01-08-2014, 02:13 PM
I guess, the next logical move would be for them to bid for another EC, since they are prudent.
I have done an updated calculation of my earlier value estimate
Let us first start with the NAV.
The current book value growth rate compounded over 2010-till date is 18%.
Let us assume this continues , but at 9% over 20 years.
In 20 years time, the book value will hit 3.54.
However, 3.54 in 2034 is not worth 3.54 today.
To arrive at a discounting rate, instead of 8.76% I have used 10.76%.
The logic being that this is a thinly traded small cap and hence you need a better margin of safety.
This shows that 3.54 in 2034 is worth 0.46 dollars / share today.
Now, the PTB has swung between 0.6 to 0.97.
Hence, pessimistically, the share is worth 28 cents and optimistically 45 cents.
Next up is the dividend income.
The payout has been estimated between 1 to 1.6 cents on a random basis.
This in today's dollars is worth 10-11 cents.
This essentially means that the value for Sing Holdings is pessimistically 38 cents and optimistically 56 cents.
Essentially, the market has priced it absolutely to perfection.
Now, would I buy into it now?
Actually, I would.
The reason is that as long as it is a fair price, one should not mind buying it.
My margin of safety is already met in the discounting I have applied.
http://sgx-stocks-sti.blogspot.sg/2014/0...dings.html
I have done an updated calculation of my earlier value estimate
Let us first start with the NAV.
The current book value growth rate compounded over 2010-till date is 18%.
Let us assume this continues , but at 9% over 20 years.
In 20 years time, the book value will hit 3.54.
However, 3.54 in 2034 is not worth 3.54 today.
To arrive at a discounting rate, instead of 8.76% I have used 10.76%.
The logic being that this is a thinly traded small cap and hence you need a better margin of safety.
This shows that 3.54 in 2034 is worth 0.46 dollars / share today.
Now, the PTB has swung between 0.6 to 0.97.
Hence, pessimistically, the share is worth 28 cents and optimistically 45 cents.
Next up is the dividend income.
The payout has been estimated between 1 to 1.6 cents on a random basis.
This in today's dollars is worth 10-11 cents.
This essentially means that the value for Sing Holdings is pessimistically 38 cents and optimistically 56 cents.
Essentially, the market has priced it absolutely to perfection.
Now, would I buy into it now?
Actually, I would.
The reason is that as long as it is a fair price, one should not mind buying it.
My margin of safety is already met in the discounting I have applied.
http://sgx-stocks-sti.blogspot.sg/2014/0...dings.html