Hi, Joseph,
Your post on SIIC is good food for thought especially in the current time and also for those looking for "low risk high potential gain" stocks.
Would you like to share with us your preference for SIIC instead of China Everbright or Moya or other water treatment stocks ? These stocks have all been lanquishing at their bottom ends for quite some time. SIIC and China Everbright are more active and paid dividends and have very low PEs of under 5X. Moya is profitable and has been great for those who relish in doing swing trade over a narrow range as it is more volatile compared to the other two.
Hi observer2, my takes on SIIC are strictly based on a few factors:
1. revenue trend
2. profit trend
3. dividend/dividend yield
4. price earning ratio (p/e)
5. other considerations - nta, safety,etc.
To date SIIC has been consistent, showing steady growth in revenue and profits for 5 continuous year.
The dividend has been consistent too varying from 1.0 to 2.0 cents giving a yield of more than 5.0%. I expect current full year dividend to be 1.5% giving a yield of 7.8% based on current price of 19.3 cents.
Based on half year earnings, the price earning ratio should be around 3.5X, which is extremely cheap for a growth stock.
The low price today is mainly due to lack of interest in this stock. Its outside the radar of most investors. And this is probably why is so "cheap".
I am a patient and long term holder and so long long as the story line hold I am comfortable with the current lack of interest in the stock. Many of my past picks have this characteristic but eventually it paid off. One example is Excelpoint which I held for a few years. Finally it paid off as a milti bagger. Another is Kimly Limited which I have held for 2 plus years. Lately it had run up and is up almost 100%. I am still holding as i think current price is still too cheap.
Above is just my sharing. Can be right or can be wrong. Conviction and patience are important.
Thank you for your assessment, Joseph. It is unfortunate that we are not in a hot bull market and certain stocks are just out of favour with Investors. China Everbright also announced a good set of half-time results with interim dividend of 1.01 cts(S$). My guess is that SIIC and China Everbright huge borrowings (over RMB 13 Billion & HK$ 13 Billion respectively) might have been a dampener to their stock performance in the water treatment sector.
Hi observer2, I am personally quite comfortable with these under radar/neglected stocks. My past experiences with them had been quite rewarding but one needs to have patience and convictions.
I think the huge borrowing by SIIC is on project basis, meaning , they get a project, they borrow against the project. I think this type of borrowing is very targetted and safer. Anyway, I will just wait and in the meantime collect my dividends which is far far better than what I get from a bank. Take care ...
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