Keppel Corp

Today Keppel Corp has managed to shake off the Bear and gain control to close one cents higher at $6.21. this is quite positive!
Let see if it would be able to follow-through and rise above the lower Trend Line.

Not a call to buy or sell.
Pls dyodd.

24th Oct
After hitting the high of $7.30 on 3rd Oct 2018,it has since retreated sharply and continued to trend lower to touch $6.38 today, this is rather bearish.

 Short term wise, I think it may likely move down to retest the recent low of$6.27, Breaking down of $6.27 may likely go lower to retest $6.20 level which is also coincide with the lower channel support level of $6.20.


 I think a technical rebound may likely happen at this level and bring it higher towards $6.60 level. 

Not a call to buy or sell.

 Pls dyodd.

Keppel Corporation Limited, an investment holding company, engages in the offshore and marine, property, and infrastructure businesses in Singapore, China, Brazil, other Far East and ASEAN countries, and internationally. It constructs, fabricates, and repairs offshore production facilities and drilling rigs, power barges, specialized vessels, and other offshore production facilities; researches and develops deepwater engineering works; engineers, constructs, and fabricates platforms for the oil and gas sector; undertakes shipyard works and other general business activities; and procures equipment and materials for the construction of offshore production facilities. The company is also involved in the trading and installation of hardware, industrial, marine, and building related products; provision of leasing services; sourcing, fabricating, and supply of steel components; ship repairing, shipbuilding, and conversion activities; marine contracting and ship owning business; painting, blasting, and process and sale of slag; property investment, management, and development activities; fund management; golf and hotel ownership and operation; development of marina lifestyle and residential properties; trading of construction materials; development of district heating and cooling systems; electricity generation and supply, and general wholesale trade businesses; purchase and sale of gaseous fuels; and trading of communication systems and accessories. In addition, it offers jacking systems, and heavy-lift equipment and related services; project management and procurement, towage, financial, real estate investment trust management, logistics and supply chain, warehousing and distribution, data center facilities management, travel agency, and metal fabrication services; housing services for marine workers; and technical consultancy for ship design and engineering works, as well as solid waste treatment solutions. The company was incorporated in 1968 and is based in Singapore.

SATS

Today we have witnessed a Beautiful White soldier + quite a good volume and close well at $4.96,  this is rather bullish!

I am going to take advantage of this bullish wide bar and ride on the bullish momentum.

Short term wise, I think it may likely retest $5.00 then $5.05 with extension to $5.15 and above.

Not a cal to buy or sell.

Pls dyodd.




14th July 2018
The latest FY 2017 result : Group revenue was $1.725B

• Operating profit dipped 1.8% to $226.4M

• Share of results from associates and JVs rose 9.2% to $71.2M

• PATMI grew 1.4% to $261.5M • ROE remained creditable at 16.2%

• Free cash flow generated was $146.3M

• EPS improved by 0.9% to 23.4 cents

• Proposed final dividend of 12 cents per share will increase full year dividend by 1 cent to a total of 18 cents

NAV of $1.425

PE of 22.4x

Yield of 3.4% base on current price of $5.25 per share.

Dividend has been constantly increasing from 2013 to 2017.

Net Profit margin has also been generally increasing which is quite positive .

Let us take a look at the financial results numbers for past 5 years:

Hi Sporeshare@jeremyowtaip, SATS was an investment idea that I almost wanted to get in last year when it was trading around $4.60+ region. However, wonder if I was unlucky or what, the share price shortly after I had finished my due diligence started to move higher as though it disliked me from buying it. Thus, I held back and did not chase it at higher price. I was in fact hoping to get it even lower at $4.50 back then but since the price did not go lower but instead went higher, I gave up and moved on to other stock ideas.

