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Experts’ Favourites: First Quarter 2013 Review
Perspective | 19 April 2013
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By: Ong Qiuying
Articles (131) Profile
By: Nicholas Tan
Articles (71) Profile

Do you still remember the stock picks by market experts and the Shares Investment team earlier this year? Alas, it is the time of the year for our much anticipated quarterly review on these handpicked stocks! In this issue, we will be bringing to you the first of a two-part round-up of how the shares chosen by the experts and our team have performed so far and any adjustments that will be made to the initial stock picks.

Before we go into the stock-specific commentary, let us briefly refresh ourselves on the major events that have rocked the stock market in the past three months to have a feel of how the market has performed over the first quarter of 2013. In the local scene, the government announced a comprehensive seventh round of property cooling measures early in the year, leading property counters that are heavily exposed to the local property market to take a beating.

Across the ocean, the US Congress approved to temporarily suspend the debt ceiling through 18 May, averting a bankruptcy scenario which will certainly rein-in on the global economy. In Europe, Cyprus reminded us of the fragilities the Euro region is facing as they were hit by a banking crisis although Eurozone finance ministers have backed a 10 billion euro bailout on 12 April.

Rounding up, in spite of these mixed signals exuding from various economic regions, our Straits Times Index climbed 4.45 percent over the quarter breaching the 3,300-mark for the first time since 2010 to reach a multi-year high of 3,308.1 on 28 March. Take a look at the table below for the performance of the stocks and finally, let us see what the experts have to say about their stock picks in an exclusive interview with us!

Table 1: First quarter performance of the stock picks

Source: Compiled from information on the Singapore Exchange

Gabriel Gan Says…
Star Performer: OSIM International

OSIM reported yet another set of sterling results on the back of strong consumer spending, particularly in China. As China’s economy picks up, I believe this trend will continue. Its new product offerings also augers well and the company is also targeting Europe and US through a franchise model. Investors who bought earlier can continue to hold while those who wish to enter can wait for a pullback but note that this stock does not pull back very meaningfully.

Neptune Orient Lines
NOL climbed very slightly after the last recommendation, which used a recovery theme as a signal to buy. So far, recovery has been anaemic and freight rates have yet to embark on steady growth. While some of the bigger players started to build ships in the midst of lower costs, most shipping companies are running each container at a loss. Although turnaround play looks attractive based on current price, container shipping is still a risk if overall economy and stock market corrects, especially for NOL. I’m still recommending a hold and trading buy.

STX OSV Holdings
STX OSV is hovering around its support level, which is the price paid for the company by the Italian firm. I still like STX OSV for its specialised offshore support vessels but there is evident margin squeeze and earnings deterioration in the last two quarters. A falling oil price would be a bane for STX OSV unless it holds, which would indicate that the global economy is likely recovering. No catalyst to buy this stock at the moment. I would recommend hold but investors can switch to Triyards Holdings if looking at better gains and exposure to offshore sector.

Collin Seow says…
Star Performer: China Aviation Oil

Chart of China Aviation Oil

Charting wise, we can see that CAO broke above the downtrend channel. However, it needs to be re-tested and a rebound has to be seen from this trend line. My view is that $1.00 to $1.04 is a very crucial support. The stock needs to rebound above this level. A confirmation will be a break above the last swing high at the $1.22 level. If this happens, we may see an uptrend towards $1.34. Additionally, the price has broken above the 100-day moving average (MA) and is re-testing it now.

Yanlord Land Group

Chart of Yanlord Land Group

On the charting front, Yanlord has turned from a downtrend into an uptrend. Currently, the uptrend line is still intact and the current price maybe a good price to buy on dips as it has pulled back to the uptrend line. The 20-, 40- and 100-day MAs are still sloping up, hinting some buying pressure in this region.

Ho Bee Investment

Chart of Ho Bee Investment

Ho Bee is currently trading at a discount based on a book value of $2.54 (Price-to-Book ratio 0.79) as investors are wary of weak demand and regulatory risk. Underpinning its second quarter earnings will be the completion of industrial project, One Pemimpin, which is 100 percent sold. Metropolis, which is already 60 percent pre-committed, is expected to complete in the third quarter and would enhance its recurring income in years ahead.

The residential projects Parvis and Trilight, 100 and 99 percent sold respectively, are also expected to be completed in the third quarter. Based on the 20-, 40-, and 100-day MAs, Ho Bee has been on an uptrend and has just broken its last resistance of $1.95. The next resistance is around $2.25.

