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Monday, August 17, 2015

Safety in volatile market

Many blue chip stocks have dropped today. Banks are facing an increase number of risks in relation to the economy.

Oil and gas companies and commodities companies had experienced a lower prices on their commodities. This may slow down loan growth in banks and also companies's ability to pay up.

Property stocks like GLP, Capitaland and HK Land, have dropped due to the weakening of the Chinese currency, with fears that a conversion back to Singapore currency will reflect lower profits.

Cargo volumes dropped, indicating a slowdown in overall economic activity. Companies with lesser profits result in their ability to pay back loans. This factor could lead to a slowdown in bank earnings.

The launch of Singapore bonds on 1 October 2015 will also reduce the amount of cash deposits held in banks as close to about $1 billion a month of Singapore bonds will be issued out in October.

Amid volatile markets and a possible correction, these 2 stocks provide safety in volatile markets:
  1. M1
  2. Q&M Dental
M1

  • Oversold
  • 6% dividend yield at current price
  • Offer cheaper plan to scoop up bottom markets to scare off 4th telco
Q&M Dental
  • Aggressively acquiring clinics in Singapore, Malaysia and China
  • Closest to becoming monopoly in Singapore dental industry
  • price to earnings growth stood at 0.3(PEG is undervalued if less than 1)  after Q2 2015 results

5 comments:

  1. I have invested a lot of amount in Singapore Stocks, but till now I have not recovered the amount. Now lets see, how much time would it take to get out of this by following this safety measures.

    ReplyDelete
  2. Can explain more on M1. Their debt is quite a lot. Cash flow is tight. I like to get your view as per the current situation that M1 is still a good stock to consider with myrepublic and viewquest wacking the local scene.

    Regards,

    ReplyDelete
    Replies
    1. M1 have been in the telco scene for a long time, and most of their infrastructure are pretty developed. Their fiber plans are still attractive as compared to other service providers.

      Their annual dividend yield is about 5-6%. They also rolled out cheap plans to scoop up most of the lower end market.

      Based on their current business strategy, i don't think the 4th telco will have the guts to step in.

      Delete
  3. QnM dental PE ratio is 42.35. that seems way too expensive. you used PEG instead. which do i trust more?

    ReplyDelete