ST Engineering

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Obama486

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old stuff


5 Reasons Why ST Engineering Looks Like A Good Buy

I recently wrote about how ST Engineering under performed the index over the last 5 years, as investors paid too high of a price for it and ended up only with disappointment. Today I'm gonna talk about why this wonderful company looks like a good buy.

Trading Close to 2 Years Low

ST Engineering has declined 15% over the last 12 months! Within the last 2 years it ran up to as high as 4.56 before crashing down to a recent low of 3.22, mainly due to its third quarter results falling behind analyst expectations.

Below Historical PE

Like I mentioned in my previous article, investors in the past paid too high of a price of way over 20 times earnings, this of course did not translate into good returns. Currently its only trading at slightly over 18 times earnings which gives some sort of comfort. However do note that this doesn't mean ST Engineering is selling cheap, I do think that its a great company with a wide moat selling at fair price, the kind that Warren Buffett wouldn't mind paying up to hold for long term.

Insider Buying

Looking at the recent SGX announcement page, one would find that two of its major shareholders have been picking up more shares of ST Engineering. Temasek which owns a 50% stake bought more at 3.46 and Aberdeen which owns close to 10% bought more at 3.60, so like how Peter Lynch used to say "when insiders sells, there could be many reasons, but when insiders buy it only means they think it will go up!" Currently it still trades below both their recent purchase prices.

Dividend Yield

Even thou management have stated that they would be paying out less of their earnings as dividends (a reduction to 75% of earnings), I do think that they should not have any major problems paying out at least 14 cents for a yield of at least 4% which is still pretty decent. I also estimate them to grow earnings at around 5% annually, so investors could expect around 8-10% long term returns from this defensive blue chip.

Government Backed

What does Starhub, Semb Corp Industries and ST Engineering have most in common that I like them so much? They are all government backed blue chips! These are the solid companies that I would want to hold when facing a potential market crash (well US looking more like a bubble day after day breaking record highs) and not a basket of highly geared penny stocks. If this makes you sleep well at night while collecting constant dividends, why not?

"If you don't study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards." - Peter Lynch

"If you're prepared to invest in a company, then you ought to be able to explain why in simple language that a fifth grader could understand, and quickly enough so the fifth grader won't get bored." - Peter Lynch
 
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Bombermankid

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Old stuff still post? Push your own stocks more thanks


Obama486 said:
old stuff


5 Reasons Why ST Engineering Looks Like A Good Buy

I recently wrote about how ST Engineering under performed the index over the last 5 years, as investors paid too high of a price for it and ended up only with disappointment. Today I'm gonna talk about why this wonderful company looks like a good buy.

Trading Close to 2 Years Low

ST Engineering has declined 15% over the last 12 months! Within the last 2 years it ran up to as high as 4.56 before crashing down to a recent low of 3.22, mainly due to its third quarter results falling behind analyst expectations.

Below Historical PE

Like I mentioned in my previous article, investors in the past paid too high of a price of way over 20 times earnings, this of course did not translate into good returns. Currently its only trading at slightly over 18 times earnings which gives some sort of comfort. However do note that this doesn't mean ST Engineering is selling cheap, I do think that its a great company with a wide moat selling at fair price, the kind that Warren Buffett wouldn't mind paying up to hold for long term.

Insider Buying

Looking at the recent SGX announcement page, one would find that two of its major shareholders have been picking up more shares of ST Engineering. Temasek which owns a 50% stake bought more at 3.46 and Aberdeen which owns close to 10% bought more at 3.60, so like how Peter Lynch used to say "when insiders sells, there could be many reasons, but when insiders buy it only means they think it will go up!" Currently it still trades below both their recent purchase prices.

Dividend Yield

Even thou management have stated that they would be paying out less of their earnings as dividends (a reduction to 75% of earnings), I do think that they should not have any major problems paying out at least 14 cents for a yield of at least 4% which is still pretty decent. I also estimate them to grow earnings at around 5% annually, so investors could expect around 8-10% long term returns from this defensive blue chip.

Government Backed

What does Starhub, Semb Corp Industries and ST Engineering have most in common that I like them so much? They are all government backed blue chips! These are the solid companies that I would want to hold when facing a potential market crash (well US looking more like a bubble day after day breaking record highs) and not a basket of highly geared penny stocks. If this makes you sleep well at night while collecting constant dividends, why not?

"If you don't study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards." - Peter Lynch

"If you're prepared to invest in a company, then you ought to be able to explain why in simple language that a fifth grader could understand, and quickly enough so the fifth grader won't get bored." - Peter Lynch
Click to expand...
 
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Obama486

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obv clone account

This message is hidden because Bombermankid is on your ignore list.
 
Keverus

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I know the cat president ignored me, so this is more for the other users.

but then again, at some point, he will gian and un-ignore me de la. i know, he knows, everyone knows.

:s13:

Obama486 said:
Government Backed

What does Starhub, Semb Corp Industries and ST Engineering have most in common that I like them so much? They are all government backed blue chips! These are the solid companies that I would want to hold when facing a potential market crash (well US looking more like a bubble day after day breaking record highs) and not a basket of highly geared penny stocks. If this makes you sleep well at night while collecting constant dividends, why not?
Click to expand...

Govt-backed means jack sh1t these days. Look at SCI. in 2013, it was trading around $5.40. Today, it sits under $4. of course you can argue that SCI was hit by oil, but take a look at ST Eng yourself. despite being govt-backed, it's price has slided down over the 2 years as well.
 
Keverus

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Obama486 said:
Insider Buying

Looking at the recent SGX announcement page, one would find that two of its major shareholders have been picking up more shares of ST Engineering. Temasek which owns a 50% stake bought more at 3.46 and Aberdeen which owns close to 10% bought more at 3.60, so like how Peter Lynch used to say "when insiders sells, there could be many reasons, but when insiders buy it only means they think it will go up!" Currently it still trades below both their recent purchase prices.
Click to expand...

not exactly insider buying.

fund houses do make mistakes as well. if fund houses are that good, then let's just invest in unit trusts. but i rmb our dearest cat president is very adamant against unit trusts. ;)
 
Keverus

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Obama486 said:
Trading Close to 2 Years Low

ST Engineering has declined 15% over the last 12 months! Within the last 2 years it ran up to as high as 4.56 before crashing down to a recent low of 3.22, mainly due to its third quarter results falling behind analyst expectations.
Click to expand...

low can go lower. high can go higher. trading near/at historical 2 year low doesnt mean anything. irrelevant. this is a straw man argument.
 
wahkao3

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Keverus said:
Govt-backed means jack sh1t these days. Look at SCI. in 2013, it was trading around $5.40. Today, it sits under $4. of course you can argue that SCI was hit by oil, but take a look at ST Eng yourself. despite being govt-backed, it's price has slided down over the 2 years as well.
Click to expand...
agreeddddd
 
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amandaloves

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Obama486 said:
welcome onboard this warship

3.30 strong support

yield 4.5%

PE 20

huat ah %$$$$$$$$$$$$$
Click to expand...

That's my limit order~! :D

Btw can you update your blog with your latest portfolio include average price of each counter. :s13:

I can't wait to see your latest acquisition from GSS~! :s22:
 
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