Do you think food and healthcare stocks are overvalued at over 20 and over 30 times earnings?
$Kimly(1D0) $Raffles Medical(BSL)

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48 comments
Amethyst

Yes way too overvalued especially for SG, with a small market, there isn't much room for growth and the market is too saturated. Expansion overseas might help plug the growth concerns but moving into another market poses plenty of risks as well, so why pay the premium ?

soonhongtan

Reply to @Amethyst : That is why the health care cost keeps going up...to keep up with the increase in rental and workers' pay.

lionking

as long as people buy up, it will move up

gamhoatin

Reply to @lionking : market will run out of 'foolish' investor to push up the price

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seejjl

i wouldn't invest in Kimly for 1 reason and that is because I don't believe in F&B long term sustainability. there is high turnover in the F&B business and people's taste changes overtime and subjective. I think over 20 times earnings is high.

Whereas for healthcare, RMG's peers are also valued above 30 times earnings as well. At this rate, I think it will really take patience for RMG price to go up slowly.

soonhongtan

Reply to @MasterLeong : Tech stocks more risky...company must keep innovating failing which can result in the stock crash. Or worse, bankruptcy. No joke. Health care company if manage the cost probably has greater chance of survival.

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nareshg

For high PE quoted companies, it is better to apply PEG ratio

SSJ4

camping at 3 cents to align with founders' interests

goh6570

kimly price is dipping leh.... -5.7% liao

MasterLeong

Reply to @goh6570 : dont forget that the founder and family members their shares only cost 3 cents each....

HuatBrother

Reply to @onlybuyneversell : Careful! Could be just another one day hero in the making

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div1g4in

Apparently its battle of shortist vs longist in kimly now... lol...

PoorSalariedWorker

I hope no one is still holding kimly....time to short?

Sharesnewbie

I feel raffles is still alright as there is room for expansion due to ageing population. But food wise im not too sure

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Quick Market Talk

$DBS(D05.SI) had a good run as this was my top pick for 2016, my average cost was around 15 bucks as I felt it was cheap at 0.8 times book and I have already more than doubled my money.

DBS now trades at over 1.6 times book, with an expected ROE% coming in of 12-13% for 2018.. I am 100% sure this is not cheap, DBS could be fairly price with more upside to come or DBS could be overvalued with a big correction to come.

the 10 year or longer chart looks very scary to me, I do not want to be greedy so I rather be safe and happy to lock in my 5 figure profits.

I will be diverting the cash to other new exciting positions... currently I am looking at $Mapletree NAC Tr(RW0U.SI) and $Raffles Medical(BSL.SI) but need more research and better entry levels.

$HRnetGroup(CHZ.SI) has been running very hot since my initial coverage at 72 cents, up over 10% already as its now close to 80 cents level. I feel that now is the last last chance to board, anything above 80 cents would mean lesser margin of safety. I am vested 100,000 shares and looking to sell half at TP of 90 cents, keeping balance 50,000 for long term dividends and growth.

$ComfortDelGro(C52.SI) will XD on thurs, I am looking to reduce of divest at 2.40 levels or maybe even earlier.

Cheers ^_^

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Old Man's Newbie Guide to the 3 Basic Stock Types - Dividend, Growth and Cyclical ~!!! (REPOST)

I have a simple way of grouping the stocks in my portfolio into 3 basic categories, this can be very useful and important as we slowly see why.

1) Dividend Stocks

As the name shows, basically you hold these stocks to collect dividends... such as REITS or Telcos.
Typically you would get around 5%-8% yield, but if you find picks that pays 10%+ like HPH/APPT.. please do dig further as usually above market yields comes with some flaws in their fundamentals or additional risks.

In general be happy to make 6-10% long term returns on stocks in these category, I consider them as lower risk for lower returns.

