They chose financial independence over home ownership.

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"E-book" by AK

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Allgreen: Looking to initiate a long position.

Tuesday, April 12, 2011

I was just reading Allgreen's 2010 Annual Report and I must say that I like the numbers:

EPS: 14.23c which means a PER of just 7.65x at today's closing price of $1.09 per share.

NTA per share: $1.62 which means it is currently trading at almost 33% discount to NTA.

Gearing (Net debt to equity): 0.18x (which I believe is very conservative).

Dividend per share: 5c (XD 5 May 2011) or a yield of 4.59% at today's price.

Technically, the counter could experience some near term weakness as recent attempt to move higher was half-hearted on lackluster volume. The descending 100dMA is still the resistance to watch and that is currently at $1.12. Volume has been increasing as price retreated. OBV has turned down rather sharply, a clear sign of distribution.

Connecting the lows of 24 Feb and 15 Mar would give us a trendline support and a move to test this support is likely as the Stochastics is still bordering on overbought. A correction of the overbought condition could see a weaker share price and I could initiate a long position at $1.06 or $1.07 (50dMA).


Noobz said...

All green is a slow counter.... fundamentally sound but really slow

AK71 said...

Hi Noobz,

Yes, it is. Good for my weak heart. ;)

Anonymous said...

makes me wonder.
" @ a yield of 4.59% at today's price"

Wouldn't your funds be better off with the likes of Saizen (sharp discount to NAV and about 6% yield) or FR/AA/Sabana REIT which have higher yields ?

Curious to know.

Huat ah


AK71 said...

Hi SnOOpy168,

Two different animals. Allgreen is a company and Saizen REIT is a trust. ;)

Looking at the dividend yield alone could be misleading. Allgreen is paying out a small fraction (a third) of its earnings. Saizen is paying out at least 90% of its income.

Allgreen is a great company and I would like to own some of its shares at the right price. :)

financialray said...

Hi AK,

If you already have capitaland and CMA, maybe not too wise to have another property stock. However, if its a small percentage of your portfolio, then its ok to tikam tikam.

Kelvin said...

Me too. I think that Allgreen is a good stock to hold. Like its landbank, especially that they were bought during the down cycle at low price.

But somehow, fengshui or something, their launches ALWAYS (and I really mean always) met with some sort of crisis. Be it the Dubai world period when they launched Cascadia or the Middle East unrest and Japan Quake when they launched skysuite @ anson.

If the price weaken further to around a dollar, I would consider entering too.

AK71 said...

Hi financialray,

I think it is OK to add another counter in the same industry especially one with strong numbers but thanks for sharing your point of view. :)

AK71 said...

Hi Kevin,

Not always. I think the launch of One Devonshire was really successful and they had to resort to balloting. Haha.. ;-)

A dollar would be a very nice entry price. Good luck to both of us. :)

Data said...

A while back there was an article in the press about local property stocks being cheap, in P/E and other terms. They've since gotten cheaper. The fundamentals for Allgreen seem good, but what about the actual returns to come...?

AK71 said...

Hi Data,

Future returns to come? I wish I could say for sure. ;)

I can only invest based on what I know and I certainly don't know the future. ;p

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