Sunday, March 15, 2015

Vicom

I had written about Vicom a year or so back.

http://sgx-stocks-sti.blogspot.sg/2014/01/vicom.html

There is an interesting estimate on valuebuddies of the estimated impact on EPS of Vicom.

http://www.valuebuddies.com/thread-240-page-41.html

Here is a chart to show what the share price did from the period I did my post a year back at which time it was 5.6.



Roughly, one would have gained 30%+ as well as the dividend.

Over the last 5 years, the share price has performed very well.



Interestingly, i think the current spike is due to the special dividend of 9.5 cents.

Chances are this is setting up the share for a steep fall once it reaches ex-dividend.

The share price is trading at 6.55 as of this post.

My estimate is that it will trade to below 5.8 when it goes ex-dividend.

That should set up a good long term buying opportunity.

The way to evaluate this would be

a) Does Vicom trade to below 5.8 SGD from now till Dec 2015?
b) A year from now, assuming one buy below 5.8 SGD and holds it till ex-dividend date of 15 August 2016, what is the return one has made?

Disclosure : Neither long nor short, currently, likely to go long in case share price falls below 5.8 SGD. 
  
Disclaimer :- 

I am not an investment professional.

I encourage you to do your own independent "due diligence" on any idea that I write about, because I could be and probably am wrong.

Nothing written here is an invitation to buy or sell any particular stock.

At most, I am handing out an educated guess as to what the markets may do.

The market will always find a new way to make a fool out of me (and maybe, even you!).

Even the best strategies of the past fail, sometimes spectacularly, when you least expect it.

I am not immune to that, so please understand that any past success of mine will probably be followed by failures


2 comments:

  1. I doubt Vicom will drop that low just because of the special dividend. It's no stranger that they have been paying out a special dividend on top of their final dividend for a long time now, there will be pullback once it has gone xd just like any other stock but I doubt that's the reason for it.

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  2. Hi B,

    I agree that they have been paying out a special dividend for a while now.

    I think it will drop and hence, see it as a buying opportunity.

    I will do a follow up in Jan 2016 to see whether this estimate was correct.

    Thanks for dropping by the blog.

    Regards

    V

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