02-03-2020, 08:31 PM
(01-03-2020, 10:35 AM)GenS70 Wrote: [ -> ]I check back the SGX announcement and annual reports - no mention of special, just say final dividend of 0.75c
Indeed it is. Pardon my poor memory. And thanks for pointing that out.
(01-03-2020, 10:35 AM)GenS70 Wrote: [ -> ]I check back the SGX announcement and annual reports - no mention of special, just say final dividend of 0.75c
(01-03-2020, 04:21 PM)sillyivan Wrote: [ -> ]All of the above are my own personal opinions, and in this chaotic market environment where every index is down and more bloodshed is likely, AP Oil forms a sort of a hedge of my own. Why do I say so?
- huge amount of cash and supremely ready for the downturn, no debt to cover which means 0 chance of filing for bankruptcy practically
- geography of its business is widely diversified (SG market is only around 55% of its business)
- PE ratio is very reasonable and in times of market sell-off, in general companies with higher PE ratio will see bigger declines in share value
- the lubricant industry will never see 0 demand and AP Oil is a longtime steward
- why not get paid 4% dividend while waiting for the market to recover in the years to come before redeploying capital elsewhere? with such a huge cash hoard and very reasonable dividend payout ratio, board will never need to borrow debt to maintain dividend yield. (you've seen "high dividend companies" like Starhub cutting dividend as it is unsustainable)
(02-03-2020, 08:49 PM)karlmarx Wrote: [ -> ](01-03-2020, 04:21 PM)sillyivan Wrote: [ -> ]All of the above are my own personal opinions, and in this chaotic market environment where every index is down and more bloodshed is likely, AP Oil forms a sort of a hedge of my own. Why do I say so?
- huge amount of cash and supremely ready for the downturn, no debt to cover which means 0 chance of filing for bankruptcy practically
- geography of its business is widely diversified (SG market is only around 55% of its business)
- PE ratio is very reasonable and in times of market sell-off, in general companies with higher PE ratio will see bigger declines in share value
- the lubricant industry will never see 0 demand and AP Oil is a longtime steward
- why not get paid 4% dividend while waiting for the market to recover in the years to come before redeploying capital elsewhere? with such a huge cash hoard and very reasonable dividend payout ratio, board will never need to borrow debt to maintain dividend yield. (you've seen "high dividend companies" like Starhub cutting dividend as it is unsustainable)
Unless the cash is fake -- which it could well be, since they have been slow to distribute it as dividends -- there is indeed little chance of company filing for bankruptcy. If the cash is real, then APO's operating businesses -- which are profitable -- are selling for free.
While this looks like a 'no-lose' proposition, whether there is any value to be gained by a shareholder will depend on the global/regional economy in general, and APO's ability to improve earnings and dividends, in particular.
(03-03-2020, 08:10 PM)karlmarx Wrote: [ -> ]I like to always assume the worst. Even then, the worst case scenario I can conjure sometimes still turn out to be too conservative.
While you can never really tell, the Ho family are indeed, probably quite decent.
Here's a Horatio Alger story of Ho senior, written almost 20 years ago, prior to the company's IPO:
http://ir.zaobao.com/apoil/news/apoil270501.html