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(10-03-2020, 10:08 PM)sillyivan Wrote: [ -> ]
(10-03-2020, 09:10 PM)jfc18 Wrote: [ -> ]Hi Ivan,

This is a forum that thrives on honest opinions and exchange of ideas. Since you have asked me, i have no qualms on sharing the coys which i have bought recently. 

DBS
UOB
OCBC
Great Eastern
Jardine Cycle and Carriage
Singapore O&G

Thanks jfc18, appreciate that. Having opposing views on 1 company does not make us enemies. Correct a fool and he'll hate you, correct a wise man and he'll appreciate you. I hope all of us are wise men here. Only by learning from each others' viewpoints can we improve ourselves. Will be having additional homework to do on these 6 companies! Smile

My 2cents worth is that 4 out of the 6 companies above belong in the STI Index. The 3 local banks already made up 38% of the STI index, after adding in JCC, it becomes about 39%. So the easier way might be to simply buy the STI ETF to get the above representation. Of course, this speaks nothing about the position sizing, but it is probably easier to be approximately correct here.

Precious limited time could be spent reviewing some of the companies that are directly hit the hardest by covid-19 (SATS!?) and will probably also bounce back the hardest if they survive. IMHO, that is a more optimized way for a part time OPMI to allocate their resources.


@karlmarx, i believe WB's quote in Oct 1974 might be coming to be apt soon:

Buffett made a public prediction about the stock market was at the bottom of the bear market in October 1974. Forbes asked "How do you feel?” to which Buffett replied, "Like an oversexed guy in a whorehouse. Now is the time to invest and get rich."
(12-03-2020, 11:52 PM)weijian Wrote: [ -> ]My 2cents worth is that 4 out of the 6 companies above belong in the STI Index. The 3 local banks already made up 38% of the STI index, after adding in JCC, it becomes about 39%. So the easier way might be to simply buy the STI ETF to get the above representation. Of course, this speaks nothing about the position sizing, but it is probably easier to be approximately correct here.

Precious limited time could be spent reviewing some of the companies that are directly hit the hardest by covid-19 (SATS!?) and will probably also bounce back the hardest if they survive. IMHO, that is a more optimized way for a part time OPMI to allocate their resources.


@karlmarx, i believe WB's quote in Oct 1974 might be coming to be apt soon:

Buffett made a public prediction about the stock market was at the bottom of the bear market in October 1974. Forbes asked "How do you feel?” to which Buffett replied, "Like an oversexed guy in a whorehouse. Now is the time to invest and get rich."

Very happy to see more VBs chiming in with their respective price targets and ideas. Watching both the US exchanges and the SGX like a hawk on a daily basis and its crazy days. Dow drops 8% in a single day, the biggest one-day plunge since 1987. News printing panic and doom on an hourly basis.

Question is how long until the market realizes that the world is not going to end and most companies will be just fine (those without heavy debt) but much cheaper and with interest rates at new historic lows? Could be weeks, could be months or could be years. But when markets start printing positive news on the coronavirus and people start to feel the effects of global QE happening now, there could be a melt-up to the high. When all you hear is negative. When everyone is sure the end is coming. This is the time a long term investor waits for. Your entry point is just icing on a cake. "There are decades where nothing happens; and there are weeks where decades happen." This quote is apt.
Speaking of Warren Buffett, I did a quick check on Berkshire's balance sheet and saw its ~$120 billion cash, which is ~30% of cash and cash equivalence. This could possibly be Buffett's last bear market, and again Buffett trumps.

While stocks (US and SG) have gotten substantially cheaper, I don't think most stocks are even fairly valued now, aka there is room for further downside. This is because people assumed no recession in perpetuity in their valuation models. Considering the unprecedented $10 trillion in corporate debt history, there are more fireworks that have yet to set off. Well, at least it was fun for those momentum investors while it lasted.
(12-03-2020, 11:52 PM)weijian Wrote: [ -> ]
(10-03-2020, 10:08 PM)sillyivan Wrote: [ -> ]
(10-03-2020, 09:10 PM)jfc18 Wrote: [ -> ]Hi Ivan,

This is a forum that thrives on honest opinions and exchange of ideas. Since you have asked me, i have no qualms on sharing the coys which i have bought recently. 

DBS
UOB
OCBC
Great Eastern
Jardine Cycle and Carriage
Singapore O&G

Thanks jfc18, appreciate that. Having opposing views on 1 company does not make us enemies. Correct a fool and he'll hate you, correct a wise man and he'll appreciate you. I hope all of us are wise men here. Only by learning from each others' viewpoints can we improve ourselves. Will be having additional homework to do on these 6 companies! Smile

My 2cents worth is that 4 out of the 6 companies above belong in the STI Index. The 3 local banks already made up 38% of the STI index, after adding in JCC, it becomes about 39%. So the easier way might be to simply buy the STI ETF to get the above representation. Of course, this speaks nothing about the position sizing, but it is probably easier to be approximately correct here.

Precious limited time could be spent reviewing some of the companies that are directly hit the hardest by covid-19 (SATS!?) and will probably also bounce back the hardest if they survive. IMHO, that is a more optimized way for a part time OPMI to allocate their resources.


@karlmarx, i believe WB's quote in Oct 1974 might be coming to be apt soon:

Buffett made a public prediction about the stock market was at the bottom of the bear market in October 1974. Forbes asked "How do you feel?” to which Buffett replied, "Like an oversexed guy in a whorehouse. Now is the time to invest and get rich."

