We noted the beating of Cosco today. As of now 12.30pm ...trading between a range 0.94 - 0.76.Wow. We noted that DMG gave a sell call of this counter...stating some reasons and more reasons and much more reasons..qualitatively..which is true actually. We noted also BT had a report on it with Credit Suisse saying something about drifting lower.
But, let's take a step back..clear our heads a bit, relax..and think simply, shall we? Let's look at some quantitative figures....
Net Profit Margin: 18.71 % ( Ok still some room to maneurvure if demand sucks or supply sucks, compare again with Ferrochina.!)
Debt repayment ability (sorry we refuse to use jargon, bear with us ok!): CA less than CL. ( Hmm but its not that much of a shortfall. not like Ferrochina!)
Cash Flow Muscle: Pretty strong. As you see its Cash from Operations has been positive since 2003 and guess what..even after netting off capital expenditure ( the expenditure needed to sustain this business..in simplified terms) its still positive! ( Some people call it free cash flow..a jargon we prefer not to use) . This is a good sign!SGDividends: Why are we wasting our time on this report? Cos here at SGDiviedends, we refuse to take Analysts reports seriously, Credit Suiise, DMG..blah blah blah... Look at the company's numbers first(MOST IMPT)..take care of its downside first..before using reasons like order book, economy slowdown,risk of order cancellation, delivery delays( which are of cos darn impt too) but kinda fluffy dont you think.
Our recommendation: Your Guess is as good as mine? Decide for yourself!
Important: The objective of the articles in this blog is to set you thinking about the company before you invest your hard-earned money. Do not invest solely based on this article. Unlike House or Instituitional Analysts who have to maintain relations with corporations due to investment banking relations, generating commissions,e.t.c, SGDividends say things as it is, factually. Unlike Analyst who have to be "uptight" and "cheem", we make it simplified and cheapskate. -The Vigilante Investor, SGDividends Team
I like this post. Or maybe cause I have invested in Cosco :P
ReplyDeleteStill maintaining faith in Cosco.
Cosco's management made an announcement to SGX query yestterday... from our perspective, it quite positive cos they manage to get most of the money even though their client went bankrupt...this hints at their pretty good risk reduction strategy in their contract terms!
ReplyDeleteWe are not invested in Cosco though :)......yet