3 “Boring” Singapore-Listed Companies That Could Be Potential Winners
- Original Post from The Motley Fool Sg

Investing legend Peter Lynch, is well-known for investing in dull, depressing or disagreeable businesses such as funeral home operators and waste management firms. Such companies do not provide excitement, and therefore, could be severely mispriced by the stock market.

In Singapore, there are a number of such “boring” companies that could be great investments. Let’s look at three of them.

Company #1

800 Super Holdings Limited (SGX: 5TG)is a provider of waste management, cleaning and conservancy, and horticultural services to the public and private sectors in Singapore. It is a licenced Public Waste Collector, appointed by Singapore’s National Environment Agency (NEA).

Recently, 800 Super’s share price got whacked after posting a disappointing set of financial results. For the fiscal year ended 30 June 2018, revenue fell 3.7% to S$151.1 million while net profit plunged 46.7% to S$9.1 million.

Following the earnings announcement in late August, 800 Super’s share price fell from S$1 to a low of S$0.60 in short order. Some investors might feel that the steep decline in the company’s share price was unwarranted. Future growth for the company could come from its sludge treatment facility at Tuas South, which is expected to be fully operational by December 2018. 800 Super’s new waste-to-energy plant started operations in February this year, and could generate new revenue streams and cost savings for the company once it ramps up fully.

At its share price of S$0.775 on Friday, 800 Super has a price-to-earnings (PE) ratio of 16 and a dividend yield of 1.3%.

Company #2

Advancer Global Ltd (SGX: 43Q) is a workforce solutions and services provider in Singapore. It has three business divisions: employment services; building management services; and security services.

For the six months ended 30 June 2018, Advancer Global’s revenue rose 2.7% to S$32.8 million, but its net profit fell by 29.6% to S$1.6 million. The security services division saw revenue growth largely because of higher service income from new security projects and aggregate service fees charged from on-going security projects. A fall in the number of foreign domestic workers placed out to Singapore households, and the termination of some cleaning service contracts provided some offset.

In its earnings release, Advancer Global described its growth prospects:

“[T]he Group is exploring to develop and expand its employment business in Japan, in view of its strategic alliance with Fullcast Holdings Co. Ltd., a listed company in Japan who through its subsidiaries provides a range of human resource services to companies in Japan. These plans (if crystallised), will create additional sources of earnings and growth for the Group in the long term.”

At Friday’s share price of S$0.23, Advancer Global has a PE ratio of 17 and a dividend yield of 2.6%.

Company #3

VICOM Limited (SGX: V01) provides technical testing and inspection services mainly in Singapore. It owns seven vehicle testing centres here and is a market leader with a 74.5% market share.For the second quarter ended 30 June 2018, VICOM’s top line rose 2.4% to S$24.7 million due to higher business volumes. Net profit tracked up as well, climbing 2.9% from S$6.1 million to S$6.2 million.

VICOM could see some headwinds in the sector it operates in though. In its 2018 second-quarter earnings update, it said:

“The recent fall in Certificate of Entitlement (COE) prices to their lowest levels in nearly a decade has resulted in the premature deregistration of cars with higher COEs before the 10-year mark. This is expected to affect the demand for the vehicle testing business. The non-vehicle testing business continues to face intense competition but is expected to remain stable.”

However, income investors might like VICOM as it provides a high dividend yield of around 6% at its current share price of S$6.08. Its market leadership position in Singapore’s vehicular testing industry should ensure it continues to be a cash cow.

$Advancer Global(43Q.SI) $800 Super(5TG.SI) $VICOM(V01.SI)

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OCBC at 10.96. should i buy?


Reply to @chrisleong1 : WHY ASK .. YOU DUNNO WHAT UR DOING???

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3 Singapore-Listed Dividend Companies That Are Perfect For Retirement
- Original Post from The Motley Fool Sg

Companies which are ideal to buy during retirement generally have strong businesses and excess cash to dole out to shareholders as dividends. With this in mind, let’s look at three Singapore-listed stocks that could give you a steady stream of dividend income in your golden years.

Company #1

VICOM Limited (SGX: V01) is a leading provider of technical testing and inspection services in Singapore. In 2017, the company had a 74.5% share of the vehicular testing market in our Garden City.

