Thursday, February 5, 2015

A Low Enterprise Value EBITDA Portfolio for Singapore

This whole exercise was sparked off by this valuewalk article.

Does EVEBITDA work to pick stocks?

Some of you might have come across Gannon and Hoang who are huge followers of this.

One Ratio to rule them all

Greenbackd did backtesting and found that no other multiple works as well.

which-price-ratio-outperforms-the-enterprise-multiple

The short thesis is that stocks with Low EV/EBITDA will be good stocks to buy and hold.

I did this exercise for Singapore stocks using SGX stock facts.

Below are some of the companies which came out.

Company Enterprise Value EBITDA EV/EBITDA Stock Code Date
Rotary Engineering 47 50.647 0.93 R07 2/5/2015
PEC Ltd 68.1 25.8 2.64 IX2 10/21/2014
CDW Holding 28.8 10.9 2.64 D38 2/6/2015
Keong Hong 75 24 3.13 5TT 12/22/2014
Lian Beng 418 117.7 3.55 L03 2/5/2015
Nam Lee 35.7 8.4 4.25 G0I 10/20/2014
Lee Metal 283.7 54.172 5.24 593 2/5/2015
BRC Asia 218.4 41.6 5.25 B03 10/20/2014
Colex Holding 34.9 6.5 5.37 567 2/6/2015
Teckwah 96.3 17.6 5.47 561 12/22/2014
Tai Sin 163.7 29.7 5.51 500 12/22/2014
ABR Holding 70.8 11.4 6.21 533 11/24/2014
CM Pacific 1566.4 235.8 6.64 C22 11/4/2014
Asia Enterprises 19.7 2.6 7.58 A55 11/4/2014
Boardroom 109.8 14.2 7.73 B10 12/11/2014
CWT 1788.1 222.5 8.04 C14 12/10/2014
Sin Ghee Huat 41.3 5.1 8.10 B7K 10/21/2014
Stamford Tyres 187.7 22.5 8.34 S29 11/3/2014
Pan United 713.2 83.5 8.54 P52 11/24/2014
TA Corporation 290.1 30 9.67 PA3 11/5/2014
Lum Chang 232.6 21.5 10.82 L19 11/3/2014
Excelpoint 130.2 11.1 11.73 E17 10/21/2014
Eu Yan Sang 438.6 34.8 12.60 E02 11/10/2014
Chip Eng Seng 937.7 68.4 13.71 C29 10/20/2014
UOL Group Ltd 6976.4 443.2 15.74 U14 10/21/2014
Tye Soon 91.4 4.9 18.65 T08 11/3/2014
Casa 41 2 20.50 C04 10/20/2014
Hiap Hoe 1087.3 49.1 22.14 5JK 2/5/2015
Second Chance 392 15.4 25.45 528 12/24/2014
Aspial 1683.1 53.1 31.70 A30 10/20/2014

So, what I have done is to create a portfolio of ten stocks with low ev/ebitda and tried to equal weight them for a portfolio of around 5,000 SGD.

SYMBOL NAME Price Per Share # Shares Cost
IX2.SI PEC Ltd 0.475 900 427.5
D38.SI CDW Holding Ltd 0.188 2200 413.6
5TT.SI $ Keong Hong 0.375 1200 450
G0I.SI Nam Lee Pressed Metal Industries Ltd 0.3 1500 450
B03.SI BRC Asia Ltd 0.173 2700 467.1
561.SI Teckwah Industrial Corp Ltd 0.35 1300 455
567.SI Colex Holdings Ltd 0.26 1800 468
R07.SI Rotary Engineering Ltd 0.565 800 452
593.SI Lee Metal Group Ltd 0.33 1400 462
L03.SI Lian Beng Group Ltd 0.62 800 496
Total 4541.2
I will post a report a year later on this a year later.

The thesis is that

a) This portfolio will outperform the market
b) It will exhibit lower volatility and draw-down.

The portfolio is available for viewing on Google Finance.

Low EV EBITDA Portfolio


1 comment:

  1. Good exercise.

    Looking forward to see its performance at year end.

    ReplyDelete