Back then I took an interest in SATS after hearing my father talked about how my uncle entered this stock some years back when it was still trading about $1 plus to $2 plus region. My uncle held it until now and it is now at $5+ when he at least double to triple his initial capital. Well, this is not something to scream about over the past decade as there were even stocks which performed much better than SATS in their share price growth. But, it is at least better than punting a wrong penny stock and made losses along the way over the past decade.

Thus, I think my uncle who has very limited investment knowledge also knew how to exercise his common sense to pick reasonably good stocks (though may not be one of the best performing stock) at a cheap price and keep holding it until now to reap such a return on his capital turning in a 2 to 2.5 bagger over the past decade. That equates to a similar performance to ETFs or low cost fund which track S&P500 index that also became a 2.5 bagger over the past decade. This is still a somewhat decent showing of SATS share price performance over the past decade.

The revenues of SATS have compounded over the past 9 years at compounded annual growth rate (CAGR) of 6.78%. The operating income (EBIT) has compounded over the past 9 years at CAGR of 3.2%. The net income has compounded over the past 9 years at CAGR of 3.77%. The EPS has compounded over the past 9 years at CAGR of 3.6%.

The operating cash flows has compounded over the past 9 years at CAGR of 7.97%. The capital expenditure has compounded over the past 9 years at CAGR of 21.73%. The free cash flows has compounded over the past 9 years at CAGR of 5.21%. The dividends per share has grown from 10 cents 9 years ago to now 16 cents.

The returns on assets, returns on equity and returns on invested capital have took a retreat over the past 9 years but have recovered again in the recent few years back to the same levels as 9 years ago.

If we look at the past 9 years performance of SATS in terms of it's profitability in compounded growths in revenues, operating income, net income and EPS, all the CAGRs of the respective metrics point towards one conclusion. This is a steady but slow growth company. Even though it maybe making some progress in it's topline growth, it's bottom line did not follow the same growth rate and instead only turn out a low single digit compounded growth rate.

If we look at the cash flows trend, this is definitely a cash generating machine albeit not a high growth rate in generating cash. In fact, it's compounded growth in capital expenditure is much higher than compounded growth in operating cash flows and free cash flows. It has invested increasingly a lot more money in capital expenditures in order to generate cash inflows. However, if we look at the ratio of free cash flows to capital expenditures over the past 9 years, the amount of free cash flows generated in any one single year was always about twice or more than twice the amount of capital expenditure. This company was generating hell lots of free cash flows even if it increasingly need to spend more in capital expenditure. No wonder the share price has performed reasonably well over the past 9 years even though not something super fantastic to scream about.

It's current 9M17-18 financial results seems to picture a flat results y-o-y with almost everything from revenue, operating income, net income, EPS, operating cash flows being flattish. Maybe that could be partly the concern why it's share price did not went any much higher but instead dropped from it's peak of $5.85 to now $5.00 after the recent 9M results were announced.

Let's look finally at the valuation with this updated set of 9M17-18 results. If we assume that it's EPS will continue to grow at same CAGR of 3.6% and this could be a reasonable CAGR given that SATS really is not a high growth company anymore. In it's recent financial reports, even though they mentioned some possible areas of growth they are looking at and investing in, it does not seem to really boost their growth currently by any large magnitude. Well, at current large revenue level of $1.73 billion, I guess it is not easy for SATS to grow at any meaningful high double digit growth rates anymore going forward. Maybe they could turn in any single year of superb growth. But to sustain at such high double digit growth rates over the longer term may not be an easy feat for them at their current large size and also in their competitive environment. The management also acknowledges that their operating business environment is challenging and meets with cost pressure.

Using my method of estimation, at current share price of $5, the market is according a CAGR of 6.4% over the next business cycle (7 years forward) for the EPS of SATS. If we assume SATS will follow it's historical CAGR of 3.6% for it's EPS, then a fair value for it's share price will be around $3.69.

However, there could be a twist in this. Over recent two years, the EPS has grown faster than over previous period. If SATS can indeed produce a better CAGR on it's EPS perhaps around 5%, then using my method of estimation again, it's fair share price will be $4.35.

