Wednesday, May 13, 2015

[SGX Portfolio] Dipping Into SembCorp Ind

Perhaps it is against my better judgement, but I have taken the smallest nibble possible into SembCorp Ind. (3% weight in my portfolio)

SembCorp Ind isn't a bad company. Nice big company with 50% government ownership. Plus, I know they take out the trash in my estate. Am I going to fire them? I don't even know how to.

Why against my better judgement? Well, I think Oil has yet to bottom still. I know right, what a douche. But that's just what I think. I ain't forcing my thoughts down your thought and transmitting a short-sell order to your broker for USO on your behalf. If Oil goes lower, we should expect related industries to go lower as well.

Plus, if Gartman goes long Oil, damn, you better be careful.

I also know that some people at SembCorp are bored to death, staring at the ceiling waiting for work to land on them. That means more bad news in store for SembCorp, right?

SembCorp Ind can definitely go lower from here, who's to say that there is anything to give it a fixed price floor? But I like to buy when people are selling, and I like to sell when people are buying. At this price that I entered today, I feel quite comfortable with it. I'm trying to diversify my strategy that instead of only going for deep discounts basement bargains, I also buy into blue-chips on attractive dips (at least to me), like the one we are seeing now. What would I do if prices go lower? I guess I would continue buying on dips.


  1. its super oversold
    i was waiting for a rebound

    1. Hey Jimmy,

      Yes, it does seem like a decent dip to test water, although I'm not too sure about the longer term trend. I rather see a flushing out of weak hands with a break of the Dec low supports, then I can really consider taking a full bite into this counter instead of just taking a nibble.

  2. have you considered this question: if the price now is indeed value for money, why the price keeps dropping? have all institutional investors and smart retail investors(including the contrarian types) wrong?

    1. Hi Richard,

      I don't believe in the EMH, so it is very possible for the entire market to overestimate or underestimate a stock's value. Companies like Netflix, trading at PE ratios of 153 is a good example of how a stock has all its institutional investors and smart retail investors suffering extreme medical delusions of grandeur.

      Cheap can definitely get cheaper. I wish I had the ability to pick tops and bottoms, but I don't. Cheap is good enough for me. Cheaper is even better.

  3. Hi GMGH

    By this theory, will you consider SIA Eng as well?

    1. Hi B,

      I had just recently read Kyith's post on SIA Engineering which was a good refresher of what's happening with them. I don't think I would, their PE of 25 is really a bit too.... heart stopping for me. I do think that it is possible that the market will see SIA Eng's valuation as too rich and valuations would correct lower. Dividends has been cut. Long term growth seems capped to the upside. There seems to be much more risk to be loss than returns to be gained from where I look.

      At least SCI's ttm PE is 10, which is much more palatable as a starting valuation.


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