Singapore Post

Coca cola is an evil stock because coke is just bad for the body

(29-07-2011, 12:56 AM)newborn1000 Wrote: Sold everything around $1.20 quite a while back.......

This type cannot grow, not like coca cola........

but was extremely undervalued during 2009........tat time with 11% dividend if i remembered correctly.....

That was during Oct-Nov/08 when everything else was also cheap. The yield was 9%++ @ $0.6x. I don't remember if it dropped to $0.5x for your 11% yield.

Singpost, to me is also not a growth stock. I was collecting it more as an Asset Play as they have a few standalone Post Offices that may have the potential to be developed into something like their SPC (Singapore Post Centre). In the interim, the dividend yield kept me happy. But, after waiting so many years, I got impatient and divested most of it. Now that it'd dropped a bit, I may get interested again if the yield gets a bit more higher...

(29-07-2011, 06:20 AM)Drizzt Wrote: Coca cola is an evil stock because coke is just bad for the body

This is lame

Eat and drink everything in moderation.....

there are lots more worst like weapons companies, vice, smokes etc

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(29-07-2011, 09:25 AM)KopiKat Wrote:

(29-07-2011, 12:56 AM)newborn1000 Wrote: Sold everything around $1.20 quite a while back.......

This type cannot grow, not like coca cola........

but was extremely undervalued during 2009........tat time with 11% dividend if i remembered correctly.....

That was during Oct-Nov/08 when everything else was also cheap. The yield was 9%++ @ $0.6x. I don't remember if it dropped to $0.5x for your 11% yield.

Singpost, to me is also not a growth stock. I was collecting it more as an Asset Play as they have a few standalone Post Offices that may have the potential to be developed into something like their SPC (Singapore Post Centre). In the interim, the dividend yield kept me happy. But, after waiting so many years, I got impatient and divested most of it. Now that it'd dropped a bit, I may get interested again if the yield gets a bit more higher...

yah 9%, i got it mixed up with another stock

Asset play is quite difficult.....

Have fun investing!!!

(29-07-2011, 10:11 AM)newborn1000 Wrote:

(29-07-2011, 06:20 AM)Drizzt Wrote: Coca cola is an evil stock because coke is just bad for the body

This is lame

Eat and drink everything in moderation.....

there are lots more worst like weapons companies, vice, smokes etc

---

(29-07-2011, 09:25 AM)KopiKat Wrote:

(29-07-2011, 12:56 AM)newborn1000 Wrote: Sold everything around $1.20 quite a while back.......

This type cannot grow, not like coca cola........

but was extremely undervalued during 2009........tat time with 11% dividend if i remembered correctly.....

That was during Oct-Nov/08 when everything else was also cheap. The yield was 9%++ @ $0.6x. I don't remember if it dropped to $0.5x for your 11% yield.

Singpost, to me is also not a growth stock. I was collecting it more as an Asset Play as they have a few standalone Post Offices that may have the potential to be developed into something like their SPC (Singapore Post Centre). In the interim, the dividend yield kept me happy. But, after waiting so many years, I got impatient and divested most of it. Now that it'd dropped a bit, I may get interested again if the yield gets a bit more higher...

yah 9%, i got it mixed up with another stock

Asset play is quite difficult.....

Have fun investing!!!

its not haha. alot of strong moat stocks are really bad for society. pepsi macdonalds. in the search for returns we forgo our morals

Let's take a poll. How do you feel about the current price of $1.1?
(please choose one)

Very attractive
Not bad
Average
Not good
Very expensive

My choice: not bad

Not good........

Not bad (for me since I'm averaging up from below $1)

Average (for anyone else taking a fresh position)

[Vested]

I know this won't apply a 100% to SingPost but for what it's worth and a look at the decline of the postal industry in the US and the drivers of its decline.

Key factors for decline:
- Declining mail vol.
- Strong Unions leading to exceptionally high labour costs.

Note: In my book, SingPost is not quite the same animal.

Postal Service Is Nearing Default as Losses Mount (source)
By STEVEN GREENHOUSE
Published: September 4, 2011

The United States Postal Service has long lived on the financial edge, but it has never been as close to the precipice as it is today: the agency is so low on cash that it will not be able to make a $5.5 billion payment due this month and may have to shut down entirely this winter unless Congress takes emergency action to stabilize its finances.

“Our situation is extremely serious,” the postmaster general, Patrick R. Donahoe, said in an interview. “If Congress doesn’t act, we will default.”

In recent weeks, Mr. Donahoe has been pushing a series of painful cost-cutting measures to erase the agency’s deficit, which will reach $9.2 billion this fiscal year. They include eliminating Saturday mail delivery, closing up to 3,700 postal locations and laying off 120,000 workers — nearly one-fifth of the agency’s work force — despite a no-layoffs clause in the unions’ contracts.

The post office’s problems stem from one hard reality: it is being squeezed on both revenue and costs.

As any computer user knows, the Internet revolution has led to people and businesses sending far less conventional mail.

At the same time, decades of contractual promises made to unionized workers, including no-layoff clauses, are increasing the post office’s costs. Labor represents 80 percent of the agency’s expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx, its two biggest private competitors. Postal workers also receive more generous health benefits than most other federal employees.

The Senate Homeland Security and Governmental Affairs Committee will hold a hearing on the agency’s predicament on Tuesday. So far, feuding Democrats and Republicans in Congress, still smarting from the brawl over the federal debt ceiling, have failed to agree on any solutions. It doesn’t help that many of the options for saving the postal service are politically unpalatable.

“The situation is dire,” said Thomas R. Carper, the Delaware Democrat who is chairman of the Senate subcommittee that oversees the postal service. “If we do nothing, if we don’t react in a smart, appropriate way, the postal service could literally close later this year. That’s not the kind of development we need to inject into a weak, uneven economic recovery.”

