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SembCorp Industries: Where are the supports?

Saturday, November 8, 2014

I was asked if I feel upset with SembCorp Industries' share price plunging. Well, I don't know if I feel anything, actually.

I know what motivated me to become a shareholder of SembCorp Industries. I know that I got in at fairly good prices which meant that I did not overpay. This is because I made fairly conservative earnings assumptions from the start and I also bought at a realistic PE ratio of about 12x or so.

Now, with its share price having moved much lower, I could, perhaps, accumulate at a PE ratio of about 11x which would represent better value for money. What about a PE ratio of 10x?

I don't know if prices would move higher or lower. I could make a guess, of course, but I wouldn't know. However, I do know what I would do if the share price were to move lower to test stronger supports.

Related posts:
1. SembCorp Industries: "A safe price of entry."
2. SembCorp Industries: Increasing exposure.
"I feel that it is probably another fair entry price and, so, I did not bring out the heavy artillery."


E H said...

Do you have a stop loss for this counter?

AK71 said...

Hi E H,

I am not trading this counter. So, I don't see a need for a stop loss.

Solace said...

Why be upset when price plunge lower.

I am excited instead. Being trying to be more logical instead of trigger happy at seeing lower price.

Mirror mirror on the wall. At what price should I buy again ? lol.

SMK said...

Possibly people are moving out of utilities and into other sectors the next few years.

Ray said...

man with a plan ;)

qinzheng said...

Hi AK,

What is your next target price? My hands got itchy yesterday n bought some more....

Cory said...

Agreed for trading. Stop loss is also for situation where the company is in serious trouble which i doubt.

Casey said...

hi AK,

Looks like is very emotional, I am accumulating. I am pretty used to short term paper lost. I hope it continues to move downward in this unexpected Mr. Market reaction.

It will definitely doing me a favor if you wanted to sell it, haha. Just kidding.


INVS 2.0 said...

Sembcorp Marine too.

AK71 said...

Hi qinzheng,

Aiyoh, I thought my talking to myself is very clear already. Oops. I am just talking to myself hor. -.-"

AK71 said...

Hi Casey,

You are a true blue FA investor. Salute! :)

If Mr. Market should offer me an opportunity to buy more at a PE ratio of 10x or less, I would probably push out my war chest. ;p

MJ K said...

I am asking myself if i feel upset too. But I hope the price is able to fall lower and I may end up buying more :D

RayNg said...

That is a different between average-down and average-in.

When one set aside say 10% portfolio, 1st he bought 5%, and when the price fall further (as it look cheaper), he will buy another 5% to average-in the overall price.

When one average-down, he may not has a asset allocation. He may keeps average-down when the price falls further. As a result, his % portfolio increase and leads to higher risk due to over exposure to particular stocks.

Cory said...

Sounds like after you buy lower, if the price go lower after is average down. if the price rebound is average-in ?


ronny said...

What is the green and blue mountain in the chart for?

AK71 said...

Hi Ronny,

That is CMF or Chaikin Money Flow. It is a momentum oscillator that I use sometimes to see if money is flowing in or out of a security. :)

ronny said...

Hi AK,

Thanks alot. Been reading up alot of ur blog recently. Keep it going.;)

AK71 said...

Hi ronny,

I am glad you enjoy my soliloquies. ;p

Hope to hear from you again in future. :)

SMK said...

Pe 10.72
almost time for the warchest?

AK71 said...


I feel that SCI is inexpensive now. Buying a wonderful company at a fair price? Sure, why not?

I am waiting to buy more at lower prices too. ;)

qook said...

Hi AK, thanks for your post. My first buy in a long time, SCI @ 4.65

AK71 said...

Hi qook,

Like Warren Buffett, we should be buying quality when it is on sale. Just remember that things could get cheaper. ;)

Steven Yap said...

Hi AK,

4.53 now. Around 10.7 PE.
Seems it will go lower, the oil prices really affects its share price.
Ready your warchest ^^;

Best Regards,

Felix Leong said...

The cheaper the better
SCI is currently trading at only 10 times earnings, a steal for such a wonderful Utility/Marine Blue Chip!

Just buy and hold for long term, the 3-4% yield is great too

As for whether it can go lower or not, its hard to say, but at the current price I think there's good margin of safety, and if you wait for it to become cheaper, you risk missing the boat entirely

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