Which Blue-Chip Property Developer Is The Cheapest Now?
- Original Post from The Motley Fool Sg

Property stocks took a beating in July when the Singapore government implemented additional property cooling measures. Since then, private condominium prices have declined for two straight months, and analysts expect further corrections in the months ahead.


That said, I still believe the long-term prospects of property in Singapore remains sound. The Monetary Authority of Singapore has said that it wants property prices to rise reasonably and in tandem with wage increases. As such, over the much longer time frame, property prices should increase as wages rise in Singapore.


With property stocks trading some way off their peak, now may be a good time to look for bargains. Here’s a quick look at how the three blue-chip property stocks are valued now.


Price-to-book ratio


The price-to-book ratio is a comparison between the price of a stock and its book value per share. In theory, a stock that is trading at a discount to its book value can pose good value. If a company liquidates its assets and returns the cash to shareholders, investors stand to gain from the price-book value mismatch.


The three property stocks that are part of the Straits Times Index (SGX: ^STI)UOL Group Limited (SGX: U14), CapitaLand Limited (SGX: C31) and City Developments Limited (SGX: C09) – each trade below their book values. The table below shows the price-to-book ratios of the three companies right now.



Source: Author’s compilation and computation of data from Morningstar


As you can see, all three property stocks are trading well below their book values and also below their five-year average. On average, they are selling at a 21.8% discount to their respective averages, with City Developments currently trading at the biggest discount compared to its past.


UOL, however, has the lowest price-to-book ratio currently.


The Foolish bottom line


Clearly, the market does not seem to like Singapore property stocks right now. There is minimal visibility on how the property market in Singapore will move over the next few quarters, and the government has shown that it is not afraid to step in to cool the market if optimism goes out of hand.


However, over the longer time frame, properties in Singapore are most likely going to appreciate as population and wages grow. The long-term fundamentals are intact for these three companies that own, manage and develop properties in Singapore and regionally. With prices well below their historical average, now may be an opportune time to get in cheap.


$CityDev(C09.SI) $CapitaLand(C31.SI) $UOL(U14.SI)

Read more
1 like
1 comment
alagiejaiteh

Can there be a telephone contact before going in to the matter, as I have few questions


Recommended & Related Posts

2018’s Top 5 Worst Performing Blue-Chips
- Original Post from The Motley Fool Sg

Singapore’sStrait Times Index(SGX: ^STI)has had a rough 2018, falling 9.1% from the start of the year until the end of November. Some companies have performed even worse than the index. With that in mind,let’s look at the top five worst performing companies (data as of 30 November 2018)




  1. Thai Beverage Public Company Limited (SGX: Y92) or ThaiBev for short, is one of Southeast Asia’s largest beverage companies, with distilleries in Thailand, Scotland, Myanmar and China. ThaiBev has four core segments: spirits, beer, non-alcoholic beverage, and food. The first eleven months of 2018 have been rough for the beverage provider with its stock price declining 29.4% over that period. A possible reason for ThaiBev’s decline could be its high debt position which it took to purchase of a controlling stake in Vietnam’s Sabeco brewery. At its current stock price, the beverage provider sports a market capitalization of S$14.9 billion and a dividend yield of 2.7% at current prices.

  2. The fourth worst performer is UOL Group Limited (SGX: U14), a Singapore listed property company with S$20 billion of assets under management. The group’s activities include property development, hotels operations and property investment. UOL Group’s stock price has seen a 29.7% pull-back between January and November this year. The stock’s lacklustre performance could be due to the Singapore government’srecent property cooling measures. At current prices, UOL Group has a market capitalization of S$5.2 billion and a dividend yield of 2.8%.


  3. City Developments Limited (SGX: C09) is a real estate developer with a market capitalization of S$7.6 billion. The company’s business interests lie in developing both residential and commercial properties. In addition, City Developments owns 61% of Millennium & Copthorne Hotels Plc and other hotel properties, serviced apartments, and serviced offices. The first eleven months of the year have been rough on its stock price, posting negative returns of 31.3%. Like UOL Group, City Developments has been hit by the government’s cooling measures. At current prices, the real estate conglomerate sports a dividend yield of 2.4%.