Thus, there are two possible fair values now for your consideration.
The more conservative fair value is around $3.69. The more optimistic fair value is around $4.35. In any case, this means that the share price of SATS is currently overvalued and has possible room to fall to it's fair value. This fall in share price could be likely should the full year FY17-18 results ending in Mar 18 remains flattish or see a marginal decrease which is not impossible since the 9M17-18 results are already flattish. Let's see whether SATS FY17-18 results to be announced in another about two months time will surprise on the upside or confirm my thinking that it could be a flattish year for them in their performance.

theintelligentinvestor

Reply to @jeremyowtaip : Great analysis! I have similar view that the topline is growing faster than the bottom line, like most instances, is because the business needs higher Capex to have incremental growth. I prefer the lower capex to grow type of businesses, but they are hard to find and also not cheap.

But having said that, I think overall the earnings power is still there, they have a nice moat around their business, and generating good earnings and cash flow. A 3.6% growth will mean doubling the business every 20 years. For me I don’t have problem with low growth businesses, I have some stocks that are also in the same moderate range of 3-5%. What is left is the price, at PE 21, it is on the overvalued side. But if I have bought this like your uncle at $2, I will likely keep holding it, as fundamentally it is still the same, only thing has changed is the price.

Company bought back share:

SATS did a series of share buy backs recently from mid-Feb to now. I noticed their prices they bought ranged from $4.99 to $5.20. The funny thing and irony is that you posted your comment just after they announced up till their latest share buy backs in this recent series of share buy backs. The management think their share price is cheap to have done share buy backs at current prices while we were discussing that the current share price is overvalued. I will still stand by my view that their share price is currently overvalued. What an irony here! Haha!

Not a call to buy or sell.

Please do your own due diligence.

CityDev

Don't Catch the Falling Knife!

From TA point of view, looks rather bearish.
We had witnessed the Gap Down on 6th July 2018 whereby the price has been fallen off from $11.39 to close at $9.40. Since then, it had continue to trend lower and went down to touch $8.10 on 12th Oct 2018. This is super bearish!

Looks like it may likely move down to retest the recent low of $8.10. Breaking down with high volume that may drive the price lower to challenge the support at $8.00. If $8.00 fall to hold then it may slide down to test $7.70 with extension to $7.30 level.

It might be good to wait for it to stabilize first before taking any further action to accumulate.
If it is able to stage a strong rebound and rises above $8.65 then we may likely see a reversal happening.


Not a call to buy or sell.

Pls dyodd.

STI ETF

I think is almost good time to revisit this STI ETF as can be seen from the chart, RSI is gently rising . Market may still has some room to go lower and the bottom line could be somewhere near 2830 level.

PE is about 10.69x which is still undervalue as the historical average PE is about 15x.
Dividend yield of about 3.63%.

When is the Best time to lock in profit is when the RSI is over 70 and the PE is more than 20.

Not a call to buy or sell.
Pls dyodd.

I think good investing does not require too many fanciful ideas and strategies. Just one simple no-brainer strategy that can work effectively through time and allow us to sit back and relax to enjoyr the reward of the investment that is working effortlessly to achieve our investment goal of getting 8-10% gain( passive income).

This simple strategy is to invest in a low cost ETF( Exchange Traded Fund)  such as the STI ETF (ES3.SI) or NIKKO AM STI ETF(G3B.SI) 

This method of operation is to buy into STI ETF whenever it is in an oversold condition and to sell off and take profits whenever it is in an overbought condition. 

For example, one may use the  indicator such as the Relative Strength Index (RSI) to determine overbought ( above 70 ) or oversold condition( below 30).

One may plan to buy and selling of units in several batches whenever in oversold or overbought conditions in order to get the best average price.

For example you may plan to buy in at different interval or whenever the Oversold situation happen .

