PRIVACY POLICY

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Saturday, November 8, 2014

SembCorp Industries: Where are the supports?

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."
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24 comments:

  1. KCNovember 8, 2014 at 12:16 PM

    Do you have a stop loss for this counter?

    ReplyDelete
  2. AK71November 8, 2014 at 12:26 PM

    Hi E H,

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

    ReplyDelete
  3. SolaceNovember 8, 2014 at 12:54 PM

    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.

    ReplyDelete
  4. SMKNovember 8, 2014 at 2:27 PM

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

    ReplyDelete
  5. RayNovember 8, 2014 at 2:53 PM

    man with a plan ;)

    ReplyDelete
  6. qinzhengNovember 8, 2014 at 3:36 PM

    Hi AK,

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

    ReplyDelete
  7. CoryNovember 8, 2014 at 4:00 PM

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

    ReplyDelete
  8. CaseyNovember 8, 2014 at 5:46 PM

    hi AK,

    Looks like mr.market 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.

    Casey.

    ReplyDelete
  9. INVS 2.0November 8, 2014 at 7:17 PM

    Sembcorp Marine too.

    ReplyDelete
  10. AK71November 8, 2014 at 9:47 PM

    Hi qinzheng,

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

    ReplyDelete
  11. AK71November 8, 2014 at 9:49 PM

    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

    ReplyDelete
  12. UnknownNovember 10, 2014 at 12:48 AM

    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

    ReplyDelete
  13. RayNgNovember 10, 2014 at 11:03 AM

    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.

    ReplyDelete
  14. CoryNovember 10, 2014 at 1:44 PM

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

    :P

    ReplyDelete
  15. ronnyNovember 10, 2014 at 7:37 PM

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

    ReplyDelete
  16. AK71November 10, 2014 at 9:46 PM

    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. :)

    ReplyDelete
  17. ronnyNovember 11, 2014 at 12:45 AM

    Hi AK,

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

    ReplyDelete
  18. AK71November 11, 2014 at 10:27 AM

    Hi ronny,

    I am glad you enjoy my soliloquies. ;p

    Hope to hear from you again in future. :)

    ReplyDelete
  19. SMKNovember 12, 2014 at 10:09 AM

    Pe 10.72
    almost time for the warchest?

    ReplyDelete
  20. AK71November 12, 2014 at 11:07 AM

    Hi SMK,

    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. ;)

    ReplyDelete
  21. qookNovember 12, 2014 at 2:15 PM

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

    ReplyDelete
  22. AK71November 12, 2014 at 2:21 PM

    Hi qook,

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

    ReplyDelete
  23. StevenNovember 14, 2014 at 3:50 PM

    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,
    Steven

    ReplyDelete
  24. ^_^November 17, 2014 at 3:54 PM

    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

    ReplyDelete