  4. Hutchison Port Hldg Trust (SGX: NS8U) or HPH Trust is the world’s first publicly traded container port business trust with ports in Hong Kong and Mainland China. The trust has ended up second from the bottom in the STI’s performance ranking for the year so far where its stock price declined by 32.1%. HPH Trust runs the Hongkong International Terminals, COSCO-HIT Terminals, and Asia Container in Hong Kong as well as the Yantian International Container Terminals and Huizhou International Container Terminals in the Middle Kingdom. HPH Trust currently has a market capitalization of US$2.4 billion and a distribution yield of 9.5%.


  5. Golden Agri-Resources Ltd(SGX: E5H) or GAR rounds up the bottom five performers on the index over the January to November period. GAR is one of the largest palm oil plantation companies in the world and manages more than 500,000 hectares of palm oil plantations. From January to November, GAR has seen its stock price cut by more thana third dueto weak crude palm oil prices. GAR has a market capitalization of S$3.3 billion.


To sum up, the bottom five companies have underperformed the index over the first eleven months of 2018.. While the period is only 11 months, the company above demonstrate that picking the wrong stocks can deliver negative returns. That is why it’s essential that investors put in the time and effort to research stocks before taking the plunge.


$CityDev(C09.SI) $Golden Agri-Res(E5H.SI) $HPH Trust USD(NS8U.SI) $UOL(U14.SI) $ThaiBev(Y92.SI)

Read more
2018’s Top 5 Worst Performing Blue-Chips
- Original Post from The Motley Fool Sg

Singapore’sStrait Times Index(SGX: ^STI)has had a rough 2018, falling 9.1% from the start of the year until the end of November. Some companies have performed even worse than the index. With that in mind,let’s look at the top five worst performing companies (data as of 30 November 2018)




  1. Thai Beverage Public Company Limited (SGX: Y92) or ThaiBev for short, is one of Southeast Asia’s largest beverage companies, with distilleries in Thailand, Scotland, Myanmar and China. ThaiBev has four core segments: spirits, beer, non-alcoholic beverage, and food. The first eleven months of 2018 have been rough for the beverage provider with its stock price declining 29.4% over that period. A possible reason for ThaiBev’s decline could be its high debt position which it took to purchase of a controlling stake in Vietnam’s Sabeco brewery. At its current stock price, the beverage provider sports a market capitalization of S$14.9 billion and a dividend yield of 2.7% at current prices.

  2. The fourth worst performer is UOL Group Limited (SGX: U14), a Singapore listed property company with S$20 billion of assets under management. The group’s activities include property development, hotels operations and property investment. UOL Group’s stock price has seen a 29.7% pull-back between January and November this year. The stock’s lacklustre performance could be due to the Singapore government’srecent property cooling measures. At current prices, UOL Group has a market capitalization of S$5.2 billion and a dividend yield of 2.8%.


  3. City Developments Limited (SGX: C09) is a real estate developer with a market capitalization of S$7.6 billion. The company’s business interests lie in developing both residential and commercial properties. In addition, City Developments owns 61% of Millennium & Copthorne Hotels Plc and other hotel properties, serviced apartments, and serviced offices. The first eleven months of the year have been rough on its stock price, posting negative returns of 31.3%. Like UOL Group, City Developments has been hit by the government’s cooling measures. At current prices, the real estate conglomerate sports a dividend yield of 2.4%.


