Connect with us

Powered by

4 Stocks This Week [23 Jan 2017 to 27 Jan 2017]

Keppel Corp; International Healthway Corp; M1; and DBS

Our 4 Stocks This Week Column takes us through a hectic reporting season this week. This is the period when most companies report their quarterly or full year results. This makes it very difficult for to choose only four stocks to feature, but we have gone ahead with those that interest us the most.

While our list of interesting stocks may differ from yours, we encourage an open discussion to why you were more interested in other stocks. You can do this via our comments section or our Facebook post, and this will also help other readers.

The Straits Times Index (STI) stayed above the psychological mark of 3,000 this week. Ending up 1.3% for the week, the STI opened at 3025.48 and closed, after a half-day session on Friday (27 Jan 2017), at 3064.85. This pushed the total gains for STI to 5.7% for the year.

This positive sentiment comes on the back of a strengthening U.S. market, which continues to show confidence of a Trump presidency.

Here are the four stocks which caught our attention this week.

Read Also: We Look At IsoTeam, Golden Energy and Resources, Yoma Strategic Holdings and Singapore Press Holdings

# 1 Keppel Corporation Limited

Keppel Corporation released its results Thursday (26 Jan 2017) and it was not a good one. Operating in a tough business environment, Keppel Corp announced an uninspiring set of results for 2016. Its revenue fell approximately 34.3% to $6.77 billion from $10.30 billion in 2015, with all its business segment witnessing weaker sales – Offshore and Marine (-54%), Property (-12%) and Infrastructure (-14%).

Net profit similarly slipped, declining 48.6% to $783.9 million from $1.52 billion in 2015. As a result, its dividend for the year fell nearly 41.2% to $0.20 from $0.34 in 2015.

Also Read: 4 Job Sectors That Could Be In For A Tough 2017

Looking ahead, it issued a press release stating it had been awarded the contract to build Singapore’s fourth desalination plant in Marina East, signing a 25-year water purchase agreement with PUB. Further, its Property business has a strong pipeline of properties in China and Vietnam through 2019 to bolster the segment.

DBS released a report on Friday (27 Jan 2017), keeping the stock at “hold” with a target price of $6.00 in the next 12 months. While this is lower than its current share price, it is still 14.3% higher than its previous target price of $5.25.

For the week, the company’s share price remained flat, dropping by a mere $0.01 from $6.28 on Monday (23 Jan 2017) to $6.27 on Friday (27 Jan 2017). On a year-to-date basis, however, the company has actually seen strong price increase of over 8.1% after opening at $5.80 at the start of 2017. Also, the last time its shares were trading at these levels were at the tail-end of 2015.

Source: Google Finance/ Yahoo Finance

# 2 International Healthway Corporation Ltd

International Healthway Corp, or IHC, has had an interesting week to say the least. On Monday (23 Jan 2017), it held its Extraordinary General Meeting where its entire board was voted out by shareholders. It then requested for a trading halt and subsequently, on Friday (27 Jan 2017), for a voluntary trading suspension as it needed more time to assess the current state of affairs at the company and its subsidiaries. Further complicating matters, the police were even call in when a former executive director was seen carrying her computer and some documents out of the office.

Activist shareholders from Oxley Holdings had petitioned for the ousting of the current board saying developments at the company was “worrying”. This may be based on its lacklustre share price performances and differing thoughts on the company’s capital and business management.

It will be interesting to see what happens next. Operationally, in IHC’s third quarter results, it posted a 19% increase in revenue to $38.4 million but a 68% decline in net profit to equity holders to $9.3 million.

Apart from the “excitement” to follow, there is not much to report on share price movement this week due to the trading halt. Looking further back, the company’s share price is exactly where it was a year ago, at $0.07.

Source: Google Finance/ Yahoo Finance

# 3 M1 Ltd

M1 was another company that released its results for 2016 on Tuesday (24 Jan 2017). It reported an 8.3% decline in operating revenue to $1.06 billion from $1.16 billion in 2015. This was mainly due to lower telecommunications revenue and international calls services.

As a result, its net profit pasted a decline of 16.1% to $149.7 million from $178.5 million the year before.

Aside from its sluggish operations, its share price has also taken a beating with a fourth local telco expected to enter the fray soon. As the smallest of the current telco operators, its business is expected to be most impacted.

DBS issued a report on Wednesday (25 Jan 2017) calling for a “Hold” position on the stock, with a 12-month price target of $1.97, a shade shy of its current $2.05. It too expects a fourth entrant to cause some difficulties to M1, and the other telcos.

During the week, M1’s share price stood firm until the release of its results. After which, it dipped 2.9% on Wednesday (25 Jan 2017) to $2.05 from $2.11 at the start of the week. Looking slightly further back though, M1’s share price has declined almost 29.1% since its 52-week high, which was in July. This could be a worrying trend for shareholders.

Source: Google Finance/ Yahoo Finance

# 4 DBS Group Holdings Ltd

DBS announced that it will be releasing its 2016 results on Thursday (16 February 2017), making it another likely candidate to feature in future editions of this column.

What has interested us however, is that, on Wednesday (25 Jan 2017), SGX posted a market update indicating DBS was traded at a 17-month high of $18.66. Since then, it has further improved to end the week at $19.17 – this means DBS’ 52-week gain stands at a remarkable 41.9%. This also takes its weekly price appreciation to 4.5%.

The main reason for DBS’ price appreciation in recent months can be attributed to the impending rate hike by the U.S. Federal Reserve. As one of the largest banks in the region, DBS is expected to be in a prime position to benefit from the interest rate hike.

Coupled with this, President Donald Trump’s election win on 8 Nov 2016 is expected to hasten such a move. DBS’ sharp share price rise exactly coincides with this (see 1-year chart below the 5-day chart).

Keep a watch on DBS’ share price in the lead up to its results announcement in the middle of February.

Source: Google Finance/ Yahoo Finance

4 Stocks This Week is not a recommendation from us to buy or sell any of these stocks. For investors who are keen to find out more, you should continue researching about them before making your investment decisions.

Read Also: 4 Stocks This Week [16 Jan 2017 to 20 Jan 2017]


4 Stocks This Week is not a recommendation from us to buy or sell any of these stocks. For investors who are keen to find out more, you should continue researching about them before making your investment decisions.

Advertiser Message

Dive Into The Latest Market Updates And Research Reports

With over 25,000 subscribers, SGX Invest Telegram channel has expanded since 2020 to bring you more than just market insights, updates on sector and stock performances, plus all the happenings in Singapore's securities market, tailored for individual investors like you.