Warren Buffett has over the years passed on lots of sage advice and priceless tips to investors. Perhaps one of the best pieces of advice comes from his love of baseball.
He once said that the stock market is a “no-called-strike” game. In other words, you don’t have to swing at everything that is pitched at you. You can afford to wait for the right ball pitch.
So, would Warren Buffett take a swing at Thai Beverage (SGX: Y92)?
Buffett likes companies with low earnings volatility. In other words, he warms to businesses that are able to deliver stable earnings. Thai Beverage comes close to what Buffett would describe as a company with reliable profits. Both operating income and net income have been consistent – almost to the point of being unexciting.
The brewer has also demonstrated consistency in terms of its Net Income Margin. With the notable exception of last year, the company’s Net Income Margin has hovered around the 10% mark.
However, the margin is about 50% lower than the average for Singapore’s blue chips. The median for the 30 companies that make up the Straits Times Index (SGX: ^STI) is around 18%. Additionally, it is lower than, say, rivals such as SABMiller (LSE: SAB), which boasts higher gross and net income margins.
But what Thai Beverage lacks in margin, it more than makes up for in efficiency, which is another of Buffett’s investing criteria. Its Asset Turnover is one of the highest amongst Singapore’s large caps. At 1.1, the company is generated $1.10 of revenue for every dollar of asset employed in the business. By comparison, the average Asset Turnover for Singapore’s blue chips is 0.50.
That is about as good as it gets for Thai Beverage – it fails on the last two criteria for a good Buffett stock. Warren Buffett takes a dim view of companies that use excessive leverage. And Thai Beverage’s Leverage Ratio of 2.4 is about 40% higher than the average for Straits Times Index companies. Additionally, the company’s share price volatility of 35% is almost double that of Singapore’s blue chips.
On balance, then, Thai Beverage is unlikely for the moment to figure highly on Warren Buffett’s list of attractive companies.
CNA: Airport-Related Business Soars With S$9 Million Changi Airport Contracts
06 Jan 2014 17:39
Newly clinched more than S$9 million worth of contracts in Singapore Changi Airport. Installation of the new Building Management System in Terminal 2 and VIP Complex. Operations and Comprehensive Maintenance of Integrated Building Management System. Marks the fourth airport-related project secured in the region for 2013, which brings the total worth of airport related contracts in 2013 to S$24.6 million. Close to 20 years of serving Singapore Changi Airport. Airport-related business is a key growth driver for 2013 and 2014...
AusGroup: Proposed Private Placement Of 96.1 Million New Ordinary Shares At S$0.168 Each
06 Jan 2014 10:40
AusGroup Limited's entered into a placement agreement with DBS Bank Ltd., pursuant to which the Company has agreed to issue, and the Placement Agent has agreed to use its best efforts to procure the subscription and payment for, an aggregate of 96,100,000 new ordinary shares in the capital of the Company at an issue price of S$0.168 per Placement Share, amounting to an aggregate consideration of approximately S$16.1 million...
Global Logistic Properties Limited (GLP), which provides modern logistics facilities in China, Japan and Brazil, has leased 106,000 square metres (sqm) or 1.1 million square feet (sq ft) to Riachuelo at GLP Guarulhos in São Paulo.
The customer is the largest fashion retail company in Brazil. Jeffrey H. Schwartz, Co-Founder and Chairman of the Executive Committee of GLP, said: “We believe GLP Guarulhos is the best logistics park in Brazil in terms of building standards, location, infrastructure and space capacity. Given Riachuelo’s growth plans, the company looked not only for an optimal location but also a facility that would allow for future expansion.
Our team in Brazil did an outstanding job in working closely with Riachuelo to understand, and satisfy, their near and long-term logistic requirements.
” Riachuelo is part of Guararapes Confecções S.A., the largest fashion group in Brazil with 212 stores nationwide totaling 490,000 sqm (5.3 million sq ft) of sales area and 39,000 employees.
In 2013, the company opened 43 new stores. Guararapes is listed on the São Paulo stock exchange (BM&FBOVESPA: GUAR3(ON); GUAR4(PN)) and the group researches, develops, produces, distributes and finances fashion throughout Brazil. GLP Guarulhos is part of GLP Brazil Development Partners I, in which GLP holds a 40% stake.
It comprises 15 buildings to be built in phases, with a total leasable area of 435,000 sqm (4.7 million sq ft).
The four completed buildings totaling 154,000 sqm of leasable area (1.7 million sq ft) at GLP Guarulhos are 100% leased. GLP Guarulhos’ strategic location makes it an ideal hub for domestic distribution in Brazil, the company said.
It is located 24 km from downtown São Paulo and 15 km from São Paulo–Guarulhos International Airport, with a private overpass access to the Dutra highway – Brazil’s most important highway linking the two major markets of São Paulo and Rio de Janeiro.
