It’s about time we review SGX-listed stocks. We’ll take a look on their current status and look back on its performance few years back. I had spend a few days reviewing all the listed stocks and truth be told, most of them are currently cheaply priced. What do I mean by “cheap”? In 2004, local economy and stock market started to recover. I remember that in mid 2003, I saw the indicators and believed that we are going to bottom up. Before
I quit the Army, I told my ex-colleagues that “I think it’s about time”. I launched my first wave on the tech stock/funds. And from 2004 – 2005, many stocks were lagging behind because Ms. Market was shaky; she wasn’t sure. Index was fluctuating without clear direction. As such, I spend considerable amount of time finding gems rather than following “road-runners”. I found quite a lot of it and I’ll share a few with you today. Some of my readers may have followed my recommendation and benefited from it. Appreciate if you can testify here.
In my opinion, right now most of the counters are priced at a level similar to 2005. No doubt still has room to plunge further, but really quite cheap comparatively.
The Index
As expected, STI could not hold its ground since late last year. When sub-prime woes were exposed, STI took a hit in around July 2007. However, in around September 2007, global market under-estimated the damaging power of US financial crisis, it continued to move up. And in around Dec 2007, with surging oil price, global market started to loss steam and it was “neither here or there”. And then I’m sure it’s GAME OVER. Thereafter I started to advise my friend to either hold or sell BUT do not give a single cent to Ms. Market – she is breaking down soon.
(Note: some of you may know that “Mr. Market” is a term used by Warren Buffet and his teacher Benjamin Graham to describe market behaviour. But I used “Ms. Market” instead as I find the market behaved like a girl – temperamental!)
In early January this year, STI was around 3,400 points. As at today, STI stands at 2,361.34. Approximately 1,000 points had been wiped out. So this proves my points that although there will be fluctuations along the way, ups and downs but overall it’s coming down. And unless you speculate, you will not make it if you invest along the way.
This is the downtrend of the business cycle.
Selected Stocks
1) AusGroup. Now this is really one of mine favourite stocks. I (and my all-time favourite analyst, BT Snr Correspondence, CFA Charterholder - Ms Teh Hooi Ling) found the gems before it skyrocketed. Hooi Ling visited AusGroup’s management in Australia and wrote an excellent report published on the paper. The stock was initially priced around $0.30 in 2006. And then it became a rocket surged all the way to around $2 almost non-stopped. And what is its price now? Unbelievable $0.265! What about its recent financial performance and position?
Business: supporting oil & gas industry.
Report: FY2008
Revenue: increased to A378.9m (34.8% variance)
Operating profit: dropped to A21.7m (23.9% variance)
NP: dropped to A14.4m (27.8% variance)
NP margin: 3.8%
Cash: A18.7m
Working capital: 1.61
LT debt to total capital: 28%
Basic EPS: A3.6 cents
PE: 7.36
NTA: A22.5 cents
Yield: 2.3%
Director’s remark: secured higher orders; expected FY2009 to be profitable.
My remarks: margin and yield is unimpressive. Profit may soften further but likely to remain positive. I do not expect oil price to stay below $1 next year. Overall performance and position looks fine.
2) Bonvest Holdings. This is yet another company which make me proud; make me scream. In 2005, Bonvest was a lager and I found this gems. I studied its businesses and strongly believed that it worth more than $0.55. However, Ms. Market has different opinion. So I bought in the share and within that year, I disposed it at $0.905 – too early!!! You must be shocked when I say “too early”. Yes, after I locked in my profit, Bonvest continued to surge to around $1.70!!!!!
“Wow, then you must have regretted and jump!”
No, remember that in investment, your greatest weakness is greed and fear. I’ve earned my money, I moved on. Bonvest is currently priced at $0.72. What about its recent financial performance and position?
Business: property development and investment, food and beverage, hotel ownership and waste management.
Report: 1H2008
Revenue: dropped to S$119.7m (28.1% variance)
Operating profit: surged to S$100m (238.8% variance) due to revaluation gain of $70.3m. Without it, operating profit should be around $30m (about the same as previous identical period)
NP: surged to S$86m for the same reason (266.2% variance)
Cash: S$89.5m (fat)
Working capital: 2.15 (healthy)
LT debt to total capital: 0.26% (extremely low)
Basic EPS: S$20.7 cents
PE: 3.4
NTA: S$1.65
Yield: N.A.
Director’s remark: challenging and competitive market. Minimal contribution expected from most of its business segments.
My remarks: You want to know how I feel now? I feel that there is a very beautiful lady standing right before me, single and available. And luckily you’ve stopped me otherwise I would have jump onto it like right now! I mean if you buy Bonvest now, you are paying S$0.70 for a company that worth S$1.65! Bonvest’s financial position and performance is very impressive although it may not be able to hold its ground in view of intense market competition and uncertain global economy. And that’s exactly why I’m not calling a buy but close monitoring. US economy is highly uncertain couple with high oil and food prices; we are really not sure where this is leading to.
