Sheng Siong and Riverstone
Here are 2 stocks that I think have potential to grow. What I like and is common between both stocks is that they have ZERO debt. How cool is that?
*All figures taken from Bloomberg and Yahoo Finance
| Sheng Siong | Riverstone | Who wins? | |
| Price seen | 0.66 | 0.965 | |
| Market cap | 984M | 357M | |
| PE ratio | 20.47 | 14.26 | |
| Debt | No debt | No debt | |
| Estimated PEG | 1.855 | 1.1147 | RS |
| Earnings per share | 0.0324 | 0.0669 | RS |
| Return on equity | 28.96% | 20.16% | SS |
| Price to sales | 1.37 | 3.22 | SS |
| Revenue per share | 0.51 | 0.3 | SS |
| Cash per share | 0.07 | 0.07 | SS |
| Profit margin | 6.13% | 17.17% | RS |
| Dividends | 4.40% | 7% | RS |
| Upcoming plans | JV with China | New plant double capacity |
It is easy to get overwhelmed by statistics and I can simply add more criterion to skew my decision either way. The main thing is deciding what is more important and what is not. Averaging out their growth for this year, taking PE as a constant, I have a rough price. Only Sheng Siong's previous 3 quarters was average out and I can't find the previous quarters data for Riverstone.
So I could say that both companies are doing well provided the growth is sustained to Q4 2014. Let's see if I am right.
| Sheng Siong | Riverstone | ||
| Average Growth | 21.3% | 9.7% | |
| New price | 0.814 | 1.046 | |
Disclaimer: I have not bought both stocks here as I am still monitoring their results.
Jes
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hi
ReplyDeletewould be nice to hear your views on non-statistics perspective on sheng siong:
while they are in the FMCG industry, there is an increasing trend on online purchase by consumers here with innovators like redmart trailing the trend and NTUC following closely to match competition.
would more consumers jump on the bandwagon over time to switch online rather than offline ?
While it is not possible for a complete switch due to buyers' behaviors - seniors used to buying at sheng siong and ntuc, the younger, affluent working adults would be hard pressed for time and appreciate this much need convenience.
supermarket need big space and storage space and the rental is going higher here in SG and would the company somehow passed it down to the customers?
with the demise of carrefour here in Sg, who would be the next on the chopping board?
It's not true that Sheng siong have zero debts. I just looked at the latest quarterly report from them. They have a debt/equity ratio of 0.46. Hmm, should double check your source.
ReplyDeleteHi Desmond,
ReplyDeleteOnline purchases are definitely on the rise and although not popular, Sheng Siong does have a website to cater to this: https://allforyou.sg/
Most Sheng Siong outlets are 24 hours so it is good for working adults. Space is indeed a constraint, for the costs to pass down, the immediate threat should be oil and toll charges.
Carrefour does not have a good location and is more comparable to Cold Storage. I don't think Sheng Siong will be on the chopping board for the next 5 years but I can't foresee how their overseas venture will turn out.
Thanks for making me think harder!
Hi la papillion,
ReplyDeleteFrom the Q3 2014 report: "The Group had no borrowings as at 30 September 2014 and 31 December 2013 respectively." Yahoo Finance also quote it at 0 debt. Do let me know where you see that 0.46 ratio!
Hi Jes,
ReplyDeleteI think I know what's the problem. When you write 'no debts', I take it as 'no liabilities'. It's not the same thing, but to me, liabilities and debts are the same - it's still something that you had to pay off.
I'm really referring to liabilties/equity ratio of 0.46 then. My bad..
Hi la papillion,
ReplyDeleteNo problem, good to know where you are coming from.. I guess your criterion must be very stringent to look at liabilities/equities instead of debt/equities..
Thanks for reading anyway!