Updated: Aug 2021
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http://8percentpa.substack.com
This is a simple way to begin a stock analysis. At the start, try to answer these quick questions to determine whether a stock is worth further analysis.
1. What is the Investment Thesis?
2. It is Cheap?
3. It is a Good Business, Good Franchise?
4. How’s the Management?
5. Does it have Strong Financials?
6. Geographical and Industry Exposure?
7. Dividends?
8. Risks and Mitigators?
9. 2nd Level Thinking Angle?
10. Can I Sleep Well at night holding this?
There are also always a few key stats not covered in the financials and valuations above but are usually important for investors to know:
i) Market share (if applicable)
ii) Growth rate, both for segments and overall
iii) Major shareholders and their stake
iv) Share price range (esp historical low)
v) Company's history
Here are the stocks and great investment ideas discussed so far:
http://8percentpa.substack.com
This is a simple way to begin a stock analysis. At the start, try to answer these quick questions to determine whether a stock is worth further analysis.
1. What is the Investment Thesis?
2. It is Cheap?
3. It is a Good Business, Good Franchise?
4. How’s the Management?
5. Does it have Strong Financials?
6. Geographical and Industry Exposure?
7. Dividends?
8. Risks and Mitigators?
9. 2nd Level Thinking Angle?
10. Can I Sleep Well at night holding this?
There are also always a few key stats not covered in the financials and valuations above but are usually important for investors to know:
i) Market share (if applicable)
ii) Growth rate, both for segments and overall
iii) Major shareholders and their stake
iv) Share price range (esp historical low)
v) Company's history
Here are the stocks and great investment ideas discussed so far:
Diageo is a global leading spirits company that has compounded growth steadily since its inception in 1997. Its strong brands, coupled with good marketing, high market share and strong global distribution has enabled the firm to generate consistent, steady free cashflow (FCF) and high ROIC. Covid presented an opportunity to be able to buy it at a slight discount. At market cap of GBP67bn and projecting a strong recovery in FCF to GBP3bn in the future, its FCF yield is c.4.5%.
Fraser and Neave
Updated Mar 2018!
Investment Thesis: Regional giant in alcoholic and non-alcoholic beverages. It went through a break-up of its businesses and has since been morphed into various other entities since Tiger Beer now belongs to Heineken and its drinks business went to Thai Beverage.
Investment Thesis: Regional giant in alcoholic and non-alcoholic beverages. It went through a break-up of its businesses and has since been morphed into various other entities since Tiger Beer now belongs to Heineken and its drinks business went to Thai Beverage.
Overseas Education
Investment Thesis: Overseas Education operates one of the largest international schools in Asia. It is a veteran operator with more than 20 years of track record and currently teaches more than 3,000 students. Enrolment should rise as the school recovers from the aftermath of its change in location from Orchard to Pasir Ris and the exodus of expats out of Singapore. Education is a solid business with 6% long term inflation on fees and is highly cashflow generative. The stock currently gives a 6% dividend.
SIA Engineering
Investment Thesis: SIA Engineering benefits from the rise in air travel in this part of the world. Air travel had grown tremendously over the last few decades and would continue to do so. As such, aircraft requires regular maintenance and Singapore is aiming to be an aerospace hub for Asia. This stock also gives a high dividend yield of 5%.
Investment Thesis: Genting is one of the only two casino operators in Singapore earning over 3 billion dollars in gross gaming revenue or 45% market share on the island. At the time of discussion, the stock looks very cheap as it dropped to a multi-year low and free cashflow yield was close to 10%. It has also sought to differentiate itself by providing family entertainment and a different experience for tourists. It owns Universal Studio Singapore as well as other strong entertainment franchises that would continue to grow alongside its casino business.
Investment Thesis: Jardine Cycle and Carriage operates the largest automobile and motorcycle distribution in Indonesia and has various auto related businesses in Singapore, Malaysia and had recently entered Vietnam. Vehicle distribution is a solid business with recurring cashflow coming from maintenance, financing and other services. The stock was generated close to 10% free cashflow yield and gives out a c.3% dividend at the time of discussion.
Colgate
Investment Thesis: Global leader in oral care with the best brand, product innovation and strong distribution. It also has pricing power and enjoys strong brand equity with its heritage. High exposure to emerging markets, especially Latam. It might be taken out by global consumer giants such as Unilever.
Hyflux
Investment Thesis: Theme on global water shortage. But the only post so far is just a quick and dirty analysis on the pref shares that it issued. This company is now undergoing bankruptcy procedures.
Swatch
Investment Thesis: Global integrated manufacturer of watches and movements with a strong portfolio of brands and exposure to growing markets in Asia and China. There could be a revival in the luxury watch segment after China's anti-corruption campaign and the creation of new consumers with wearables.
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