Tuesday, January 10, 2017

The Long Wait continues (For Sing Holdings shareholders)

I had written about Sing Holdings back in 2014. 

The old post is here below.

I had done an update on this in 2016.

Now, we are here in 2017 January.

My assessment in 2014 was

"However, chances are Sing Holdings 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"

 After the 2016 post, if you ask me, what has changed in the last one year, 

The closing price as of Jan 9, 2017 was 0.32.

The closing price as of Jan 12, 2016 was 0.32.

In short, there has been no change in the prices.

Shareholders of comparable firms like Sim Lian, Chip Eng Seng and Oxley have gained anywhere between 6-40%.

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

Short answer is it seems unlikely.

The past year saw 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 was 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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