Sunday, February 28, 2016

Waiting for Godot : The long wait for Sing Holdings minority shareholders

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I had written about Sing Holdings back in 2014. The old post is here below.

http://sgx-stocks-sti.blogspot.sg/2014/02/sing-holdings.html

Simply put, my take was that

"However, chances are it will stay at this level for a year till the mood for property stocks improves, it will improve over a long enough time, but that wait is likely to be quite long"

Now, we have had an additional two years of waiting after Feb 2014.

I have looked at Sing Holdings vs a few other developers.



Simply put, Sing Holdings shareholders have endured a loss of 14% while shareholders of comparable firms like Sim lian, Chip Eng Seng and Oxley have gained anywhere between 17-50%.

Sing Holdings has been the laggard in this if you were a share holder of Sing Holdings.

Would anything change? And is this a good time to buy in to the share?

Short answer is it seems unlikely.

The current year results are bumper results with very high increases in terms of sales as well as earnings per share.

However, the reward in the form of dividends to share holders is low , i.e. the dividend has increased from 1 to 1.25 cents.

So, your only hope is that the market discounting goes from the current price to book of 0.5-0.6 to around 1.

Yes, this has happened in the past, but, chances are it seems less likely to happen in future.

Chances are that Sing Holdings will stay at a depressed level for a few years till the mood for property stocks improves, it will improve over a long enough time, but that wait is likely to be quite long, and we are talking in terms of probably a decade of holding it and probably in that decade there will be two windows in which it will appreciate to around book value.

From an opportunity cost point of view, it would be a waste to sink budgets in to this counter when there are better horses for one to ride.

Full Disclosure : I have no position in Sing Holdings and no plans to establish one.


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

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