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