Hi weijian,

I have long thought of simply buying STI ETF instead of just stock picking since I am rather heavy on our big three banks. However, at any point of time, some companies in STI will have rich valuations. I also don’t like the idea of owning companies which I don’t really understand. Another stumbling block is the five companies of Jardine stable. Total they have a weightage of 13% in our STI. I only fancy Jardine CC, not so much on the other four. So for our local market, I will stock pick. However, for US and Europe markets, I will go for ETFs. 

Indeed this crisis is throwing up dream companies at dream price. I have started to nimble in bit by bit last week. I think this is going to be a long battle, so I am spreading out my buys for at least six months. I reckon most Valuebuddies are like sex starved men suddenly finding ourselves in a harem.
Probably the only stocks which performed relatively better in SGX, for the past few years, were the banks, REITs, and electronics manufacturers.

The rest were either very overvalued, like retail F&B, and medical-related, or were performing poorly, in their local and global markets. Too many to list. But those in the STI include Singpost, SIA/SIAEC, Sembcorp, Keppel, Singtel, SPH, and DFI.

Owning only the winners is always preferable to owning both the good and bad stocks.

But what is considered good/bad today may or may not be so in the future.
This is probably 1 of the largest whammy on SATS, with wrt to the outbreak for its Singapore ops.

Fresh curbs on travellers from Asean, Japan, UK, Switzerland

"With three of the busiest routes for carriers here being disrupted, the airlines, airports and logistics industry will see quite severe impact," said Mr Song.

https://www.businesstimes.com.sg/governm...witzerland

The 10 busiest international routes in the world:
1.     Kuala Lumpur – Singapore: 30,187 flights
2.    Hong Kong – Taipei: 28,447 flights
3.    Jakarta – Singapore: 27,046 flights
4.    Hong Kong – Shanghai: 20,678 flights
5.    Jakarta – Kuala Lumpur: 19,741 flights
6.    Seoul Incheon – Osaka: 19,711 flights
7.    New York LaGuardia – Toronto: 17,038 flights
8.   Hong Kong – Seoul Incheon: 15,770 flights
9.   Bangkok – Singapore: 14,698 flights
10. Dubai – Kuwait: 14,581 flights
https://www.forbes.com/sites/jamesasquit...7af1d8702e
Australia just announced today that they are closing down the border to non-citizens, although citizens can still return but it is a granted that most flights will probably be cancelled as a result. With this, all major routes through Singapore are effectively closed down.

It does sound like most of the bad news have surfaced out on SATS by now. Besides a drop in dividends (Market should have priced this in already), what major worst news could surface next? Your customers ((airlines or cruise companies) going bankrupt?

Coronavirus: Travel restrictions, border shutdowns by country

https://www.aljazeera.com/news/2020/03/c...05922.html
(19-03-2020, 07:38 PM)weijian Wrote: [ -> ]It does sound like most of the bad news have surfaced out on SATS by now. Besides a drop in dividends (Market should have priced this in already), what major worst news could surface next? Your customers ((airlines or cruise companies) going bankrupt?

Coronavirus: Travel restrictions, border shutdowns by country

https://www.aljazeera.com/news/2020/03/c...05922.html

I think the question to ask is what is the impact on SATS revenue? Will SATS have half revenue for 1 quarter or even 2 quarters? If yes, does SATS need to issue share to raise cash, borrow cash at above average interest rates ... ?

The thing with travel-related companies is that they have some cost that are fixed (e.g. rentals) and some cost that can be reduced but probably not much (e.g. wages). Do these companies have sufficient cash or other means to survive this corvid 19 winter?
(19-03-2020, 10:10 PM)thinknotleft Wrote: [ -> ]I think the question to ask is what is the impact on SATS revenue? Will SATS have half revenue for 1 quarter or even 2 quarters? If yes, does SATS need to issue share to raise cash, borrow cash at above average interest rates ... ?

The thing with travel-related companies is that they have some cost that are fixed (e.g. rentals) and some cost that can be reduced but probably not much (e.g. wages). Do these companies have sufficient cash or other means to survive this corvid 19 winter?

The revenue is not the interesting story, it is quite well known. I think the interesting story is how people react to a company that is hit continuously hit by bad news.

Back to some of your questions:

(1) I have no idea whether SATS need to raise cash or not, since i am not an insider. But my guess is probably NO. They did not make any huge acquisitions in the last year at least (FY18). In the past 6 years (FY19 to FY14), they paid about 250mil SGD in total for partial stakes in Indonesian/Malaysian ground handling ops (these are the acquisitions that really move the needle). During the same time, they generated 1.088billion of FCF (or 181mil per year), paying the majority out as dividends. Total loans during this period has also reduced from 112mil (short/long term) to 95mil (long term only).

(2) Staff costs are the highest with respect to all others (working capital, raw materials, rentals etc). Mgt has already taken a voluntary pay cut, and i think there wouldn't be much surprises if we would see some staff size adjustment before anything else (rights issue etc). And finally, don't forget big brother T owns ~40% of SATS and looking at the way big bro T backed SCM last year (who is stuck in a much worst situation of huge CAPEX into a Brazilian yard just before the deep downturn came), i wouldn't be too worried with rights issue or borrow cash at above rates really.
Interesting that SATS only takes 200mil out of the 500mil available. Maybe SATS management believes that it is enough for them to tide through Covid-19's impact? A 5year note at 2.88% looks like a good deal I suppose.

SATS issues S$200m 2.9% 5-year notes

MAINBOARD-LISTED SATS on Tuesday said it has issued S$200 million worth of five-year notes.

The notes, which mature in 2025, will have a fixed coupon rate of 2.88 per cent per annum, payable semi-annually in arrear.

https://www.businesstimes.com.sg/compani...year-notes
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