*Official* MasterLeong Thread - Part 2

[SeVenn]

I got play a bit of penny before this but realised it wasnt't meant for me. And when DBS <15 for a while I sat on sidelines, now smell smoke. So that was one thing I learnt too. But as mentioned the other undervalued companies are risky but I will slowly do some research on them.

Still remembered ML shout REITs but I stuck with Jumbo..

Well Jumbo ran up nicely. Congrats

 

[limjq44]

CMT book value is 1.87. How confident are you that it will drop back there within the next 3 months, 6 months or even a year?

You can have as nice a TP to enter as you want. Whether or not the market ever goes there is another question. Someone who missed the boat by aiming 0.8x book will now be forced to take it at a higher valuation or not invest at all.

There are lower quality assets trading below book value, but are those the kind of assets you want to own?

I thought it's 1.89? Where do you get the latest book value? I'm pretty sure that within this year or so, it will drop, just don't know when. 1.98 doesn't seem to be the price where FED rate hikes are placed into account.

 

[lbs]

CMT book value is 1.87. How confident are you that it will drop back there within the next 3 months, 6 months or even a year?

You can have as nice a TP to enter as you want. Whether or not the market ever goes there is another question. Someone who missed the boat by aiming 0.8x book will now be forced to take it at a higher valuation or not invest at all.

There are lower quality assets trading below book value, but are those the kind of assets you want to own?

i won't be confident of course. but there are other stocks to buy right? why die die must buy CMT? Miss the boat then miss the boat. Move on... There are other companies, other countries even, to look at ...

 

[limjq44]

i won't be confident of course. but there are other stocks to buy right? why die die must buy CMT? Miss the boat then miss the boat. Move on... There are other companies, other countries even, to look at ...

Sometimes waves will send you boat back and you can board again Better to board a safer boat than a boat that will sail in a heavy storm and risk being capsized!

 

[SeVenn]

I thought it's 1.89? Where do you get the latest book value? I'm pretty sure that within this year or so, it will drop, just don't know when. 1.98 doesn't seem to be the price where FED rate hikes are placed into account.

Grabbed from Yahoo Finance. Might not be the latest numbers . It's still down over 10% from high despite book value creeping up. What is your forecasted impact on CMT's earnings for every 25 basis points increase?

i won't be confident of course. but there are other stocks to buy right? why die die must buy CMT? Miss the boat then miss the boat. Move on... There are other companies, other countries even, to look at ...

There is always a reason when counters trade at or below book value. Not everyone is comfortable buying such counters. Some don't mind paying a slight premium for safer counters. Don't see anything wrong with that.

Buying counters in other countries subject you to additional forex risk. I wouldn't recommend it to beginners.

 

[Layers]

Must siam Areit and plife I guess. Overvalued.

Sent from Sony E6853 using GAGT

 

[lbs]

1.86 is its book value
Erm don't worry la. 1.98 won't die. Just don't go all in. Leave some capital to average down.

 

[MasterLeong]

I got play a bit of penny before this but realised it wasnt't meant for me. And when DBS <15 for a while I sat on sidelines, now smell smoke. So that was one thing I learnt too. But as mentioned the other undervalued companies are risky but I will slowly do some research on them.

Still remembered ML shout REITs but I stuck with Jumbo..

Jumbo is a small cap stock without 5 year or 10 year track record, so its a more risky stock... can refer to penny thread for advise

blue chips boat now slowly coming back... if big red red... do not be afraid to board reits/telcos

 

[Layers]

Both govt agency? @@

Sent from Sony E6853 using GAGT

 

[MasterLeong]

Wow.. 1.98 is quite a high price to enter at.. according to MasterLeong

CMT really high quality counter

ideally is want to go in at 1 times book

but even pay up to 10% premium to book is fine... say even $2 go in is fine if u want to hold for long term

 

[MasterLeong]

Excerpted from Investing note post:

Which also extracted from Business Times.

A rough-guide but useful chart for those are planning for financial freedom.