In any one year, there will be three to four such window opportunities of overbought or oversold conditions to operate by buying or selling units of the ETF. At the same time, we can also kept some units always to receive dividend income and for their long term growth in price appreciation.

With discipline and patience , one should be able to get good average returns per year in excess of certain % by this one simple strategy of investing in one single ETF .I think This simple one strategy is safe and allow one to sleep soundly at night without worry of negative news affecting individual stocks in one's portfolio which could crash the share price of the particular stock the next day. This is because even if one or two of the component stocks in STI ETF of blue chips should collapse in share prices, there will be 28 others to diversify away the risk of the entire portfolio collapsing at anytime.

As for younger folks who just started out working and does not have enough cashflows and savings , one may start to spread out the different batch of buying or applying the Dollar-cost-averaging method by investing $1000 at 6-8 different batches that would be able to achieve  lower average costs per unit. 

the example are as follows:-

1. When the index price is $2.00, your $1000 will be able to buy 500 shares.
2. When the index price is $2.50, your $1000 will be able to buy 400 shares
3. When the index price is $2.90, your $1000 will be able to buy 344 shares
4. When the index price is $1.66, your $1000 will be able to buy 625 shares
5. When the index price is $3.00, your $1000 will be able to buy 333 shares
6. When the index price is $3.20, your $1000 will be able to buy 312 shares
7. When the index price is $3.50, your $1000 will be able to buy 285 shares

Total = $7000 / 2799 shares = $ 2.50 average cost per unit.

By using this method, you will be able to make a profit once the stock market rises above this low average price.

RSP :

Just sharing.

Not a call to buy or sell.




Please do your own due diligence.

StarHub

From TA point of view,looks bullish!
After touching the low of $1.61, it has managed to stage a strong recovery and head Higher to touch $1.98, this is rather positive.

Short term wise, I think it may likely re-attempt $1.98 . Breaking out with ease plus good volume that may propel to drive the price Higher towards $2.05 then $2.11.


Not a call to buy or sell.
Pls dyodd.

StarHub Ltd, an integrated info-communications company, provides information, communications, and entertainment services for consumer and corporate markets in Singapore. It operates a mobile network that provides 4G and 3G services; and manages a hybrid fibre co-axial network that delivers multi-channel pay TV services, including HDTV, Internet TV, and on-demand services, as well as ultra-high speed residential broadband services. The company also operates a fixed business network that provides a range of data, voice, and wholesale services; and offers a range of business broadband plans, as well as commercial and residential IPTV services. In addition, it offers telco services for various business needs from enterprise mobility to high speed Internet connectivity to VPN; info-communications solutions; and digital services. The company was founded in 1998 and is based in Singapore. StarHub Ltd is a subsidiary of Asia Mobile Holdings Pte. Ltd.

SGX

1st quarter result was released on Friday - 19th Oct 2018 and I think the result could be much better that market expectation of a drop in total revenue and net profit.

Overall it has managed to achieved a S$209 million, up 2% from a year earlier.
Operating profit: S$106 million, unchanged.
Net profit: S$91 million, unchanged
Earnings per share: 8.5 cents
Interim dividend per share: 7.5 cents, up by 2.5 cents

XD on 25th Oct 2018 and pay date on 5th Nov 2018.

Looks like we may see the price heading higher come Monday and head higher to fill up the gap at 7.01 and rises higher towards 7.10 with extension to 7.20 level.

Not a call to buy or sell.
Pls dyodd.

17th Oct 2018
After touching the low of $6.81 it has managed to stage a nice rebound and head higher to hit $6.95 today , this is rather bullish!

Short term wise, I think likely to continue to head higher!

Testing $7.01 then $7.10 with extension to $7.30 level .

Not a call to buy or sell.

Pls dyodd.

Going forward, the company will be giving out quarterly dividend of 7.5 cents for each quarter which is adding up to a total of 30 cents yearly dividend. A nice dividend counter to put in on our watchlist or portfolio.