Monday, June 29, 2015

SATS


SATS is a stock that is defying market trend lately. In a sea of red, it is one of the few shares that is green, and seemingly rising above market odds. In fact, fool.sg recently did a short write up on this stock.

Since I have SATS in my portfolio, the pressing question is always: 1) buy 2) hold or 3) sell. SATS is mainly in the Gateway Services and Food Solutions Business.

Pros:
1. Good dividends payout (3.9%)
2. High cashflow
3. Divested across APAC markets - JP, BJ, MC, TW
4. little competition in Singapore
5. Joint Venture with a leading meat processing company
6. CEO ex HSBC - should be good in managing cash flow and has proven so by managing cost
7. changi airport expansion in 2018 and 2025
8. Investment in high tech transportation of vaccines

Cons:
1. P/E ratio = 20.3
2. pressure from airline industry
3. bad reviews from glassdoor - low employee morale
4. rising labour cost
5. Revenue decreasing trend due to Food Solutions bringing in less revenue. Gateway solutions have not increased to offset fall.

A pretty mixed bag but pros seems to out weigh the cons. i vote hold and purchase more when price drops. However, if price continue increasing then i would consider selling and waiting as i don't quite like buying into high P/E stocks.

What i really like about this stock is : 1) management is moving into high tech transportation business 2) joint venture shows potential for growth

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