SingPost – What really matters in a Stock

Comparison will be done with Keppel Telecommunications & Transportation Ltd (K11)

1)  IDENTIFICATION OF COMPANIES THAT ARE UNDERVALUED.

  • Price to book ratio : 1.653 (65.3% Above fair value) K11 – 1.218
  • Price to earning ratio : 147.619 ( Above industry standard – 34.81) K11 – 9.516

2)  LEARN ABOUT THEIR NUMBERS

  • Debt To Equity :20.7% | 55.05%
  • Growth Performance : -35.14% | 5.64%
  • Dividend Yield : 3.93% [5 Years] | 2.45% [5 Years]
  • Current Ratio : 1.035 [Volatile ratio within 5 years] |1.461 [ Stable ratio within 5 years]
  • Book Value per share : 0.7503 | 1.44
  • Cash Flow per share : 0.0382 | 0.232  [Negative cashflow for the past two years but still has a better cashflow than Singpost]
  • Below average management ability (No progressive Dividend Growth | Low net income growth | Poor cash flow – price of stock is 31 times of its cashflow).Screen Shot 2017-06-03 at 10.11.21 amScreen Shot 2017-06-03 at 10.11.17 am

3) TECHNICAL ANALYSIS

Screen Shot 2017-06-03 at 10.17.00 am.jpg

Price action on weekly chart shows that it is trending in a bearish direction where market has just broke off 2014 key price. It has a higher probability to trend lower as it continues to break 2016 low while gapping down with a surge in trading volume. A market execution order will put you into a 1:6.5 RR.

4) Would I be vested into?

No, Keppel (K11) looks like a better investment than this.

Fundamentally:

  • Poor growth rate (Talks about management ability
  • Cashflow and dividend is not of my entry criteria
  • Poor current ratio track record
  • Over-rated stock

Technically:

  • Has a good RR ratio but market shows no sign of bearish exhaustion
  • Broke monthly level too and daily is continuing to make greater low

 

“+1 Knowledge point”

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2 thoughts on “SingPost – What really matters in a Stock

  1. I beg to disagree with the analysis as we are comparing companies in 2 different trades with different growth and business environment. SingPost valuation presently affected by impairment losses. Any analysis using traditional methods will show SingPost is inferior as impairment losses are just accounting numbers that appears not only in balance sheets but also affects the other financial statements and operating conditions. Impairment losses is a mistake made of the past and stock valuation must be a projection of the future. I would agree with your analysis if it assume that impairment losses of SingPost is a recurrent item also in the future.

    Like

    • Hey Victorso!
      Thanks for your comment! I can’t deny that the comparison are fair and just. My intention of the comparison is mainly more like an opportunity cost of an investment in the same “listed” industry.

      I believe that mistakes made in the past is due to a management issue that can be repeated if it’s not change (Only numbers can tell). My valuation methodology of the future is based on management’s repeated ability in the past.

      All in all, I’m not a fortune teller. I’m just a gambler learning how to play the odds from youtube tutorials.

      Cheers

      Like

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