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Invested in ST Engineering at the right price.

Friday, February 24, 2017

Reader says...
Hi AK,

I remembered you mentioned ST Engineering in one of the session (Evening with AK and friends) a couple of years back (2015) and shared that through one of your readers, you have a greater understanding of their business model. 







At that point, you mentioned you would look at entering the market if it goes below $2.9 per share, it was hovering around $3.2.

It was my first time attending your session so my memory is pretty hazy. 


But I am hoping if you can shed more insights in how you look at valuing ST Engineering? 

I managed to scoop a little shares at $2.7! :)

Thanks,
YC





AK says...
Hi YC,

That was probably many moons ago. $2.7 a share is a very good price. 


I would hold on to it. ST Engineering is a good income generating asset. :)

I shared how I valued ST Engineering using PE ratio before. 


I said this towards the end of 2014 when ST Engineering was trading at $3.30 a share:


Best wishes,
AK

Although I continue to be invested in ST Engineering because I like the consistent and meaningful dividends, to add to my investment, I will not pay more than a 20x PE ratio. 




With FY16 earnings per share (EPS) at 15.6c, that means I would not pay more than $3.12 per share.
Related post:
Mystical art of wealth accumulation.

2 comments:

AK71 said...

Knowing the value of a stock helped this reader to buy at a right price.

Price is what we pay. Value is what we get.

AK71 said...

Reader says...
Is it a good price to buy ST Engineering now?

AK says...
Valuation can be subjective and, often, it is.
You should have your own idea on how much something is worth.

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