Friday 30 May 2014

Singapore Stock Tip: Why are we right to issue a buy call on Singpost on 10th April 2014?

Dear Friends,

These few days, there are so many reports on Alibaba investment on Singpost. Congratulations to those that went in on our recommendation of this company!

We recommended people to pick up this stock in on 10th April on TV, my blog and Facebook. In fact, after I recommended, I receive a message from a Singpost employee instructing me not to buy the stock as she thinks the company management is bad with no prospect!

Ha, I guess she belittle her employer! Little did she know that this stock has such a potential.

Today I want to relate to you the reason why I issued a long term target of $2 for this stock!

Article on 10th April titled:

Singapore Long term Stock Tip: Singpost is positioned to be the Alibaba of South East Asia

It is such a coincidence that Alibaba to be the company that invest in Singpost! Ha, there are people who thought I have insider info regarding this. Of course I don't! Ha. I am just lucky enough to spot the intentions of Singpost. Perhaps I do understand better than most retailers how stocks work.

My advice to stock investors when it comes to long term investment is to focus on just one word,

The reason why I ask everybody to look at this company in April is because of the growth prospect of the company! And the benchmark of growth should be reflected in its earnings or sales.

This company has the goal of becoming the e-commerce logistics giant of South East Asia just like Alibaba of China. And how do I know this? It is based on them acquiring quite a few companies in e-commerce logistics these few years. And this year, all these companies Singpost acquired are contributing great returns to the Singpost.

You can see it from their quarterly results! Singpost wants to be the giant of South East Asia (SEA) e-commerce. Alibaba wants to be the e-commerce giant of ASIA! That is why they want a piece of Singpost. Having no businesses in SEA, the quickest way is to acquire Singpost. They see the growth prospect of Singpost and SEA e-commerce. It isn't difficult to see their intention.

Singpost is growing fast these 2 years! This year, they are projected to have a revenue increase of 25%. And this growth is expected to continue till 2017. Not many companies in singapore can achieve that return, right?

When we try to invest in a stock for the long term, please do not look too much into the past. What is important is the future.

And please remember that not a lot of Singapore companies have the ability to dominate overseas market. If you spot one like Singpost, you need to have a piece it.

(Please note that the price is $1.69 today. For short term term, I don't think there is much upside. For long term play, my target is defintely above $2!)


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