Example if you investing in $CapitaMall Trust(C38U) and $CapitaCom Trust(C61U) , in the long run a realistic expectation would be
6% dpu and 3% growth in nav/dpu for a total returns of 9%.
On the down side typically even in a recession you do not expect to lose a lot of money, as the price is supported by the yield... during a bear market CMT may fall from 6% yield to 8% and maybe you lose 20%... but you are likely not gonna lose 50% or all your money on a solid blue chip dividend stock.

2) Growth Stocks

These are stocks that try to grow their earnings higher and higher each year, by opening more store, selling more products or expanding into new countries. Example $ThaiBev(Y92) $Sheng Siong(OV8) $BreadTalk Grp(CTN.SI) $Raffles Medical(BSL)

Here you are looking to make the bulk of your returns from capital gains, not dividends... you are hoping that the company can grow earnings by 10-20% each year. And as earnings improves the stock price should go up accordingly...

If the company makes 10 cents per share and is priced at 20 times earnings, the market reflects a 2.00 stock price.
If earnings grows 20% to 12 cents and continues at PE 20, the stock should go up by 20% too to 2.40.
20% returns a year is very good returns for sure!

However although growth stocks can produce higher returns than dividend stocks but they do also carry much higher risks. If a growth stock fails to show earnings growth but earnings instead go flat or at worse... turns negative... do expect to see sharp sell downs, even a 30-50%+ drop is possible if a growth stock stops growing. example $IFAST(AIY) fell from 1.60 to 60 cents...

Typically growth stocks can trade from 20-30 times earnings, however sometimes investors gets too bullish or too positive on the future prospect and bid the stock up to 50 or even 100 times earnings... by paying too high a price, you can lose a lot of money even if the fundamentals are good.

3) Cyclical Stocks

A lot of newbie investors then to be confused and treat cyclical stocks like keppel corp as growth stocks, when they see KC showing higher and higher earnings as oil prices set new records at $100 they get too blinded, they only open their eyes when oil crashes to $30 and these cyclical stocks starts to report little to no earnings...

Cyclical stocks are in industries that move in big tandem to the ups and downs of business cycles, from boom to bust... such as offshore marine, property development, commodities and manufacturing. When the times are good, contracts and orders keep coming in and these companies build new yards, factories, farms to meet the demand.... but when times are bad and nobody wants their products, their yards/factories/farms are temporary shut down...

Cyclical stocks are not meant to be bought and held for 10 years, you will not make any real money buying keppel corp at $12 only to see it fall to $6 and then back to $12 in a long cycle... cyclical stocks can be profitable if u buy them on the down cycle cheap when things look bad and sell them on the up cycle when the outlook is rosy... this is a tricky part and it takes a lot of experience to get it right.

Cyclical stocks can be extremely dangerous when you blindly buy them at the peak of the cycle, you may lose 50% to even 100%!!! (think ezra,swiber,noble) in a super down cycle.

Portfolio

Lastly to add, my current portfolio strategy is to hold around 2/3 dividend stocks (currently 4 reits and 2 telcos) for stable returns and 1/3 growth stocks (3 banks&CDG) for taking more risk and boosting the overall returns. While only occasionally short term trade into cyclical like KC and SCI.
So far I have been able to make around 11%XIRR over the last 10 years... a far cry from my idol Warren Buffet's 20%, but still 11% is a good enough return for me.

So today do look through the list of yours stocks and put them into the 3 categories, if you are not sure... feel free to post here and ask ^_^

Cheers

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no 1 dollar no buy ^_^

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Expiry:
Target Price
$1.0
(-9.09%)
NOW:

Old Man's Newbie Guide to the 3 Basic Stock Types - Dividend, Growth and Cyclical ~!!!

I have a simple way of grouping the stocks in my portfolio into 3 basic categories, this can be very useful and important as we slowly see why.

1) Dividend Stocks

As the name shows, basically you hold these stocks to collect dividends... such as REITS or Telcos.
Typically you would get around 5%-8% yield, but if you find picks that pays 10%+ like HPH/APPT.. please do dig further as usually above market yields comes with some flaws in their fundamentals or additional risks.

