Design Studio - exploded!

mokooi
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14 years 2 months ago #3169 by mokooi

Replied by mokooi on topic Re:Design Studio - exploded!

I think, If you wanna go after dividend yield, you should buy stock with Monopolistic business, regulated business, utilities, consumer staples and the likes, e.g: Singtel, Starhub, SMRT, SPH,etc .. in which business are relatively stable and predictable, hence your dividend is much more assured. Why buy a company ( a small cap some more ) in which itÃ¢â¬â¢s business is dependent on itÃ¢â¬â¢s ability to clinch contracts, on economic conditions, and hope you can depend on it to give consistent dividend ?! To me that sounds reckless at best, if not downright moronic ! Just my opinion, no flame please.. :laugh:

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soyabean
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14 years 2 months ago #3172 by soyabean

Replied by soyabean on topic Re:Design Studio - exploded!

Precisely. Sometimes we tend to forget basic principles like this, takes a little reminder once in a while...

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musicwhiz
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14 years 2 months ago #3173 by musicwhiz

Replied by musicwhiz on topic Re:Design Studio - exploded!

mokooi wrote:

I think, If you wanna go after dividend yield, you should buy stock with Monopolistic business, regulated business, utilities, consumer staples and the likes, e.g: Singtel, Starhub, SMRT, SPH,etc .. in which business are relatively stable and predictable, hence your dividend is much more assured. Why buy a company ( a small cap some more ) in which itÃ¢â¬â¢s business is dependent on itÃ¢â¬â¢s ability to clinch contracts, on economic conditions, and hope you can depend on it to give consistent dividend ?! To me that sounds reckless at best, if not downright moronic ! Just my opinion, no flame please.. :laugh:

Well with due respect, there\'s always the possibility of business decline, or that the market price may not factor in margin of safety; hence the risk of capital loss may outweigh the dividend yield. One must be aware that not all blue chips remain blue forever; and not all companies are priced attractively enough to hold for the long term. This is especially so when blue chips have recovered from a sharp bear market (as they are usually the first to recover). If based on the argument that one had purchased blue chips during the depths of the bear market, then I will conclude the yield is very attractive and probably can be sustained. The reason why one goes for small caps is not only for dividend yield, but it is usually a mixture of yield and growth. Note that KC also has growth potential though it may not be as \"explosive\" as companies in other industries which retain all their earnings and do not pay a dividend. Then again, these companies may also have a higher chance to fizzle out and may have to issue equity or take on more debt. So it\'s not as simple as just looking at small caps versus blue chips for stability of yield. One has to observe the business model and industry closely.

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newbie123
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14 years 2 months ago - 14 years 2 months ago #3174 by newbie123

Replied by newbie123 on topic Re:Design Studio - exploded!

Hi, I actually vested in both Design Studio and Kingsmen Creative. Both are their good in their own ways and musicwhiz has highlighted several interesting points. As pointed out before, Kingsmen is purely services-based mix with design solutions. On one hand, Design Studio is offering design + manufacturing. Thus, it is because of this higher end design and manufacturing expertise that allows Design Studio to command a higher profit margin. Design Studio has also been trying very hard to go lean on their manufacturing. Musicwhiz is also right for saying that for Design Studio, there is a risk of inventory not able to be sold off whereas for Kingsmen, much lesser working capital is needed. My view is in terms of economic downturn, i think Design Studio will be more volatile compared to kingsmen. But as economy recovers, the growth in Design Studio becomes more obvious. I do see growing potential in both these companies. Hope to see both companies showing good earnings in 2010. Just some thoughts newbie123 = newbiestock from cna forum

Last edit: 14 years 2 months ago by newbie123.

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rondku
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14 years 2 months ago #3176 by rondku

Replied by rondku on topic Re:Design Studio - exploded!

It is interesting to see the comparison between Design Studio and Kingsmen Creative.... I think both companies are good and I don\'t mind accumulate some when they pull back. But one thing for sure that I will not consider these companies as dividend play. I would rather use REIT in my portfolio. I think they are more growth stocks more then dividend stock. my 2 cents....

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soyabean
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14 years 2 months ago #3178 by soyabean

Replied by soyabean on topic Re:Design Studio - exploded!

Hi MW, Think you din get my point. I\'m comparing monopolistic biz versus contract based biz in the approach for dividend yield, not blue chip vs small caps. I have more tendency to think the former will allow more stability in forecasting revenue than the latter and hence the expected dividends (such biz may be blue chips coincidentally but lets not forget monopolies are not monopolies for no reason) Of course the usual market timing argument of getting any chips during bear market will generate attractive yields no matter its blue chips, potato chips, tapioca chips,etc. Yes some small chips consistently give out good dividends as well, but thats not where the focus is.. Its the nature, not the size...

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