  4. Hutchison Port Hldg Trust (SGX: NS8U) or HPH Trust is the world’s first publicly traded container port business trust with ports in Hong Kong and Mainland China. The trust has ended up second from the bottom in the STI’s performance ranking for the year so far where its stock price declined by 32.1%. HPH Trust runs the Hongkong International Terminals, COSCO-HIT Terminals, and Asia Container in Hong Kong as well as the Yantian International Container Terminals and Huizhou International Container Terminals in the Middle Kingdom. HPH Trust currently has a market capitalization of US$2.4 billion and a distribution yield of 9.5%.


  5. Golden Agri-Resources Ltd(SGX: E5H) or GAR rounds up the bottom five performers on the index over the January to November period. GAR is one of the largest palm oil plantation companies in the world and manages more than 500,000 hectares of palm oil plantations. From January to November, GAR has seen its stock price cut by more thana third dueto weak crude palm oil prices. GAR has a market capitalization of S$3.3 billion.


To sum up, the bottom five companies have underperformed the index over the first eleven months of 2018.. While the period is only 11 months, the company above demonstrate that picking the wrong stocks can deliver negative returns. That is why it’s essential that investors put in the time and effort to research stocks before taking the plunge.


$CityDev(C09.SI) $Golden Agri-Res(E5H.SI) $HPH Trust USD(NS8U.SI) $UOL(U14.SI) $ThaiBev(Y92.SI)

Read more
How To Outrun A Bear
- Original Post from The Motley Fool Sg

It was not long after Diwali was over when Singapore started getting ready for the next major festive event – Christmas.


I sometimes wonder why we can’t celebrate Diwali just that little bit longer.


Diwali, or the Festival of Light, for me is a reminder of the victory of light over darkness. It’s about the triumph of knowledge over ignorance. It is also about appreciating and understanding what is going on around us.


What’s volatility?


It was around the time of Diwali when I was asked by the morning crew on MoneyFM why Genting Singapore (SGX: G13), City Developments (SGX: C09) and Venture Corp (SGX: V03) were the three worst performers in the Straits Times Index (SGX: ^STI) in October.


Point is, I don’t think anyone really knows.


But what I do know is that October certainly lived up to its reputation as a volatile month for shares. Actually, stock markets could have gone either way – they could have ended the month deep in the red, which they did, or firmly in the green, which they certainly didn’t.


That is what happens with volatility. As it turned out, it was a very Red October.


Thing with volatility is that we deem it to be bad if shares fall. But we think it’s fabulous if the stock market rises. We can’t have it both ways….


….. we can’t vilify volatility if stock markets fall but praise it if shares rise.


Take your pick


In fact, during Red October, any one of the 30 companies that comprise the benchmark index could have ended up at bottom of the heap. It just so happened that the market decided to pick on those three.


That reminds me of a story I was told when I was a young boy. It was about two lads who were chased up a tree by a grizzly bear….


…. After a couple of hours, one boy turned to the other and suggested that they should make a run for it. The other boy pointed out that they could never outrun a bear….


…. the first boy then said he didn’t need to outrun the bear, he just had to outrun his friend. So, much for friends, eh!


The good and bad


Point is, the three biggest fallers in the Straits Times Index were just unfortunate to be caught in the crosshairs of seller. Volatility doesn’t discriminate. Good shares can be dragged down just as easily as bad ones.


But informed investors know the difference between good companies and bad ones. And when markets behave erratically – as they did in October – it can be a good time to buy.


Good companies, we need to remember, don’t turn into bad companies just because their shares have been sold off in the market….


…. Warren Buffett said: “We should only buy something if we would be happy to hold it, if the market shuts down for 10 years.”


Guiding light


That has been my guiding light. It should be yours too.


We should only buy a share if we are confident about its long-term prospects. We should only commit our money, if we can estimate how that share could reward us over the long term.


I am fortunate to have seen the benefits of income investing a long time ago. As such the stock market has been good place for me to park my money. In the short term, I get to fill my boots with dividends….


…. and in the long term, the shares of those companies that I own should grow and appreciate in price.


Something stupid


For me, investing means never being fixated about whether share prices will be higher or lower in the short term. It’s about buying wonderful companies at fair prices, then sitting back to enjoy the dividends, as they roll in.


