$Duty Free Intl(5SO.SI) I have released an analysis of DFI. Very solid business and company with strong growth potential. Readers of my previous analysis on $ComfortDelGro(C52.SI) (ComfortDelGro : Is our transport giant breaking down?) would be familiar with our in-depth analysis. Please give your feedback! Thanks.
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I previously held this counter and released all I had at a price of $2.65. After a barrage of good news, I decided to enter the foray once again.
Throughout this entire coverage, I am assuming a profit margin of only 9%, which is a tad lower than their Q12017 profit margin of about 9.8%. Therefore, all my calculations here will be UNDERSTATED if they were to improve their profit margins, which has been the case over the last few years.
What I am also assuming is that there are no further sales order received from customers, which is almost zero probability.
Ready to read on? LETS GO!
"The Company is pleased to announce that it has received as at 31 May 2017, sales orders worth S$182 million for delivery in FY2017. This represents an increase of S$30 million in sales orders received over the previous sales order received announcement made on 18 April 2017."
With a profit margin of 9%, $182m of revenue equates to $16.38m of profit, which averages out to $5.46m per quarter. Adding q1 earnings, total year earnings will be 20.5 million, which equates to an EPS of $0.32.
With such an EPS, the share price of $2.72 represents a PE ratio of ONLY 8.6x. Everyone knows that this is an INSANELY low PE ratio, and that the market has not fully priced in the growth that is to come.
Even if it goes to an undemanding PE ratio of 12x, the price would have already grown to $3.8. I personally do not think that the management would allow the stock to escalate to that price, and they would issue bonus shares to improve the liquidity of the shares.
What else do we want? It does not stop here! The company states - "Thirdly, with clear visibility of growth into the next few years, we intend to adopt a dividend policy to pay annual dividends, including interim dividends, of not less than 25% of profit after tax excluding non-recurring, one-off and exceptional items."
With a minimal profit estimation of AT LEAST $20million, 25% profit means $5m paid out, which equates to a dividend of at least 2.8% for an insane growth company.
To top it all of, institutional investors are buying in to AEM as well. "is pleased to announce that several long-only institutional funds have bought AEM shares and have become new shareholders. The institutional funds took up 2,737,800 shares at $2.70 a share from Orion Phoenix on 5 June 2017."
With this massive inflow of funds, I believe that AEM will attract many more institutional investors. I do not see Orion Phoenix reducing the percentage of their shares any further. With Institutional Investors buying at a price of $2.70, there is a major support there and I only see the price going up.
This is only the beginning of AEM!
One year since I started my investing journey again ;-p
- Fun Fund (-25%, fortunately just a small sum)
- Itchy Hands Fund (-4.5%, need cure for this urgently)
- Lifelong Investing Fund (+15%, mainly SRS at the moment)
- Reserves (making 1-3% yearly interest in banks, SSB)
Realized Fun-fund is really fun but no fund... I use SCB to trade penny stocks, in and out too often without any plan. Buy at peak, sell at bottom. People buy before news and sell after, I do the opposite. $Rowsley^(A50.SI) $Delong(BQO.SI) $Falcon Energy(5FL.SI) just few from top of my list.
Itchy hands got me into similar but bigger troubles (as these are bigger sum trades). Managed to exit with small gain on $M1(B2F.SI) $ComfortDelGro(C52.SI) but now got trapped by $Best World(CGN.SI) $Hi-P(H17.SI) Not feeling good as I think these stocks will take many many years to get back to this level (or never) if the long anticipated crash finally arrives.
Lifelong Investing Fund mainly from the SRS bucket. I feel I am doing fine here. Other than taking profit far too early $DBS(D05.SI) $OCBC Bank(O39.SI) $UOB(U11.SI) $Venture(V03.SI) $Keppel Corp(BN4.SI) to name a few. All exited with 25% or higher gain. Most would have been 50-75% gain by now. Venture went more than doubled. But well, 15% gain overall is not too bad for me for now. For this bucket, I feel totally at ease even if the mega adjustment came. As it is sitting at average 5.67% dividend yearly. Mostly in stocks which I feel will still be here at least for another 10-15 years. Mostly REITs but heavy on $SingTel(Z74.SI) and lately into $UMS(558.SI) too.
I am still heavy on reserves as I don't want to repeat same mistake back in 2007/8/9. All fund trapped at peak and no more fund to have fun picking cherries. I shall be happy with the 1-3% return while continue to wait for the price like DBS $15, OCBC $8, UOB $18, Venture $9, Keppel Corp $5 and so on. Lower better. Buy and keep for 20 years.
The wait continues, meantime it is learn and learn whenever time allows.