…… To be continue
I quit the Army, I told my ex-colleagues that “I think it’s about time”. I launched my first wave on the tech stock/funds. And from 2004 – 2005, many stocks were lagging behind because Ms. Market was shaky; she wasn’t sure. Index was fluctuating without clear direction. As such, I spend considerable amount of time finding gems rather than following “road-runners”. I found quite a lot of it and I’ll share a few with you today. Some of my readers may have followed my recommendation and benefited from it. Appreciate if you can testify here.In my opinion, right now most of the counters are priced at a level similar to 2005. No doubt still has room to plunge further, but really quite cheap comparatively.
The Index
As expected, STI could not hold its ground since late last year. When sub-prime woes were exposed, STI took a hit in around July 2007. However, in around September 2007, global market under-estimated the damaging power of US financial crisis, it continued to move up. And in around Dec 2007, with surging oil price, global market started to loss steam and it was “neither here or there”. And then I’m sure it’s GAME OVER. Thereafter I started to advise my friend to either hold or sell BUT do not give a single cent to Ms. Market – she is breaking down soon.
(Note: some of you may know that “Mr. Market” is a term used by Warren Buffet and his teacher Benjamin Graham to describe market behaviour. But I used “Ms. Market” instead as I find the market behaved like a girl – temperamental!)
In early January this year, STI was around 3,400 points. As at today, STI stands at 2,361.34. Approximately 1,000 points had been wiped out. So this proves my points that although there will be fluctuations along the way, ups and downs but overall it’s coming down. And unless you speculate, you will not make it if you invest along the way.
This is the downtrend of the business cycle.
Selected Stocks
1) AusGroup. Now this is really one of mine favourite stocks. I (and my all-time favourite analyst, BT Snr Correspondence, CFA Charterholder - Ms Teh Hooi Ling) found the gems before it skyrocketed. Hooi Ling visited AusGroup’s management in Australia and wrote an excellent report published on the paper. The stock was initially priced around $0.30 in 2006. And then it became a rocket surged all the way to around $2 almost non-stopped. And what is its price now? Unbelievable $0.265! What about its recent financial performance and position?
Business: supporting oil & gas industry.
Report: FY2008
Revenue: increased to A378.9m (34.8% variance)
Operating profit: dropped to A21.7m (23.9% variance)
NP: dropped to A14.4m (27.8% variance)
NP margin: 3.8%
Cash: A18.7m
Working capital: 1.61
LT debt to total capital: 28%
Basic EPS: A3.6 cents
PE: 7.36
NTA: A22.5 cents
Yield: 2.3%
Director’s remark: secured higher orders; expected FY2009 to be profitable.
My remarks: margin and yield is unimpressive. Profit may soften further but likely to remain positive. I do not expect oil price to stay below $1 next year. Overall performance and position looks fine.
2) Bonvest Holdings. This is yet another company which make me proud; make me scream. In 2005, Bonvest was a lager and I found this gems. I studied its businesses and strongly believed that it worth more than $0.55. However, Ms. Market has different opinion. So I bought in the share and within that year, I disposed it at $0.905 – too early!!! You must be shocked when I say “too early”. Yes, after I locked in my profit, Bonvest continued to surge to around $1.70!!!!!
“Wow, then you must have regretted and jump!”
No, remember that in investment, your greatest weakness is greed and fear. I’ve earned my money, I moved on. Bonvest is currently priced at $0.72. What about its recent financial performance and position?
Business: property development and investment, food and beverage, hotel ownership and waste management.
Report: 1H2008
Revenue: dropped to S$119.7m (28.1% variance)
Operating profit: surged to S$100m (238.8% variance) due to revaluation gain of $70.3m. Without it, operating profit should be around $30m (about the same as previous identical period)
NP: surged to S$86m for the same reason (266.2% variance)
Cash: S$89.5m (fat)
Working capital: 2.15 (healthy)
LT debt to total capital: 0.26% (extremely low)
Basic EPS: S$20.7 cents
PE: 3.4
NTA: S$1.65
Yield: N.A.
Director’s remark: challenging and competitive market. Minimal contribution expected from most of its business segments.
My remarks: You want to know how I feel now? I feel that there is a very beautiful lady standing right before me, single and available. And luckily you’ve stopped me otherwise I would have jump onto it like right now! I mean if you buy Bonvest now, you are paying S$0.70 for a company that worth S$1.65! Bonvest’s financial position and performance is very impressive although it may not be able to hold its ground in view of intense market competition and uncertain global economy. And that’s exactly why I’m not calling a buy but close monitoring. US economy is highly uncertain couple with high oil and food prices; we are really not sure where this is leading to.
…… To be continue
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