Warren Buffett latest decision to swap P&G shares for Duracell may signify his bearish sentiments towards US stock market since P&G is a component of Dow Jones Industrial Average. Using Buffett recommended market capitalisation/GNP ratio as market indicator, US stock market is overvalued, Beware!
Tiger Airways will most probably be announcing losses for three consecutive years judging from the keen competition among budget airlines and another rights issue. However, as SGX rules state that :”The Exchange will place an issuer on the watch-list, if it records:—
(1) pre-tax losses for the three (3) most recently completed consecutive financial years (based on the latest announced full year consolidated accounts, excluding exceptional or non-recurrent income and extraordinary items); and
(2) an average daily market capitalisation of less than $40 million over the last 120 market days on which trading was not suspended or halted.”
Tiger airways may not be put in the watchlist because its market capitalisation is higher. However, that does not mean that it shouldn’t be on investors’ watchlist as turnaround will prove to be difficult. Buffett warned investors who are thinking of investing in airlines. One joke is :”How to become a millionaire. Start as a billionaire and then buy an airline.”
From CIMB research summary,
Disclosure:I am vested, so view will be biased.
“MIT is a small-cap semicon turnaround story. Having returned to
profitability in 1H14, it is set to continue the recovery momentum in
FY15, thanks to new order wins. We also expect dividend payment to
resume in FY14.
MIT’s earnings recovery is being
driven by the resumption of orders
from customers. Applying its
historical average forward P/BV of
0.74x to 1H14 BVPS of S$0.13, we
estimate that its share price could
re-rate to S$0.096 in this recovery
cycle. The likely catalyst is new order
wins, especially in the solar field
which will help reduce its traditional
dependence on the semicon industry.
Back to the black
MIT turned in a loss of S$6.5m in
FY13 as its customers in the
semiconductor industry held back on
their capex. However, a recovery is in
place, with the company returning to
a profit of S$0.8m in 1HFY14, driven
by a return of demand from its
semiconductor customers. The
recovery momentum is expected to
continue in 2HFY14 given the new
order wins announced.
Orders are back
MIT also scored big at the recently
concluded Semi-con Taiwan 2014
Show where it launched its new
generation of vision inspection
equipment under its Smart Flex series.
An initial order for 11 new Smart Flex
machines was received. Together with
various other orders, the company
secured S$8.2m new orders, bringing
its order book to S$34.2m from
S$18m as at 21 Feb 2014. The
outstanding orders will be recognised
in 2H14. The recovery in demand
from its semicon customer is expected
to last into FY15. A possible bonus is
the successful completion of a
significant order for solar-related
equipment from an existing customer.
This could occur over the next 12
Expect a good FY14 and
MIT’s guiding principle is to pay
dividends only if the company is
profitable. In the last earnings
recovery cycle, MIT paid 0.25 Scts in
FY10 and FY11. Dividends were
skipped in FY12 (small profit) and
FY13 (loss making). We believe
shareholders will see at least 0.25 Scts
DPS as profits recover in FY14. If the
recovery is stronger, the company
may pay a special dividend. Assuming
a DPS range of 0.25 Scts to 0.50 Scts,
the prospective dividend yield range is
3.1% to 6.3%.
Insiders just bought some more shares.
As reported by BBC,”Heirs to the Rockefeller family, which made its vast fortune from oil, are to sell investments in fossil fuels and reinvest in clean energy, reports say.
The Rockefeller Brothers Fund is joining a coalition of philanthropists pledging to rid themselves of more than $50bn (£31bn) in fossil fuel assets.
The announcement was made on Monday, a day before the UN climate change summit opens on Tuesday.
Some 650 individuals and 180 institutions have joined the coalition.
It is part of a growing global initiative called Global Divest-Invest, which began on university campuses several years ago, the New York Times reports.
Pledges from pension funds, religious groups and big universities have reportedly doubled since the start of 2014.
Rockefeller Brothers Fund director Stephen Heintz said the move to divest from fossil fuels would be in line with oil tycoon John D Rockefeller’s wishes,
“We are quite convinced that if he were alive today, as an astute businessman looking out to the future, he would be moving out of fossil fuels and investing in clean, renewable energy,” Mr Heintz said in a statement.
“everyone noted the irony” that a foundation built on oil wealth would now be leading the charge out of fossil fuel.
Actor Mark Ruffalo, who also signed the pledge, told the conference: “These are not silly people, these are people who know how to deal with money.”
They recognised that clean energy was “the future””
Alibaba who recently invested in Singpost is going IPO soon in September. Lim Ho Kee, chairman of Singpost also sold most of his Singpost shares on 8-9 September. Lim Tan Securities said that Lim Ho Kee is a good barometer of Singpost shares peaks.
Osim CFO sold about 40% of his shares recently. Osim shares has been doing well and its earnings seem great although slowing down in growth. With China probably due for a slowdown in growth, its massage chairs sale may face tougher times. Luxury tea sales is a growth industry but it takes time to grow.
Thanks to valuebuddies forum, one forummer speculated that the recent announcement by Straco Corporation that it has set up a Singapore incoporated subsidiary called “Bay Attractions” and a February 2014 CIMB initiation report on Straco mentioned that “Straco is currently looking at the potential acquisition of a distressed tourism asset in Asia in 1Q14. If the acquisition successfully goes through, this will be the first tourist attraction that Straco will operate outside of China. The asset has a project size exceeding S$100m, and Straco is looking to acquire a 90% stake, with the remaining 10% stake going to a strategic shareholder. While
management has guided that the project will not be as profitable as the Shanghai Ocean Aquarium, the project is an area in which it has some expertise and it is confident that it can run well. The positive is that this project will diversify the group’s revenues outside of China and the aquarium segment.” could be pointing to the fact that Singapore Flyer is the acquisition target of Straco.