Fervent value investors ascribing to Benjamin Graham’s investment philosophy may sometimes find opportunities in stocks stigmatised by the market. Such stocks of companies often trade down to bargain levels due to their involvement in accounting irregularities, financial distress or protracted litigation. An example of such stocks in our local context, Vibrant Group recently plunged almost 50 percent from $0.33 to $0.17 after discovering possible accounting fraud in its BlackGold International subsidiary just a year after acquiring the company. While most investors would tend to avoid stocks of such companies, some are good investments for those that remain steadfast in face of bad news (think Warren Buffet and Wells Fargo). Notwithstanding those impacted by “bad news”, there are sti

In the hunt for investment worthy stocks, investors tend to make use of several common valuation indicators such as price-to-earnings (P/E) ratio, price-to-book value (P/B) ratio and dividend yield. Refer to pages 36-37 for Lowest P/E to get a clearer picture. Naturally, each of these indicators should not be used individually as a clearer picture will only be shown after delving deeper. To illustrate the process, we take a look at the three companies with the lowest P/E and find out if they are indeed undervalued. HL Global Enterprises The gain on the disposals boosted the group’s net profit for FY17 to $86.2 million, turning it around from a net loss of $0.2 million in FY16. HLGE’s shares are currently valued at a trailing 12 months (TTM) P/E of 0.5 times, implying that investor conf