Wednesday, 26 July 2017

Recent Portfolio Update - Singapore O & G

(source: Singapore O&G Ltd)
Dear all,

As most of you would have read in my previous post, I divested all my holdings (6000 units post-split) in Singapore O & G for an average price of approximately $0.655 per unit. (post-split) about 2 months ago. (NB: this was near to it's peak)

I took advantage of the recent weakness to take a small bite (3500 units) of the company again @ $0.475 per unit. This entry price represents a 27.5% discount as compared to my previous exit-price. In addition a unit price of $0.475 represents a P/E ratio of 25 times earnings (EPS of $0.019), a stark difference to the previous P/E of 35.

Once again, this is a decently risky share. As per most small-cap medical groups, revenue and income are heavily dependent on the key medical practitioners. Furthermore, this is a rather new counter, without a longstanding track record. I'm also uncomfortable with the O&G segment remaining as a significant bulk of the revenue, due to falling birthrates. However this is somewhat offset by their expansion of other specialisations (Derm, Surg etc). In addition, it is worth noting that there was some insider selling (though insignificant) at the start of the year, and the end of last year. The recent sell-down is also questionable due to the large volumes unloaded (and loaded), although there has yet to be any news. There may be a tinge of panic selling amongst this, which I am banking on, but I definitely won't jump to conclusions yet.

To conclude, this is likely to be a short-medium term play rather than a long term one as this is more based on a bit of speculation and a 'value-play'.

Good luck to all holders.


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