- Posts: 68
- Thank you received: 0
NextInsight
a hub for serious investors
Eratat Lifestyle
12 years 3 months ago #8471
by momoeagle
Replied by momoeagle on topic Re:Eratat Lifestyle
Hi viviene,
let's just say I like counters like SPH and Starhub because they operate in an industry with extreme high barriers to entry.
I still remember the days when analysts were proclaiming how bad Starhub was after it lost its BPL bid. Furthermore, Starhub has high amount of debts. Was it safe? To most analysts, no. Some were even claiming $1.20 for Starhub (that's a 40% expected decline at that time), and that their dividends was not sustainable. Yours truly bought at this time.
If one took a closer look, Starhub has high FCF, and proved them wrong by raising its quarterly dividends (still less than FCF). This was done while debts are being paid down. And operating in a tightly controlled market, their revenue was more or less assured. Consequently, a ~50% rise for a defensive counter.. Furthermore, we get to see and experience Starhub business first-hand. It is extremely easy to understand this business without getting too detailed.
For our own academic purposes based on my personal selection of counters, I shall compare apples with oranges for Starhub and Eratat. FCF was negative in 2010, and positive in 2011. But sales incentive made 2011 negative again. Dividends are still paid, but on the back of negative FCF. There are no debts, but their market is highly competitive with extreme low barriers to entry. We do not see the business first-hand as well, and to me, it would have been self-delusionary if I says I know and understand Eratat's business very well based merely on their financial numbers and presentations. So naturally, I could be wrong in my earlier analysis of Eratat. As mentioned earlier, it was my personal conclusion based on publicly available information, and of course, YMMV.
It is always interesting to read reports of different companies in my free time and learn how they conduct businesses.
Whether one is right or wrong in one's analysis, something can always be learned from the reports.
And of course, one can always profit from price movements without FA; that's afterall the basis of TA. Good luck to you and wish you huat huat!
let's just say I like counters like SPH and Starhub because they operate in an industry with extreme high barriers to entry.
I still remember the days when analysts were proclaiming how bad Starhub was after it lost its BPL bid. Furthermore, Starhub has high amount of debts. Was it safe? To most analysts, no. Some were even claiming $1.20 for Starhub (that's a 40% expected decline at that time), and that their dividends was not sustainable. Yours truly bought at this time.
If one took a closer look, Starhub has high FCF, and proved them wrong by raising its quarterly dividends (still less than FCF). This was done while debts are being paid down. And operating in a tightly controlled market, their revenue was more or less assured. Consequently, a ~50% rise for a defensive counter.. Furthermore, we get to see and experience Starhub business first-hand. It is extremely easy to understand this business without getting too detailed.
For our own academic purposes based on my personal selection of counters, I shall compare apples with oranges for Starhub and Eratat. FCF was negative in 2010, and positive in 2011. But sales incentive made 2011 negative again. Dividends are still paid, but on the back of negative FCF. There are no debts, but their market is highly competitive with extreme low barriers to entry. We do not see the business first-hand as well, and to me, it would have been self-delusionary if I says I know and understand Eratat's business very well based merely on their financial numbers and presentations. So naturally, I could be wrong in my earlier analysis of Eratat. As mentioned earlier, it was my personal conclusion based on publicly available information, and of course, YMMV.
It is always interesting to read reports of different companies in my free time and learn how they conduct businesses.
Whether one is right or wrong in one's analysis, something can always be learned from the reports.And of course, one can always profit from price movements without FA; that's afterall the basis of TA. Good luck to you and wish you huat huat!
Please Log in or Create an account to join the conversation.
Time to create page: 0.241 seconds