Willie Tan Yi Li Says…

Catch Willie Tan Yi Li in action at the “Mid Year Financial Market Review 2013” conference on 11 May 2013. For more information, go to www.sharesinv.com/myr2013 .

Star Performer: DBS Group Holdings
Shares of DBS has fared well although the stock is experiencing a slight pullback. However, in the longer term, I view DBS as one of the quality stocks based on fundamentals and technical sides.

Still, I am looking to replace DBS due to the relatively low percentage return I would get if I stay invested in this stock. Singapore Exchange is my choice as trading volume has been on the rise; with the expectation that it is going to be a bull market this year, I foresee that the current trend will continue and would have a positive impact on SGX’s financial performance. Furthermore, SGX is reasonably priced.

SembCorp Marine
SembCorp Marine took a hit in its share price due to its lower-than-expected earnings in the fourth quarter of 2012. I believe the weaker performance is only restricted to the quarter under review as the rate of contracts secured by the company has been relatively rapid. Furthermore, it is the potential beneficiary of developments in Brazil. On the technical side, its shares have undergone a long period of consolidation and I think this phase is coming to an end.

Noble Group
Noble stands to gain in the margin department with raw material costs on the decline due to a strong US dollar. Another catalyst is the pace of the global recovery. The consolidation phase for this stock has spanned over six months; I believe that the turning point for the trend may present itself soon and prices would have a breakthrough compared to being range-bounded.

Gabriel Gan
Holding the post of Senior Vice President at DMG & Partners Securities Pte Ltd, Gabriel is a columnist for mypaper and a regular speaker on numerous shows. He is also quoted on Dow Jones News Wire and Shinmin Daily.

Collin Seow
Collin is a member of MENSA Singapore and Technical Analysts Society (Singapore), holding CPM and CFTe qualifications. He receives multiple invitations from top organisations to provide training sessions.

Willie Tan Yi Li
Being one of the top stockbrokers in the industry, Willie has extensive experience in chart analysis. He has frequently hosted talks and has been invited to speak on shows as well as interview features in the papers.

This is a co-written article of Shares Investment, which lays out the analytical ideas and thoughts of the authors, who are well versed in investments and market concepts.

Triyards Hldgs  -- -- --   
Business: Co provides engineering & fabrication services for the worldwide offshore & marine industries.

Insight: Dec-17, FY17 revenue fell 64.2% to US$116.2m mainl... Read More
China Aviation Oil  1.200 -- --   
Business: Co engages in trading jet fuel and other petroleum products. [FY18 Turnover] Middle distillates (59.9%), other oil products (40.1%).

Insight: Feb-19, FY18 net profit increased 10.5% mainly att... Read More
Yanlord Land Group  1.220 -0.020 -1.61%   
Business: A real estate developer. [FY18 Turnover] Property development (95.2%), others (2.7%), property investment & hotel operations (2.1%).

Insight: May-19, 1Q19 revenue were halved to Rmb3.6b due to... Read More
Ho Bee Land  2.280 -0.05 -2.15%   
Business: Invests in & develops real estate properties in Singapore. [FY18 Turnover] Rental income (91.3%), sale of development properties (8.7%).

Insight: Apr-19, 1Q19 revenue rose 7.7% due to increased re... Read More
DBS Group Hldgs  24.910 -0.24 -0.95%   
Business: [FY18 Total Income] Institutional banking (43.7%), consumer banking/wealth management (42.9%), treasury markets and others (13.4%).

Insight: Apr-19, 1Q19 net profit rose 9% to a record $1.7b.... Read More
Singapore Exchange  8.290 -0.11 -1.31%   
Business: [FY18 Turnover] Equities & fixed income (48.2%), derivatives (40.2%), mkt data & connectivity (11.6%).

Insight: Jan-19, 1H19 operating revenue increased 5.7% to $... Read More
Sembcorp Marine  1.210 -0.050 -3.97%   
Business: Co is a leading global marine & offshore engineering group. [FY18 Turnover] rigs & floaters, repairs & upgrades, offshore platforms (98.8%), ship chartering (1%), others activities (0.2%).

Insight: May-19, 1Q19 revenue fell 31.3% to $810.6m due to ... Read More


Join The Conversation
The Shares Investment editorial team welcomes constructive feedback on our coverage and content. We would also be delighted to answer any questions on the above article. Leave us a comment below, and we'll get back to you shortly!

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