Username
Password
Forget Password?
  1. Indices
  2. Commodities
  3. Currencies
Straits Times 3,166.84 -16.16 -0.51%
Hang Seng 26,754.12 -36.12 -0.13%
Dow Jones 27,147.08 +36.28 +0.13%
Shanghai Composite 2,985.66 +7.54 +0.25%
Hock Lian Seng: Robust Order Book At A 3 Year High
Aspire, Hot Picks | 15 December 2014
Related stocks:
J2T
By: AK(ASSI)
Articles (41) Profile

I have been a shareholder of Hock Lian Seng’s since 2010. I accumulated a core position in the stock and also did a bit of trading for extra pocket money. In the last couple of years, however, I have mostly been accumulating the stock because I thought Mr. Market was too pessimistic.

The last time I bought more of the stock was in February 2014 at 25.5c a share. Before that, I bought more in May 2013, at 26c a share. As some readers might have guessed, I developed an interest in Hock Lian Seng because of its attractive dividend payouts. Hock Lian Seng pays out about 40% of its earnings as dividends to shareholders every year and the yield is upwards of 5%.

I was waiting for more weakness in its share price to accumulate and since the stock was hardly covered by analysts, I thought the chances were quite good. Well, I think I can stop waiting.

Why?

There could be much more interest in the stock now that The EDGE published an article on it and after UOB Kay Hian published a report that highlighted a few points regarding Hock Lian Seng:

  1. Company has a net cash position of $88 million or about 58% of its market cap.
  2. Its two industrial properties, Ark@Gambas and Ark@KB, in Sembawang and Kaki Bukit are 80% and 99% sold. They are expected to obtain TOP in end 2014 and early 2015, respectively. So, Hock Lian Seng’s cash position will improve as it recognises net proceeds of $60 million to $70 million from the projects.
  3. Consistent and attractive dividend payout of a third or more of its earnings. Special dividends possible. See point 2.
  4. Order book with contracts worth $345 million as at September. This is a 3 year high.

If Hock Lian Seng should attract coverage from more analysts and if they are mostly positive about the stock like I am, I think opportunities to accumulate the stock on weakness could be harder to come by in future.

Looking at the chart, Hock Lian Seng’s share price could retrace to 27c, the support provided by the trend line. If it should happen, it could be an opportunity for me to buy more although I would have liked to buy at prices lower than that.

AK is a Singaporean stock market investor and a popular blogger. His blog was created with the intention of educating investors and sharing his investing journey with the target of having a more secure financial future in an uncertain world by creating a stream of reliable passive income with high yields.

AK is a Singaporean stock market investor and a popular blogger. His blog was created with the intention of educating investors and sharing his investing journey with the target of having a more secure financial future in an uncertain world by creating a stream of reliable passive income with high yields.

Please click here for more information about this author.

Hock Lian Seng Hldgs  0.340 +0.005 +1.49%   
Business: [FY18 Turnover] Civil engineering (97.1%), property development (2.8%), investment properties (0.1%).

Insight: May-19, 1Q19 revenue rose 15.3% contributed mainly... 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!

All Rights Reserved. Pioneers & Leaders (Publishers) Pte Ltd. Best viewed with Mozilla Firefox 3.5 and above.