Chip Eng Seng – What really matters in a Stock

patience is a virtue…. still cant find a good company..hais

as I continue to find the next company for my $2k

Construction & Engineering | Founded in 1998 | Build HDB (Pinnacle -famous one)/Condo , Woodlands driving centre

Comparison will be done with Low Keng Huat [LKH] (Closest market cap)

1)  IDENTIFICATION OF COMPANIES THAT ARE UNDERVALUED.

  • Price to book ratio : 0.542 (45.8% below its fair value) – (LKH at 0.648)
  • Price to earning ratio : 13.387 (Growing above industry standard – 0.23) – ( LKH at 5.162)

2)  LEARN ABOUT THEIR NUMBERS

  • Debt To Equity : 155.5 ( LKH – 62 )  Capital intensive industry
  • Growth Performance : -17.41% (LKH -7.37%)
  • Current Ratio : 7.07 (LKH – 8.719) 
  • Cash flow per share : 0.0742
  • Average management ability ( Stagnant dividend  | Positive net income/gross profit margin | overall positive cash flow – increase operation cost)screen-shot-2017-01-22-at-1-31-36-pmscreen-shot-2017-01-22-at-1-31-30-pm

3) TECHNICAL ANALYSIS

Screen Shot 2017-01-22 at 1.51.59 pm.jpg

Weekly Chart

Overall market trend is leaning to the bearish side as the previous high fails to break highest high. Stock price is currently at key area, where momentum are usually found. If price action closes below the blue line (Key price level), stock price will have a very high probability to drop lower.

4) Would I be vested into it?

No! no dividend growth over 5 years (Main criteria) and negative company growth. But for those who are planning to buy this company, it currently has a good risk – to – reward ratio of 1:5. (9% of ur capital to 45% gain).

Some article for your read:

 

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