In general be happy to make 6-10% long term returns on stocks in these category, I consider them as lower risk for lower returns.

Example if you investing in $CapitaMall Trust(C38U) and $CapitaCom Trust(C61U) , in the long run a realistic expectation would be
6% dpu and 3% growth in nav/dpu for a total returns of 9%.
On the down side typically even in a recession you do not expect to lose a lot of money, as the price is supported by the yield... during a bear market CMT may fall from 6% yield to 8% and maybe you lose 20%... but you are likely not gonna lose 50% or all your money on a solid blue chip dividend stock.

2) Growth Stocks

These are stocks that try to grow their earnings higher and higher each year, by opening more store, selling more products or expanding into new countries. Example $ThaiBev(Y92) $Sheng Siong(OV8) $BreadTalk Grp(CTN.SI) $Raffles Medical(BSL)

Here you are looking to make the bulk of your returns from capital gains, not dividends... you are hoping that the company can grow earnings by 10-20% each year. And as earnings improves the stock price should go up accordingly...

If the company makes 10 cents per share and is priced at 20 times earnings, the market reflects a 2.00 stock price.
If earnings grows 20% to 12 cents and continues at PE 20, the stock should go up by 20% too to 2.40.
20% returns a year is very good returns for sure!

However although growth stocks can produce higher returns than dividend stocks but they do also carry much higher risks. If a growth stock fails to show earnings growth but earnings instead go flat or at worse... turns negative... do expect to see sharp sell downs, even a 30-50%+ drop is possible if a growth stock stops growing. example $IFAST(AIY) fell from 1.60 to 60 cents...

Typically growth stocks can trade from 20-30 times earnings, however sometimes investors gets too bullish or too positive on the future prospect and bid the stock up to 50 or even 100 times earnings... by paying too high a price, you can lose a lot of money even if the fundamentals are good.

3) Cyclical Stocks

A lot of newbie investors then to be confused and treat cyclical stocks like keppel corp as growth stocks, when they see KC showing higher and higher earnings as oil prices set new records at $100 they get too blinded, they only open their eyes when oil crashes to $30 and these cyclical stocks starts to report little to no earnings...

Cyclical stocks are in industries that move in big tandem to the ups and downs of business cycles, from boom to bust... such as offshore marine, property development, commodities and manufacturing. When the times are good, contracts and orders keep coming in and these companies build new yards, factories, farms to meet the demand.... but when times are bad and nobody wants their products, their yards/factories/farms are temporary shut down...

Cyclical stocks are not meant to be bought and held for 10 years, you will not make any real money buying keppel corp at $12 only to see it fall to $6 and then back to $12 in a long cycle... cyclical stocks can be profitable if u buy them on the down cycle cheap when things look bad and sell them on the up cycle when the outlook is rosy... this is a tricky part and it takes a lot of experience to get it right.

Cyclical stocks can be extremely dangerous when you blindly buy them at the peak of the cycle, you may lose 50% to even 100%!!! (think ezra,swiber,noble) in a super down cycle.

Portfolio

Lastly to add, my current portfolio strategy is to hold around 2/3 dividend stocks (currently 4 reits and 2 telcos) for stable returns and 1/3 growth stocks (3 banks&CDG) for taking more risk and boosting the overall returns. While only occasionally short term trade into cyclical like KC and SCI.
So far I have been able to make around 11%XIRR over the last 10 years... a far cry from my idol Warren Buffet's 20%, but still 11% is a good enough return for me.

So today do look through the list of yours stocks and put them into the 3 categories, if you are not sure... feel free to post here and ask ^_^

Cheers

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I made many warnings on kimly ipo $Kimly(1D0)
for those who really die die want to own this shares please look again at the attached picture to see how cheaply the earlier investors bought in at and are now sitting on a huge huge profit

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