50% savings with 6% yield would take 11.9 yrs towards financial freedom.

wow nice, very good share man

if you save a bit more or your money work a bit harder, I think 10 years to FF us a reasonable target if one really puts max effort

cheers

 

[MasterLeong]

Cdg, I wait for result first (may miss the boat). Should be around in feb.

a lot of companies will be announcing full year results in late jan to end of feb

those picks that you no so confident is always okay to wait for the numbers to get a clearer picture then go in

 

[MasterLeong]

Flower withering

Die le Delgo didi drop

drop 1-2% u so scared liao ah? hahahaha

have to get use to it be didi

must learn to tahan even 10-20% paper losses on blue chips, its pretty common

like when STI was 2500... many of us sitting on 10-20% paper losses on many blue chips

 

[SeVenn]

1.86 is its book value
Erm don't worry la. 1.98 won't die. Just don't go all in. Leave some capital to average down.

+1 to this. Never ever buy your entire planned allocation for a counter in 1 shot. If buying during a downtrend, it is very unlikely you will catch the bottom on your first entry.

 

[MasterLeong]

ST Engineering’s aerospace arm wins $840 mil in contracts in 4Q
By PC Lee / theedgemarkets.com.sg | January 16, 2017 : 5:38 PM MYT
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SINGAPORE (Jan 16): ST Engineering announced that its aerospace arm, ST Aerospace, has secured new contracts worth about $840 million in the 4Q of 2016 for services ranging from line and airframe maintenance to component repair and overhaul. This brings total value of contracts won for the full 2016 to $2.57 billion.

The total contract value for 4Q16 includes a five-year agreement with Alaska Airlines to exclusively provide maintenance, repair and overhaul (MRO) maintenance support for the airline’s CFM56-7B engines that power its fleet of Boeing 737-700 and 737-900 aircrafts.

Included in the 4Q16 contracts are also line and heavy airframe maintenance for commercial airlines and military operators. Other contract wins include several landing gear overhaul agreements from various airlines, a long-term landing gear repair contract from an established national carrier and multiple contracts for EcoPower engine wash services including a one-year extension contract worth US$2.6 million ($3.7 million) for a commercial airline.

In addition, the aerospace sector redelivered a total of 880 aircraft for airframe maintenance and modification work in 4Q16. A total of 10,639 components, 42 landing gears and 33 engines were processed, while 2,388 engine washes were conducted.

During the quarter, ST Aerospace continued to expand its MRO capabilities. Its airframe MRO station in Guangzhou, China, received approval by the Civil Aviation Authority Malaysia to provide line maintenance service at the Shantou Airport in Guangdong province.

As for new capabilities, ST Aerospace received Singapore Technical Standards Order certification, a performance standard issued by the Civil Aviation Authority of Singapore for specified materials, parts, processes, and appliances used on civil aircraft, for its in-house aircraft seats design.

The above developments are not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of ST Engineering for the current financial year.

Shares of ST Engineering closed 2 cents lower at $3.32.

 

[MasterLeong]

Is SPH’s restructuring going to be worth the effort?
By Gwyneth Yeo / theedgemarkets.com.sg | January 16, 2017 : 4:23 PM MYT
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SINGAPORE (Jan 16): Singapore Press Holdings’ results for 1Q17 failed to meet analysts’ expectations after earnings fell by 44% to $45.7 million.

CIMB noted that the group’s earnings only achieved 18% of its full year estimates and has maintained its “reduce” recommendation for SPH with a lowered target price from $3.35 to $3.31.

During the quarter to November, the group’s earnings had been hit by one-off charges of $15.9 million from the review of their media business and the impairment of an associated company, as well as a $1.8 million fair value loss on hedges for its portfolio investments.

CIMB’s Jessalynn Chen notes that the one-off charges included $7.2 million in retrenchment and outplacement benefits, $2.6 million in impairment charges on a printing press line for capacity optimisation, and $4.8 million in impairment charges for the restructuring of an associate in the video business.

As of end Nov, the group had reduced its headcount by 2% to 4,107. Excluding the extraordinary items, Chen estimates that the group’s operating profit would have fallen by 12%.

The key lies in the 14% decline in SPH’s advertising revenue, despite the marginal increase in circulation revenue from a higher cover price. In fact, Rachael Tan and Cheryl Lee, analysts from UBS, are not optimistic that SPH would see a recovery in earnings within the next few quarters.

“Our Straits Times Saturday weekly page tracker shows a 17% decline for Dec-16 to Jan-17 so far, pointing to further weakness in advertising revenue, which accounts for a hefty 52% of total revenue,” they said in a note on Monday. “In addition, we expect staff-resizing costs to continue as the Group progresses towards its 10% staff reduction target.”