From 2013 to 2017, VICOM managed to grow its total dividend (including special dividends) at a remarkable annual rate of 12.5% from S$0.225 per share to S$0.36 per share. In the second quarter of 2017, VICOM adjusted its dividend policy to payout at least 90% of its net profit as a dividend; the previous ratio was 50%.

VICOM also raised its interim dividend by 2.6% from S$0.1312 per share in 2017’s second quarter to S$0.1346 per share in 2018’s second quarter. At VICOM’s share price of S$6.02 currently, the company has a trailing dividend yield of 6%.

Company #2

Next up is CapitaLand Mall Trust (SGX: C38U), the largest retail real estate investment trust (REIT) by market capitalisation in Singapore’s stock market. The REIT owns 15 shopping malls in Singapore, including Tampines Mall, Junction 8, and Plaza Singapura. REITs are required to pay out at least 90% of their taxable income to unitholders as distributions to enjoy tax benefits. As such, REITs typically have high distribution yields and are thus popular among retirees.

CapitaLand Mall Trust’s distribution per unit (DPU) has increased by 2.1% per year from S$0.1027 in 2013 to S$0.1116 in 2017. In the third quarter of 2018, the RETI’s DPU rose 5% year-on-year to S$0.0292. There is potential for more DPU growth for CapitaLand Mall Trust with the opening ofFunan in the second quarter of 2019; Funan is going to be Singapore’s shopping centre first online-and-offline shopping centre.

CapitaLand Mall Trust’s unit price is at S$2.22 right now, giving the REIT a trailing distribution yield of 5.1%.

Company #3

Singapore Exchange Limited (SGX: S68), or SGX in short, is the final company on my list. The company is the only stock market operator in Singapore and it provides listing, trading, clearing, settlement, depository, and data services.

SGX’s dividend has grown from S$0.28 per share in its fiscal year ended 30 June 2014 (FY2014) to S$0.30 per share in FY2018, which translates to an annual growth rate of 1.7%. To know more about the local bourse operator’s dividend, such as its dividend history, dividend policy, and dividend sustainability, you can head here.

At SGX’s current share price of S$7.22, the bourse operator has a trailing dividend yield of 4.2%.

$CapitaMall Trust(C38U.SI) $SGX(S68.SI) $VICOM(V01.SI)

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Now is Not The Time For You to Give Up On The Stock Market
- Original Post from The Motley Fool Sg

Fear is rampant in the stock market right now. Investors have taken it on the chin but it is not the time to give up.

Singapore’sStraits Times Index (SGX: ^STI) peaked in early May this year and proceeded to fall past the dreaded 10% mark in less than two months to enter correction territory. Today, more than six months after this year’s high, the STI is still down by around 16%.

As the downturn drags on, some investors are beginning to feel the strain. In some ways, fear has given way to exhaustion. After all, it’s been a tough year for any investor to eke out any sort of gain. Consider these statistics:

  1. Less than a quarter of the 30 companies that make up the Straits Times Index are showing positive returns for 2018.

  2. The average year-to-date return of a blue-chip stock is negative 9.7%.

Meanwhile, good news is in short supply. Instead, negative developments, such asAsian Pay TV Trust’s (SGX: S7OU) massive dividend cut, are dominating media headlines. At the face of all the mounting challenges, it is not surprising that some investors are feeling fearful — and tired too.

From the above, you can see why it is tempting to take the easy way out and give up. But you really, really shouldn’t.

Courage, Singapore Investors

Investors were feeling weary in April 2008 too.

Prior to that, the US-basedS&P 500index had peaked in October 2007 and had fallen into correction territory in less than two months. By mid-April 2008, there was no stock market recovery in sight and the index had been languishing in the doldrums for more than six months. As investors’ hearts started to waver, Motley Fool co-founders Tom and David Gardner implored our members to stay invested. In April 2008, they wrote in a memo:

“We are all touched by fear: fear of death, fear of failure, fear of what a bear market can wreak upon our retirement portfolios. But courage is forging ahead, taking action, being productive despite the fear that we feel.”

You see, our co-founders understood early on that investing is more than just numbers and a bunch of ratios. Much like today, fear was rampant in the stock market back in 2008. But as investors, we have to find the courage, despite the fear we feel, to invest.

With the benefit of hindsight, we can now see the wisdom in their timely words — that is if we had stayed invested.

