Ernest Lim's investing blog

Unique insights into SGX small caps

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10 things you must know when upgrading from HDB to private (1st October 2019)

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This write-up was reproduced with permission from Ray’s Estate Clinic, written by Founder, Raymond Chng. Please refer to the end of the article for more information on Raymond. The decision to upgrade from a HDB to a private property whether a condominium or landed property is a big decision to many, over the past few years, I have had many clients ask me for my opinions and particularly if they should upgrade. Many HDB owners upgrade because they are fearful of their HDB price being stagnant. The worst thing that can happen is a HDB owner to upgrade into a […]

HRNet – All time oversold levels amid lowest price since IPO! (29 Aug 19)

el15

Dear all Another exciting week! This week, HRNet caught my attention as it approaches all time oversold RSI level. In addition, it is trading at the lowest price $0.560 since its IPO price at $0.900. Given the basis below, my personal view is that HRNet may be presenting a favourable risk reward setup for a long trade. Do look at the basis and more importantly, the risks inherent in such trades.   My personal basis a) Average target price $0.93! Based on Figure 1 below, average analyst target is around $0.930, representing a potential capital upside 66%. Estimated div yield […]

CKH Holdings at 19-year oversold levels; multi-year low price amid 10-year low valuations (6 Aug 19)

el15

Dear all What a hectic and exciting week! This week, CKH Holdings (00001.HK) (“CKH”) caught my attention with its 19-year low RSI level since end Dec 2000. At the time of writing this, CKH last trades at HKD67.60, level last seen around 21 Feb 2014. With such a precipitous decline, CKH is trading below its 10-year average valuations. Given the basis below, my personal view is that CKH may be presenting a favourable risk reward setup for a long trade. Do take a look at the basis and more importantly, the risks inherent in such trades.   My personal basis […]

Sinopec falls 33% since last year; nears 19-year oversold level (14 May 19)

el15

Dear all This week, Sinopec (00386.HK) caught my attention with its 33% fall since 21 May 2018. With its sharp fall, it has become extremely oversold with RSI at 15.1. Given the basis below, my personal view is that Sinopec may be presenting a favourable risk reward setup for a long trade. Do take a look at the basis and more importantly, the risks inherent in such trades.   My personal basis a) Attractive valuations At HKD5.63, Sinopec is trading at approximately 10.3x current PE and 0.8x P/BV. These valuations are attractive as compared to its 10-year average PE and […]

Sembmarine – leveraged play among oil companies (29 Apr 19)

el15

Dear all, This week, Sembcorp marine (“SMM”) caught my attention amid positive industry reports and its strengthening chart. I have started to accumulate SMM with my usual take profit target of a few bids, if any. Let’s look at the basis, and importantly, the investment risks.   Basis a) Analysts are turning positive Based on Figure 1 below, average analyst target price for SMM is around $1.93, representing a potential capital appreciation of around 12% from the current price $1.72. It is noteworthy that JP Morgan has turned positive on SMM last month with a target price of $2.10, after […]

Qualcomm – extremely overbought after a 74% rally within 3 months! (23 Apr 19)

el15

Dear readers, This week, Qualcomm caught my attention as it has appreciated approximately 74% from US$49.10 to trade at US$85.62 in less than 3 months. This is due in part to the favourable announcement that Qualcomm and Apple have reached a multi-year settlement agreement (click HERE for more information)   Why is it interesting? Personally, I think Qualcomm may be a potential short target with a favourable risk to reward proposition with a take profit of a few bids, base mainly on a technical perspective.   Basis to short a) With reference to Chart 1 below, Qualcomm is on a […]

Best World – down 47% in 2 months! Buying opportunity or falling knife? (12 Apr 19)

el15

With reference to my 19 Sep 2018 write-up (click HERE), Best World has appreciated approximately 147% from $1.35 on 19 Sep 2018 to touch an intra-day high of $3.33 on 13 Feb 2019. At that time, Best World has dropped out of my watchlist after its incredible rally. However, with its recent 47% tumble from its all-time intra-day high $3.33 on 13 Feb 2019 to trade $1.76 on 12 Apr 2019, it seems interesting again. Is this a buying opportunity or falling knife?   Why is it interesting? a) Valuations are more attractive now Based on Bloomberg (see Table 1), Best World […]

Chipotle Mexican Grill reaches all time overbought after an 84% rally in less than 4 months! (1 Apr 19)

el15

Dear readers, This week, Chipotle Mexican Grill (“Chip”) has caught my attention with its blistering 84% surge since 24 Dec 2018 and its US$100 rally in the past 16 trading days.   First, what does Chip do? Based on Chip’s company website (click HERE), it is an American chain of fast casual restaurants and has nearly 2,500 restaurants as of 31 Dec 2018 in the U.S., Canada, France, Germany and UK. It is the only restaurant company of its size that owns and operates all its restaurants. Its market capitalisation amounts to US$19.6b.   Why is it interesting? Personally, I think […]

SIA Engineering trades at 9-year low price and 10-year low valuations (26 Dec 18)

el15

SIA Engineering (“SIE”) catches my attention this week because 1) Share price has fallen to the lows last seen in May 2009 – 9 +year low with negative news, more or less well known. It last trades at $2.20 on 26 Dec 2018. Based on Maybank’s report out this month, SIE management has flagged out challenges in their industry approximately two years ago –> on lower maintenance frequency required by newer aircraft and fleet growth at low cost carriers (“LCC”) requiring SIE to think of new solutions to reduce aircraft downtime at hangars; 2) At $2.20, RSI last trades at […]

S&P500 has slumped 13.7% in Dec, largest percentage fall since 1931! Has the bull market ended? (23 Dec 18)

el15

Dear all After hitting an intra-day high of 2,941 on 21 Sep 2018, S&P500 has tumbled 17.9% or 525 points to close 2,416 on 21 Dec 2018. In fact, S&P500 has just logged the worst monthly performance in Dec since 1931! Dow has also fallen 3,535 points from the intraday high of 25,980 on 3 Dec 2018 and 4,507 points from the intraday high of 26,952 on 3 Oct 2018. What is happening? Is Armageddon coming?   Most things have not changed since 21 Sep, except for… In Sep, when S&P500 hit 2,940, the usual concerns were also there, namely […]