Stock Analysis 3: Sembcorp Industries 2014Q4

Market Price (2015-1-26) = $4.25

Earnings
Approx. EPS: $0.3076 (9M14) + $0.123 (4Q13) = $0.431 (TTM)
Approx. DPS: $0.17

Order Book: $12.6B

Ratios

P/E: 9.86 (5 year historical average 10.3)
Yield: 4%

Profitability

ROE: 16.13% [Avg for SG blue chips is 11.8%]
Asset Turnover: 0.748 [Avg for SG blue chips is ~0.5]
Net Income Margin: 7 [Comparable]

Balance Sheet

Current Ratio: 1.16
Debt To Equity: 0.65 [Warren Buffet's advocate <0.5. More than 2 is bad.]
NAV: $3.02

Additional Info

Biannual distributions in Apr/Aug. Profit contribution roughly 50% utilities, 50% marine.

Personal Opinion:

- Pressure in Utilities sector locally in Singapore.
- Pressure in Marine sector, for who knows how long.
- Experiencing declining profit margin, ROE and asset turnover for 4 years, although they are still impressive.

+ Undemanding P/E of <10 for solid blue chip.
+ Government Backed. Temasek Holdings own ~50% of the company.
+ Company has been buying back aggressively since Oct, from S4.9x to S4.2x.
+ Defensive utilities industry, with strong catalyst for growth overseas (e.g. India Power Plant).

Company spending a lot on capital expenditures, which can be a pro or con depending on if you're investing for the long term. While it still has good resources, its balance sheet has weakened considerably.

Really good stock... hoping to allocate more if it hit lower 4s.

Stock Analysis 2: ST Engineering 2015Q1

Market Price (2015-1-25) = $3.39

Earnings
Approx. EPS: $0.179 (TTM)
Approx. DPS: $0.04 + $0.08 + 0.04 = $0.16 (TTM)

Approx DPS, assuming reduced 75% payout ratio = $0.134
Order Book: $13.2B

Ratios

P/E: 18.9
Yield: 4% [based on 75% payout]

Profitability

ROE: 27.2% [Avg for SG blue chips is 11.8%]
Asset Turnover: 0.8 [Avg for SG blue chips is ~0.5]
Net Income Margin: 8.43 [Comparable]

Balance Sheet

Current Ratio: 1.41
Debt To Equity: 0.47 [Warren Buffet's advocate <0.5 More than 2 is bad.]
NAV: $0.6286

Additional Info

Biannual distributions in Apr/Aug. Management has indicate intention to reduce dividend payout ratio to 75%.

Personal Opinion:

- High P/E ratio when the STI average 14.
- High P/B ratio of 5.3
- Pressure in aerospace and possibly marine sector in the coming quarters.

+ Government Backed. Temasek Holdings own ~50% of the company.
+ Insider Buying: Temasek brought in recently at $3.46. Company has been buying back since Dec, in the 3.2x to 3.3x range.
+ High profitability ratio, high barrier of entry for defense industry.

Even though it's below its historical P/E at the moment, I don't think it's selling cheap. Will wait for lower 3s and monitor its upcoming results.

Stock Analysis 1: Frasers Centrepoint Trust 2015Q1

Market Price (2015-1-25) = $2.02

Earnings
Approx. EPU: $0.0292 * 4 = $0.1168 (Latest Quarter)
Approx. DPU: $0.0275 * 4 = $0.11 (Latest Quarter)

Approx. DPU: 2.88+3.022+2.875+2.75 = $0.1152 (TTM)

Ratios

Yield: 5.4%
P/E: 17

Balance Sheet

Gearing: (Borrowings / Assets) = (644+95)/2521 = 29.3%
Interest Cover: 6.27x
NAV: $1.85

Additional Info

Quarterly distributions in Jan/Apr/Jul/Oct

Personal Opinion:

- Price is now 9% above NAV.
- Current yield of 5.4% is pretty low for a REIT, considering the additional risk.

+ Stable and recurring earnings. Heartland malls is even more defensive than those in CBDs.
+ Proven management track records with 8 years of increasing DPU.

My cash cow. Many analyst are calling for PT of >$2.1. Personally, I think it's fairly valued already at this price with limited margin of safety.


*Note: In my analysis, I tend to always use the most conservative estimates. For example, I extrapolate Q1 results for the entire year when traditionally, Q1 is always the least profitable.

That Same Feeling

OMG... That same feeling I got back in 2011/2012 is coming back again.

It's like deja-vu...

It has got to stop.

I need to keep myself occupied.

I need to clear these awful thoughts.

Yes, I must...





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