Singapore Press Holdings (SPH)

This one was all time favorite for very long time before the disruption by new tech nologies.

But. i only benefitted for a short while or little before disrupted by new media technologies.

This was like a bond investing before media disruption.

But i believe in stock tends to revert to it''s mean.

So stocks very seldom can hold me as hostage.

YMMV.

So what's the new mean value for this stock under new condition?

Can still treat this stock bond like?

If buying SPH might as well change to buying SPH REITS.

Vested a few lots since IPO.

YMMV.

(16-06-2019, 09:54 AM)Temperament Wrote: This one was all time favorite for very long time before the disruption by new tech nologies.

But. i only benefitted for a short while or little before disrupted by new media technologies.

This was like a bond investing before media disruption.

But i believe in stock tends to revert to it''s mean.

So stocks very seldom can hold me as hostage.

YMMV.

For a stock's price to revert to its mean, it usually require a stock's business to revert to its mean.

So the question to ask is, "Can SPH's media business return to former levels of profitability?"

All businesses eventually go through a period of difficulty. But not all recover from the rough patch.

To answer the earlier question, we have to understand the circumstances which put SPH's media business in its present predicament, and ask ourselves if those circumstances are lasting.

So what is the circumstance of SPH's media business?  

Increase in alternative media/news content, due to the ease of media/news content creation, basically by anyone with an internet connection. The monopoly on information, once held by Straits Times and related papers, is over.

...

My prognosis is that SPH's media business will continue to suffer from falls in readership/viewership, as a new generation of media consumers seek alternate media/news sources. Unless one is genuinely interested in local affairs, there is no reason to pick up a copy of Straits Times. Personally, I do not find its content entertaining, interesting, or even enriching. 

In another 10 years, SPH's property-related business may be subsidising its media businesses. 

...

Between SPH and SPH Reit, the latter is an obvious, and my preferred choice. But evaluating the investment merits of SPH Reit would require a separate analysis. In any case, its large market cap would make its pricing very efficient. Which means little-to-no discount from intrinsic value, if bought at present prices.

A company reverts to it's historical mean maybe due to cyclical business climate other than change in business operations.

Most probably due to change in business operations, it should have found a brand new mean.

(17-06-2019, 11:56 AM)karlmarx Wrote: My prognosis is that SPH's media business will continue to suffer from falls in readership/viewership, as a new generation of media consumers seek alternate media/news sources. Unless one is genuinely interested in local affairs, there is no reason to pick up a copy of Straits Times. Personally, I do not find its content entertaining, interesting, or even enriching.

I used to subscribe to both StraitsTimes & BusinessTimes as I had thought that reading voraciously wld help me hone my investing skills, and that the local newspapers wld provide the much needed content for the local business / company news.

However, since a couple of years ago, I unsubscribed to both as I felt SPH was too "politically biased" for my liking. I had since found out not reading both(or those premium articles) doesn't affect my investing results at all ! In fact, I now find most of their business or personal finance articles seem to cater more to the mass market / laymen, people with very basic financial knowledge. There is also too much repeated content(like CPF, credit cards/diff perks, savings accounts/best interest rates, how to save on home loans, insurance etc).

SPH's media biz will continue to decline. The migration of advertising dollars from print to digital is not stopping anytime soon.
SPH WAS almost a monopoly in print but they did not manage to capture enough digital revenue to make up for the loss.
And how could they? Digital is so fragmented and globalized and there are no signs that they have the capability to compete in a this new landscape(locally and globally). It may well turn out to be another metro in the years to come where the media business is just a small part of their revenue. (Correct me if I am wrong, Metro had a property divestment gain 164.5M in FY18, which included the sale of Nanchang Top Spring @$129.3 million. Compare this figure to the side show that is known as the retail operations, which registered a $2.2M loss for the same period)

Much like brick and mortar retail I doubt SPH media biz will cease completely as there is still some inherent demand for it.
But unlike metro retail store and other businesses, there is a near zero chance to find a buyer to take over SPH's media business.
And no one knows when the revenue will stop declining, it seems to be on a perpetual downward trend and that is the scary part.

There are so many good companies out there. Why waste time on SPH? As other buddies had said, the property earnings will be used to subsidize the falling media business.

IMHO, SPH stand NO CHANCE against media companies like Google, Facebook. These companies are going to get most of the Ad revenues that SPH survives on.

(17-06-2019, 07:45 PM)dreamybear Wrote: I used to subscribe to both StraitsTimes & BusinessTimes as I had thought that reading voraciously wld help me hone my investing skills, and that the local newspapers wld provide the much needed content for the local business / company news.

An investor who relies on data for decision making may find the information provided by newspapers to be useful. But there are caveats.

Most of the information needed to make an investment decision cannot be found in a single -- or even a series -- of news articles; newspapers articles do not offer investment theses/analyses. What can be found are bits and morsels of information, whose usefulness to the reader depends on the reader's prior knowledge and intellectual framework. The investor is a detective who has to put together disparate 'bits and morsels of information,' into a logical and coherent story -- or puzzle if you prefer -- for decision making. These bits and morsels are found not only in Straits Times, but also from the investor's own observation/investigation of the company's operations and, most of the time, publicly released (financial) information.

So for investors who are hoping to do better by reading SPH's papers, they only need to ask themselves how much of the information they received from said papers has actually helped them in the description above. Personally, the sections that I find more useful are the 'Home,' and 'Business' section. The former sometimes reveal interesting consumer behaviour and trends -- apart from the numerous banal crime stories (which are mostly not useful) -- while the latter sometimes provides stories on non-listed companies -- which reflect original journalistic work, and not mere reiteration of corporate announcements (which are plentiful). The main section usually starts with a series of government press releases -- which are often rhetorical and seldom provide useful details (like the Chairman/CEO statement of most Annual Reports) -- followed by global and regional news bought from other agencies -- which can usually be found free online. Where an overseas ST correspondent does cover a particular topic, it is usually not insightful, as its reporting does not differ much from the same topic covered by other agencies. Wait a minute. This description seems to fit the research/analyses produced by stock brokerages as well. 

Rare moments of investigative journalism by SPH's papers are so precious, they should be celebrated. Marissa Lee is proof that there are local reporters who are still passionate about producing original and evidence-based stories. But muckraking is bad for business. Not just for SPH, but Singapore in general. Here, the only acceptable time one should be digging dirt on others is when they are already covered in it.

In any case -- back to investing -- an investor still needs an intellectual framework, or larger thesis/understanding of 'how the world works' to be able to interpret/appreciate/assess the usefulness of whatever is read. This can hardly be gained from newspapers, because that isn't what it is designed to do. Instead, I will recommend books on history, politics, and economics -- preferably those that intertwine these three topics -- followed by books on industry-specific topics.