Missing the $5.5 billion payment due on Sept. 30, intended to finance retirees’ future health care, won’t cause immediate disaster. But sometime early next year, the agency will run out of money to pay its employees and gas up its trucks, officials warn, forcing it to stop delivering the roughly three billion pieces of mail it handles weekly.

The causes of the crisis are well known and immensely difficult to overcome.

Mail volume has plummeted with the rise of e-mail, electronic bill-paying and a Web that makes everything from fashion catalogs to news instantly available. The system will handle an estimated 167 billion pieces of mail this fiscal year, down 22 percent from five years ago.

It’s difficult to imagine that trend reversing, and pessimistic projections suggest that volume could plunge to 118 billion pieces by 2020. The law also prevents the post office from raising postage fees faster than inflation.

Meanwhile, the agency has had a tough time cutting its costs to match the revenue drop, with a history of labor contracts offering good health and pension benefits, underused post offices, and laws that restrict its ability to make basic business decisions, like reducing the frequency of deliveries.

Congress is considering numerous emergency proposals — most notably, allowing the post office to recover billions of dollars that management says it overpaid to its employees’ pension funds. That fix would help the agency get through the short-term crisis, but would delay the day of reckoning on bigger issues.

Postal service officials say one reason for their high costs is that they are legally required to provide universal service, making deliveries to 150 million addresses nationwide each week. They add that a major factor for the post office’s $20 billion in losses over the past four years is a 2006 law requiring the postal service to pay an average of $5.5 billion annually for 10 years to finance retiree health costs for the next 75 years.

But the agency’s leaders acknowledge that they must find a way to increase revenue, something that will prove far harder than simply slicing costs.

In some countries, post offices double as banks or sell insurance or cellphones. In the United States, the postal service is barred from entering many areas. Still, the agency is considering ideas, like gaining the right to deliver wine and beer, allowing commercial advertisements on postal trucks and in post offices, doing more “last-mile” deliveries for FedEx and U.P.S. and offering special hand-delivery services for correspondence and transactions for which e-mail is not considered secure enough.

Mr. Donahoe’s hope is to cut $20 billion of the $75 billion in annual costs by 2015. To do that, he wants to close many post offices and slash the number of sorting facilities to 200 from 500 and trim the agency’s work force by 220,000 people, from its current 653,000. (A decade ago, the agency employed nearly 900,000.)

The postal service has the legal authority to close facilities, although community opposition can make the process difficult. To placate critics and cut costs, officials say they would seek to run some postal operations out of stores like Wal-Mart or to share space with other government offices.

Cutting the work force is more difficult. The agency’s labor contracts have long guaranteed no layoffs to the vast majority of its workers, and management agreed to a new no layoff-clause in a major union contract last May.

But now, faced with what postal officials call “the equivalent of Chapter 11 bankruptcy,” the agency is asking Congress to enact legislation that would overturn the job protections and let it lay off 120,000 workers in addition to trimming 100,000 jobs through attrition.

The postal service is also asking Congress for permission to end Saturday delivery.

Given the vast range of stakeholders, getting consensus on a rescue plan will be difficult.

Senator Susan Collins of Maine, like many lawmakers from rural states, vigorously opposes ending Saturday delivery, which would trim only 2 percent from the agency’s budget. Ms. Collins, the ranking Republican on the committee overseeing the postal service, said the cutback would be tough on people in small towns who receive prescriptions and newspapers by mail.

“The postmaster general has focused on several approaches that I believe will be counterproductive,” she said. “They risk producing a death spiral where the postal service reduces service and drives away more customers.”

The post office’s powerful unions are angry and alarmed about the planned layoffs. “We’re going to fight this and we’re going to fight it hard,” said Cliff Guffey, president of the American Postal Workers Union, which represents 207,000 mail sorters and post office clerks. “It’s illegal for them to abrogate our contract.”

Senators Carper and Collins do back several of the postal service’s main ideas to avoid default, including recovering around $60 billion that some actuaries say the agency has overpaid into two pension funds. Although the Obama administration is working closely with the senators to find a solution, it has signaled discomfort with the pension proposals, questioning whether the postal service really overpaid.

Meanwhile, Representative Darrell Issa, the California Republican who is chairman of the House Oversight Committee, says the pension proposals would amount to an unjustifiable bailout that would not solve the agency’s underlying problems. He is pushing a bill that would create an emergency oversight board that could order huge cost-cutting and void the postal service’s contracts — a proposal that not just the unions, but Senators Carper and Collins oppose.

Fredric V. Rolando, president of the National Association of Letter Carriers, warned of disaster if partisanship keeps Congress from acting.

“This is about one of America’s oldest institutions,” he said. “It survived the telegraph, it survived the telephone, and we have to do everything we can to preserve it and adapt.”

No body can disagree that convention mail business is a declining business. Certaintly the management of Singapore Post is well aware of that, which is why there are trying to diversify over the last few years by buying other businesses. We need to give them time to see if they are able to successfully transform themselves. On a brighter note, we can assume that competitors may not be keen to enter a declining business with a strong player. This will ensure Singapore Post maintains its turf for the foreseeable future, while trying to enter into other viable businesses.

Also, Singapore Post has been buying back shares from the open market recently, taking advantage of the depressed price.

I am vested.

Sing Post bought back 33 million of shares from the open market from Jul to now, at an average price of $1.06. These shares can be cancelled out or issue as stock options to employees. A look at FY'11 AR, the company has 26.7 million of outstanding options as at 31 Mar. Only 5.5 million out of the 26.7 million outstanding options has a exercise price below $1. In fact most of the options are priced above $1.10. I think Sing Post is prudent to buy back shares at these low price to be given out as options later.