From the start of April 2008, shares of companies such as local bankDBS Group (SGX: D05), airline catererSATS (SGX: S58) and vehicle test inspectionVICOM (SGX: V01) have delivered total returns of over 120%, 265%, and over 500%, respectively. Investors that exited the market back then would have missed out on these satisfying gains.

So, like Tom and David Gardner before me, I say to you:Courage, Singapore investor.

Our Promise to You

Even in uncertain markets, there is still a way to invest profitably. It’s about knowing where to find these opportunities.

We do not shy away when markets fall.

That’s why we can consistently offer our members one stock pick every month … Even as the stock market suffers from bouts of fear and exhaustion.

Since we started, we have 24 active stock recommendations. We think they will be able to weather through tough times and potentially make you wealthy over the long term.

If you want to find out what stocks to buy in these uncertain times, simply click here to get started.

$STI(^STI.IN) $DBS(D05.SI) $SATS(S58.SI) $VICOM(V01.SI) $S&P 500(^GSPC.IN)

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What Investors Should Know About VICOM Limited’s 2018 Third-Quarter Earnings
- Original Post from The Motley Fool Sg

VICOM Limited (SGX: V01)is a leading provider of technical testing and inspection services in Singapore. Yesterday, the company announced its earnings for the third quarter ended 30 September 2018. Let’s look at the main takeaways from the announcement here.

Financial highlights

Revenue for the reporting quarter grew 2.7% year-on-year to S$25.2 million, up from S$24.6 million a year ago. VICOM said the rise in revenue was due to “higher business volumes”.

Total operating costs rose 1.0% to S$17.3 million. Consequently, operating profit increased by 6.4% to S$8.0 million.

Net profit climbed from S$6.4 million last year to S$6.7 million in the 2018 third-quarter, improving 5.1%. As a result, earnings per share for the latest quarter was 7.58 cents, increasing from 7.21 cents in the corresponding quarter last year.

For the nine-month period, revenue went up by 2.2% year-on-year to S$74.4 million while net profit rose 3.4% to S$20.0 million.

As of 30 September 2018, VICOM had S$92.0 million in cash and cash equivalents with no debt. In comparison, as of the end of 2017, it had S$107.5 million in cash and cash equivalents with zero borrowing.

Operating cash flow for the reporting quarter slumped 37.6% year-on-year, from S$11.0 million to S$6.9 million, mainly due to adverse working capital changes. Capital expenditures in both 2018 and 2017 third quarters were somewhat similar.

Looking ahead

As for its outlook, VICOM commented:

“The Land Transport Authority recently announced that there will be more Certificates of Entitlement (COEs) for the three-month quota period starting from November 2018 compared to the preceding quota period due to premature scrapping of cars bought when the COE prices were high. This is expected to further dampen COE prices leading to more deregistration thereby reducing the demand for the vehicle testing business.

For the non-vehicle testing business, there are signs of recovery in some industries that we serve but competition remains intense. Demand is expected to remain stable.”

VICOM shares ended Wednesday at S$6.02 apiece, giving a trailing price-to-earnings ratio of 20 and a dividend yield of 6%.


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The Singapore Stock Market Is Rising Now, But You Shouldn’t Be Rejoicing
- Original Post from The Motley Fool Sg

At the time of writing, the Straits Times Index (SGX: ^STI) is up 20 points, or 0.7%, to 2,986. It could well be heading back towards the psychological level of 3,000.

The Singapore stock market may be taking a cue from the US stock market. Broad market indices in the US such as the Dow Jones Industrial Average and S&P 500 rose 1.8% and 1.6% respectively, on Tuesday.

However, I’m not all that excited about the rise in the stock market right now. You should not too, unless you are looking to sell all your stocks and grow your money for the long-term in another way.

Wealth builder

The stock market has generally given higher returns than other assets such as bonds, gold, properties, and of course, our regular savings account. That’s why most of us should be investing in the stock market to build our wealth.

Those who had the conviction to invest in great companies throughout the 2008/2009 great financial crisis would have seen their money grow at a fast pace. Then, the Straits Times Index plunged by over 60% from peak-to-trough, and some of the rarest opportunities were given to investors on a silver platter.

During the depths of the crisis, banks such as United Overseas Bank Ltd (SGX: U11) andDBS Group Holdings Ltd (SGX: D05)were trading below their book values. Vehicular and non-vehicular testing company, VICOM Limited (SGX: V01), was selling at a trailing price-to-earnings ratio of around 9 in March 2009; its share price has increased by more than 300% since, and its PE ratio is now near 20.

