VICOM

(22-01-2014, 10:31 AM)valuehunter Wrote: Vicom has been quietly moving up and is now quoted at $5.53 / share. Simply awesome for early investors. I'm just wondering what could be causing the current rerating? Upcoming results? What other catalyst(s) on the horizon?

Indeed am very pleased to see it keeps going up. Bought it at $1.70 during the crisis

(22-01-2014, 10:31 AM)valuehunter Wrote: Vicom has been quietly moving up and is now quoted at $5.53 / share. Simply awesome for early investors. I'm just wondering what could be causing the current rerating? Upcoming results? What other catalyst(s) on the horizon?

It could be for a myriad of reasons such as increased coverage by brokers (though it didn't really move that much post the initiation). Or maybe because it was touted as a good stock to buy at a recent investment conference held last weekend.

I doubt there are any meaningful fundamental catalysts for this stock. Except maybe a special dividend. Though I won't count on it as my base case assumption.

Realistically speaking, what we are seeing here is simply valuation expansion - where people are willing to pay more for the same earning stream. Which at some point will stop making sense, imo.

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(23-01-2014, 12:08 PM)ARC Wrote:

(22-01-2014, 10:31 AM)valuehunter Wrote: Vicom has been quietly moving up and is now quoted at $5.53 / share. Simply awesome for early investors. I'm just wondering what could be causing the current rerating? Upcoming results? What other catalyst(s) on the horizon?

It could be for a myriad of reasons such as increased coverage by brokers (though it didn't really move that much post the initiation). Or maybe because it was touted as a good stock to buy at a recent investment conference held last weekend.

I doubt there are any meaningful fundamental catalysts for this stock. Except maybe a special dividend. Though I won't count on it as my base case assumption.

Realistically speaking, what we are seeing here is simply valuation expansion - where people are willing to pay more for the same earning stream. Which at some point will stop making sense, imo.

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Arc, just curious to find out what investment conference are you referring to?

A good way to think about it is illustrated here.

http://sgx-stocks-sti.blogspot.sg/2014/01/vicom.html

(23-01-2014, 08:57 AM)palantir Wrote:

(22-01-2014, 10:31 AM)valuehunter Wrote: Vicom has been quietly moving up and is now quoted at $5.53 / share. Simply awesome for early investors. I'm just wondering what could be causing the current rerating? Upcoming results? What other catalyst(s) on the horizon?

Indeed am very pleased to see it keeps going up. Bought it at $1.70 during the crisis

fundamentally strong, but slightly overvalued stock
why not go for fundamentally strong + undervalued stock?

That depends on how you see it, if I believe that it will go to 6.5 next year, with a catalyst, then it is better to buy Vicom now rather than buy a strong, undervalued stock, which may not have any visible catalyst.

To illustrate, let us say a fundamentally strong stock is Keppel Corporation, what it its catalyst to gain 20% from here ?

Company reported a 7.7% increase in net profit to s/h, well within expectation. Company raised its special dividend to 6.4c, up from 3.2c. Ordinary dividend increased from 7.5c to 8.1. Total final dividend stands at 14.5c, up from 10.7c.

Naise.

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Vicom is a very good stock but the PE is way too high now
I think buying its parent comfort delgro would give investors more bang for their buck isnt it?

(11-02-2014, 11:17 PM)felixleong Wrote: Vicom is a very good stock but the PE is way too high now
I think buying its parent comfort delgro would give investors more bang for their buck isnt it?

Using its latest FY13 EPS of ~0.32sgd and price of ~5.50sgd, P/E is around 17. Is it too much for a stock that has a CAGR of 28% since 2004, or CAGR of 15% since 2009? Note that its cash and EPS has been on an upward trend for the last 9 years (or even longer).
My general feeling is, yes, Vicom is NOT cheap but Mr Market has not gotten insane enough to value it to grow 'into the sky'.

Looking at FY2012 financials for CDG and Vicom, Vicom's profits is ~10% of CDG. This means a 10% increase in Vicom's profits will only increase CDG's by 1%, not too sensitive IMHO. Without accounting for the other parts of CDG's businesses (especially paid fare) - cab, rail and buses, and also the potential upcoming risks (increased costs in DTL1/2/3 startup), it will take some hard work to calculate out a potential arbitrage situation..

(11-02-2014, 11:17 PM)felixleong Wrote: Vicom is a very good stock but the PE is way too high now
I think buying its parent comfort delgro would give investors more bang for their buck isnt it?

Would you buy a REIT that gives a yield of 3.9%, PE of 17, no debt, 88 cts of cash per share, no significant competition and good pricing power?
Looking from the REIT angle, Vicom looks great as compared with the S'pore REITs.

Even with no growth, the price should not change much due to its quality of earning.