UBS has a “sell” rating on SPH with a target price of $3.13. Tan and Lee also lowered their earnings forecast by 4% for FY17 and FY18.

On the back of the 1.3% gross domestic product (GDP) growth forecast for 2017, DBS Group Research’s Alfie Yeo and Andy Sim anticipate that Singapore’s industry advertising expenditure will fall further by 7%, from the 5% decline previously.

To that end, DBS has a “fully valued” rating for SPH with a target price of $3.32.

Shares in SPH are trading at $3.57 on Monday.

 

[MasterLeong]

M1, StarHub upgraded after signalling potential collaboration
By Jude Chan / theedgemarkets.com.sg | January 16, 2017 : 11:43 AM MYT

SINGAPORE (Jan 16): DBS Group Research has upgraded telcos M1 and StarHub to “hold” from “fully valued” after the pair last week signalled their intention to join hands against the competition.

The research house says it estimates capex savings of around 20% for both companies from 2018 onwards as a result of the potential sharing of radio access network (RAN).

“In highly dense and urbanised Singapore, we estimate RAN to account for most of the capex with sharp rise in data,” says DBS analyst Sachin Mittal in a report on Jan 13.

M1 and StarHub on Jan 12 signed a Memorandum of Understanding (MOU) to study potential further collaboration in mobile infrastructure sharing, with a focus on sharing RAN, backhaul and access assets.

In a joint statement, the two companies said the pooling of network resources will allow them to roll out more cost effective next-generation networks to meet fast growing demand of mobile data services.

“More importantly, we think TPG may find it more challenging to compete with players having sizeable network capacity,” Mittal says.

The smaller of the three incumbent telcos, M1 and StarHub were expected to see their earnings decline after TPG Telecom on Dec 14 entered the fray to become Singapore’s fourth mobile operator.

Mittal says the capex savings from sharing of radio access network will help M1 sustain its 80% earnings payout ratio in FY18 and beyond, representing a yield of approximately 6%.

The collaboration will also help StarHub sustain its fixed dividend commitment of 20 cent distribution per share (DPS), representing a yield of approximately 6.5%.

DBS has raised its target price for M1 and StarHub to $2.09 and $3.01, from $1.78 and $2.65, respectively.

As at 11.36am, M1 is trading 1 cent lower at $2.09 while StarHub is trading 2 cents lower at $3.01.

Source:


Woot!!

this is very good news

bullish on M1 and Starhub to fight well against TPG!!!!!!!!!!!

 

[SeVenn]

Both govt agency? @@

Sent from Sony E6853 using GAGT

Should be the same transaction ba? SLF is the investing arm of NTUC?

 

[Maeda_Toshiie]

Anyone can copy/paste the entire article here? Thanks.

I have high savings rate of 90% since I started working a long time ago. So according to this chart and even with very low yields of 1-1.5%. It only took 7.1 - 10.6 years to achieve financial freedom. No wonder I had it easy.

Thanks for sharing this chart. Once again reaffirms my theory since I was a kid. Higher savings rate is more important than earning more. Will keep pushing myself to save not work haha.

It's a mix of percentage savings and amount of income. You can achieve savings of 90% but live with $300 per month (like someone *cough*). What's the point of having a $300 lifestyle? That chart assumes that you maintain that same lifestyle all the way till retirement. I sure won't want to live at $300 per month. Even SGD1000 in 2017 dollars isn't very extravagant for living in SG.

On top of that, inflation will eat into your purchasing power (still the same $1000 a month 30 years from now?), unexpected expenses to replace unexpected breakage in your own home, and health cost which accelerates not just from inflation but from ageing (out of pocket cost for SG is pretty high).

End of the day, you need a heck larger margin of safety to really retire early to be sure that you don't run into serious problems a few decades later, when you have major problems trying to return to the workforce.

 

[onlybuyneversell]

a lot of companies will be announcing full year results in late jan to end of feb

those picks that you no so confident is always okay to wait for the numbers to get a clearer picture then go in

ya I still not very confident over valuing growth stocks.

So far only settled on tp for rmg and thaibev. CDG will wait for the result before I set a tp.