There are stories abound of fundamentally-strong companies whose share prices were beaten down during the crisis 10 years ago, but have since gone on to recover.

When fear prevails, logic is thrown out of the window. As such, when the market throws a major tantrum, some shares will start trading below their intrinsic values. If we can identify them, we can grab the opportunity to invest. If the shares we already own are sitting on paper losses, and the reasons why we bought them in the first place are intact, we can look into buying even more of them. Who wouldn’t like a great stock market sale?

Taking a leaf from the Oracle of Omaha

One of the best investors in the world, Warren Buffett, shared the following comments in his 1997 letter to shareholders:

“A short quiz: If you plan to eat hamburgers throughout your life and are not a cattle producer, should you wish for higher or lower prices for beef? Likewise, if you are going to buy a car from time to time but are not an auto manufacturer, should you prefer higher or lower car prices? These questions, of course, answer themselves.”

But now for the final exam: If you expect to be a net saver during the next five years, should you hope for a higher or lower stock market during that period? Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall. In effect, they rejoice because prices have risen for the “hamburgers” they will soon be buying. This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices.”

As Buffett quipped, if we are net savers, we should be excited only if share prices sink.

The stock market seems to be fearful now about the US-China trade conflict, rising interest rates, heightened geopolitical risk, and falling oil prices. We should be happy when stock prices fall, unless we are looking to sell all our investments and put our cash in Khong Guan biscuit tins to protect our wealth.


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3 Companies Which Will Let You Sleep Well During A Market Downturn
- Original Post from The Motley Fool Sg

With the current market turmoil, investors may be asking themselves – which companies would I invest in which will give me peace of mind?

The recent debacles surrounding Noble Group Limited (SGX: N21) and Hyflux Ltd (SGX: 600) has not helped. When “blue-chip” companies can fall by the wayside and get into serious trouble, investors may be understandably stressed over which companies may be next to fall.

To address that concern, I have highlighted three companies below which have strong balance sheets and which generate consistent free cash flows; These are attributes which should allow investors to sleep well at night.

Straco Corporation Limited

Straco CorporationLtd(SGX: S85) is an operator of tourism assets, including two aquariums in China and a 90% stake of the Singapore Flyer.As at 30 June 2018, Straco had S$181.4 million of cash on its balance sheet, with only around S$43.9 million of debt. Between 2013 and 2017, a period of five years, the companygenerated an average free cash flow of S$51.6 million per year. In our view, Straco has a strong competitive moat as it owns high-quality assets. With the company’s net cash balance and ability to generate strong cash flow, it should be able to weather a downturn in the economy. For 2017, the company paid out a final dividend of S$0.25 per share. That gives Straco’s shares a trailing dividend yield of 3.5%, based on its closing price of S$0.71 on Friday last week.

VICOM Limited

VICOM Limited (SGX: V01) is a leading provider of technical testing and inspection services in Singapore. The vehicle test firm has a dominant market share for vehicle testing in Singapore, enabling the company to generate strong free cash flow and maintain a balance sheet that is debt-free. At the end of its 2018 second-quarter, the company’s balance sheet had S$97.9 million in cash and no debt. In addition, between 2013 and 2017, VICOM generated an average of S$30.4 million per year in free cash flow. The company paid out a full year dividend of S$0.36 for 2017. At its last share price of S$5.98 last Friday, VICOM had a trailing dividend yield of 6.0%.

Boustead Singapore Limited

Boustead Singapore Limited (SGX: F9D) was established back in 1828 and is a global service provider of infrastructure-related engineering services and geo-spatial technology solutions. The company has four business divisions – energy-related engineering, real estate solutions, geo-spatial technology and healthcare. Much like VICOM and Straco, Boustead has a consistent record of strong free cash flow generation, even as two of its divisions suffered from a downturn over the past few years. As at 30 June2018, the company’s balance sheet had S$280.5 million of cash and S$72 million of debt. Over the last five financial years, its average free cash flow per year was S$36.2 million. Boustead also paid out a total dividend of S$0.03 per share for the fiscal year ended 31 March 2018. At its last closing price of S$0.78 on 26 October, the company had a trailing dividend yield of 3.8%.

$Hyflux(600.SI) $Boustead(F9D.SI) $Straco(S85.SI) $VICOM(V01.SI)

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