Wah...averaging up. When SingTel was trading above $4 recently, I had keyed in my Interest Price in my Excel Spreadsheet as $3.95 but I didn't buy when the price was breached. Heng ah.
Next...The Big Question..Why did I buy SingTel?
Dividend
The dividend payout ratio for the last few years is within the 70-73% range. M1's last 2 years payout ratio is 95-99% range while StarHub's last 5 years is 90-101% range. Ouch! In my opinion, SingTel has the capability to maintain and grow it's current dividend compared to the other 2 telcos. Assume the dividend is maintained at 17.5 cents, based on my purchase price of $3.87, my dividend yield would be 4.52%. But wait, SingTel shareholders may receive special dividend with the upcoming Netlink Trust IPO. Don't take my word for it. Check out the source here. On a side note, MM2 Asia just launches Unusual IPO this week. MM2's share price was up by 9% on Friday! I can't say it's due to the IPO but there's no special announcement from MM2 Asia that could explain the 9% jump in share price. What an unusual move! Hopefully, NetLink Trust IPO could give a boost to SingTel's share price.
4th Telco Impact
The upcoming 4th Telco would have the least impact on SingTel. According to the 2016 Annual Report, over 70% of their earnings is from overseas operations.
Market Cap
If we compare the second largest telco StarHub against SingTel, the market cap of StarHub is $4.9B vs SingTel's $63.3B. I am buying shares of a much larger company with overseas business. The closing price of StarHub was $2.84 on 7-4-2017. Sounds like a good deal. I like.😀
Who's been Buying/Selling?
I also like to check who's been buying and selling the company shares recently before I trade. The fact that CEO and Director of the company has been buying the company shares certainly give confidence to investors about the company.
In contrast, M1's CEO has been selling her company shares in recent years. I am an M1 shareholder and I am unhappy about it. What kind of signal is she sending to investors?
Karen ah Karen, this year need to rebalance stock portfolio or not?
Analysts' Forecast
I used the app My SGX to check on analysts' forecast for SingTel.
It's a BUY according to analysts from OCBC and UOB KayHian
From the site markets.ft, huge upside potential
In my opinion, SingTel is a company that would still be around for the next 10 years. It is a company that I could invest for long-term without losing sleep. I am prepared to accumulate on further price weakness.
With this single purchase, I have clocked the higher interest rate for my DBS Multiplier account in April. I blogged about this account in this Post. Buy shares and earn interest at the same time. Shiok ah! 😁
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