singapore’s market are:
1. AEM Holdings Ltd (SGX:AWX);
2. Best World International Limited (SGX:CGN);
3. BreadTalk Group Limited (SGX:CTN);
4. CITIC Envirotech Ltd (SGX:CEE);
5. Straco Corporation Limited (SGX:S85);
6. UMS Holdings Limited (SGX:558);
7. Tianjin Zhong Xin Pharmaceutical Group Corporation Limited (SGX:T14);
8. China Sunsine Chemical Holdings Ltd (SGX:CH8);
9. Health Management International Ltd (SGX:588);
10. Hiap Hoe Limited (SGX:5JK);
11. Riverstone Holdings Limited (SGX:AP4);
12. Valuetronics Holdings Limited (SGX:BN2);
13. KSH Holdings Limited (SGX:ER0);
14. Sunpower Group Ltd (SGX:5GD); and
15. Ho Bee Land Limited (SGX:H13).
Source: S&P Global Market Intelligence (stock prices that are quoted in other currencies have been converted to Singapore dollars; stock prices are rounded up to two decimal places)
The best performing stock for the decade was AEM Holdings, which saw its share price rise by an astronomical 853%. Some other prominent companies featured in the list above are BreadTalk Group, Straco Corporation, and Riverstone Holdings.
If you recall, the 10-year period also includes the depth of the Great Financial Crisis, in which the Straits Times Index (SGX: ^STI) hit a low of below 1,600 in March 2009. For example, BreakTalk’s share price plunged from a high of S$0.69 in 2007 to a low of S$0.24 in 2009, a fall of around 65%.
However, the companies have since recovered to reward their shareholders with higher share prices.
In the short-term (from September 2008 to March 2009), most of the stocks in the list would have been hammered badly. But in the long-term (the 10-year period from September 2008 to September 2018), the stocks have done exceptionally well, and that is also due to better business performances over the years.
Below is a table showing the earnings per share (EPS) figures and their growth rates over the 10 years:Source: S&P Global Market Intelligence (EPS figures that are in other currencies have been converted to Singapore dollars; EPS figures are rounded up to four decimal places))
Usually, companies with great businesses see significant growth in their EPS over time. Of the 15 top performers in Singapore’s stock market, only one company, KSH Holdings, saw its EPS drop from September 2008 to September 2018. The best share for the past decade in terms of share price growth, AEM Holdings, made losses in September 2008, and has since grown its EPS manifold.
Although not perfectly correlated, in general, the growth in the 15 companies’ EPS had rewarded their shareholders with higher stock prices over the long-term.
The Foolish takeaway
From the above, we can see that we should always focus on the things that matter when investing and that is, the business fundamentals.
Warren Buffett, Benjamin Graham’s student, once said:
“If a business does well, the stock eventually follows.”
The 15 best-performing Singapore shares have shown that in the short-term, the stock market fluctuates wildly, but over the long-term — with the right businesses — it is a wealth-builder.