And if the dividends grow over time, then so too could the share price. That is what I call the beauty of long-term dividend investing.


So, spend time looking for wonderful companies, then wait to buy them when prices look fair. You can always count on the market to do something stupid….


…. You just don’t know when it will happen. But Red October was one of those times. It was a great buying opportunity, and it will happen again.


A version of this article first appeared in Take Stock Singapore.


$STI(^STI.IN) $CityDev(C09.SI) $Genting Sing(G13.SI) $Venture(V03.SI)

Read more
2 Things That Investors Should Know CapitaLand Commercial Trust Now
- Original Post from The Motley Fool Sg

CapitaLand Commercial Trust (SGX: C61U) is one of the largest commercial real estate investment trusts (REITs) in Singapore by market capitalisation that is managed by CapitaLand Limited (SGX: C31).The REIT has ownership over nine commercial properties in Singapore and one property in Germany.


There are two things to know about the REIT right now: its latest financial performance and valuation.


Financial performance


Here is a table showing important items from CapitaLand Commercial Trust’s financial performance for the third quarter of financial year ending 31 December 2018.



Source: CapitaLand Commercial Trust Results Presentation


The year-on-year improvements in gross revenue and net property income (NPI) were due to strategic acquisitions of Asia Square Tower 2 and Gallileo (the property in Germany), but partially offset by the divestments of Wilkie Edge and Twenty Anson. As at 30 September 2018, the commercial REIT had a gearing ratio of 35.3% while its occupancy rate stood at 99.2%.


In all, CapitaLand Commercial Trust had a good quarter with stronger metrics across the board.


Valuation


There are two useful valuation metrics for assessing REITs. They are the price-to-book (PB) ratio, and the distribution yield.


The table below shows CapitaLand Commercial Trust’s PB ratio and distribution yield. It also shows the respective averages of the two valuation metrics for the 41 REITs that are in Singapore’s stock market.



Source: SGX StockFacts


We can see that CapitaLand Commercial Trust’s valuation is higher than the market average due to its low distribution yield and its high PB ratio.


$CapitaLand(C31.SI) $CapitaMall Trust(C38U.SI)

Read more
UOL Group Limited Is Trading Close To Its 52-Week Low Share Price: Is It Cheap Now?
- Original Post from The Motley Fool Sg

UOL Group Limited (SGX: U14) is a property company that is involved in property development and management, property investments, and hotel businesses.


At the current price of S$6.26, UOL’s shares are just slightly higher than the 52-week low price of S$6.00. This raises a question: Is UOL cheap now? This question is important because if the firm’s shares are cheap, it might be a good opportunity for investors.


Unfortunately, there is no easy answer. However, we can still get some insight by comparing UOL’s current valuations with the market’s valuation. The three valuation metrics I will focus on are the price-to-book (PB) ratio, price-to-earnings (PE) ratio, and dividend yield.


I will be using the SPDR STI ETF (SGX: ES3) as a proxy for the market; the SPDR STI ETF is an exchange-traded fund that tracks the fundamentals of Singapore’s stock market benchmark, the Straits Times Index (SGX: ^STI).


UOL currently has a PB ratio of 0.6, which is lower than the SPDR STI ETF’s PB ratio of 1.1. Yet, its PE ratio is higher than that of the SPDR STI ETF’s (13.5 vs 11.5). Also, the property company’s dividend yield of 2.8% is lower than the market’s yield of 3.5%. The lower a stock’s yield is, the higher is its valuation.


In sum, we can argue that UOL is priced fairly to the market average due to its low PB ratio, offset by its high PE ratio and low dividend yield.


$STI(^STI.IN) $STI ETF(ES3.SI) $UOL(U14.SI)

Read more

There are more for you ...

View more and participate in our discussion now. It's FREE.

Creating an account means you’re okay with InvestingNote's Terms and Conditions