Saturday, 20 May 2017

Recent Portfolio Update - Singapore O & G

Dear All,

I have divested all my holdings (3000 units) in Singapore O & G at an average price of $1.31. (Current share price of Singapore O & G is $0.665 which would work out to be $1.31 before the 2 for 1 share split).

(Image Credits: Singapore O & G Ltd)

I still agree that Singapore O & G has a lot of potential to grow. It does still have a reasonable share price at the moment based on its earnings, however, with healthcare counters already taking up the majority of my portfolio, I decided that it was in my best interests to rebalance my portfolio. This is so that I will be able to jump on any opportunities in the market that may come in the future.

The reason why Singapore O & G was chosen out of all my healthcare counters, is because I believe that whilst it carries decent value, the other healthcare counters I currently hold are more "undervalued" relative to Singapore O & G at their current prices, and I believe that they would bring about greater value in the short to medium term at least.

I am also slightly troubled by the declining birth rates. Although Singapore O & G has been able to consistently grow its market share, there would eventually be a point in time in which it's ability to grow my acquisitions becomes more and more limited. This is understandable because as more and more suitable practices are being acquired, the "less suitable" ones increase in proportion to the overall market.

That aside, I will however be likely to reinvest in Singapore O & G if its' plans to expand overseas materialize. The demand for medical tourism seems to be plateauing and unlike my other healthcare counters, Singapore O & G does not have overseas exposure. Doing so would decrease concentration risk and provide much greater opportunities to grow.

Thanks for reading everyone!

A.  😁

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