Stock Insights by Financial Bloggers

With the end of the first quarter of 2021, we invited 3 financial bloggers, Seng Foo from Super Stocks Club, Stanely from Value Invest Asia and Willie from Dividend Titan to share their views on 3 Singapore listed companies.

ComfortDelgro Corporation Limited (SGX: C52)

Seng Foo: The share price of ComfortDelgro fell from a pre-COVID level of around $2.40 in January 2020 to a low of $1.33 in March 2020. Since then, the price had been languishing within a trading range (A), until it broke above in November.

The price is now building another base above the resistance turn support line at $1.56 (B). The MACD line is above zero and moving higher, indicating a rising uptrend, however, upside momentum is still muted. A breakout to the upside above $1.80 may propel the price towards the psychological level of $2. Keep a lookout for a strong catalyst, such as any news flow such as the return of air travel and tourists.

The base building (C) over the past 2 months has shown positive accumulation. This is evidenced by the incidence of more green volume bars vs red ones. Such price-volume behaviour is usually indicative of a higher probability of further price strength.

Support : $1.56 

Resistance : $1.80

Stanley: The company did perform better than my own expectation. With the pandemic in full force last year, ComfortDelgro only saw a 17.2% drop in its revenue. However, that is enough to push the company to a full-year loss if we exclude the government COVID-19 relief grant of S$169.3million.

However, there are some plus points as the company is still generating free cash flow and has a strong balance sheet. With the rollout of the vaccine in all the markets it is operating in, it is safe to assume that the worst should be over.

Even so, this is still not a stock for me as the long-term growth potential of the company is not obvious to me.

Without a clear tailwind for the company apart from the short-term recovery from the pandemic, I am not that excited about this company.

Willie: ComfortDelgro is one of the largest transport companies in the world.
This Singapore company was founded to remove “Ali-baba” taxis that were rampant in Singapore during the 1970s.

Today, ComfortDelGro dominates not only the taxi sector, but all other aspects of Singapore’s public transport services, including bus and train.

Here’s the thing. Its taxi business is getting disrupted. With new technology-focused companies like Grab eating into ComfortDelGro’s market share, it puts ComfortDelGro in a tough spot.

Total sales fell 17% to S$3.2 billion from last year. And ComfortDelGro has already cut dividends since 2019. In fact, it has decided to skip its mid-year dividend last year, during the COVID-19 pandemic.

For me, I will not put this stock on my watchlist.

Lendlease Global Commercial REIT (SGX: JYEU)

Seng Foo: Post COVID Circuit Breaker lockdown, the price of Lendlease REIT recovered from a low of $0.44 in April 2020 to $0.77 in June before succumbing to profit taking, forcing it to retrace back to $0.61 (Point A: resistance turned support line). In November, the price managed to break out of its 6 months price zone to move to a high of $0.83 (B) in January.

Although this move was not accompanied by significant volume, the subsequent consolidation from January till now has managed to stay above $0.77 (C), a prior resistance. This is a good sign.

The technical picture has also improved with the medium and longer term moving averages supporting the price. A break above $0.83 may see the price aiming for $0.90, especially if it is on heavy volume.

Support 1: $0.77, Support 2: $0.71

Resistance: $0.83

Stanley: Lendlease Global Commercial REIT achieved a slight growth in its latest result. With the vaccine program well on the way in Singapore, 313@Somerset has been experiencing some recovery in its traffic.

As the international borders reopen, the mall should be able to recover back to its heydays. Given that 313@Somerset is still contributing more than 60% of the net property income, I am expecting better days ahead for Lendlease REIT.

Its property in Milan, which contributes the remaining portion of its net property income has a weighted-average lease expiry of 11.4 years. That gives the REIT some stability in its income for the long term.

Overall, I am expecting the REIT to sustain its current distribution and with a distribution yield of more than 5% for investors now, it is quite an attractive REIT for income investors at the moment.

WIllie: Lendlease REIT’s shares got crushed last year the moment Orchard Road turned into a ghost town. But shopping in Singapore is not dead.

Lendlease REIT’s crown jewel is the iconic 313@Somerset.

At its heart, 313@Somerset is different from other Orchard Road shopping malls. 313@Somerset doesn’t bring in the high-end luxuries like Louis Vuitton, Chanel or Dior.

Instead, the mall positions all its 150 tenants to attract the youthful, hipper crowd. So far, the mall is 99.7% occupied, even during the COVID-19 pandemic.

In fact, 313@Somerset’s tenant sales and foot traffic have already recovered to 73% and 61% of pre-pandemic levels respectively.

If you ask me, this is one stock I’m watching for.

SATS Limited (SGX: S58)

Seng Foo: In Nov 2020, the price gapped above the resistance zone at $3.40 (A) on news of STAS announcing its capability to transport the COVID-19 vaccine developed by Pfizer, which has to be kept at -70 degrees celsius during transit.

The price went on to reach a high of $4.45 before retracing to $3.80 (B) in January.

Currently, the price is stalling at around $4.40 to $4.60 and has lost some momentum, indicated by the MACD barely staying above zero (C). Barring the emergence of positive catalysts, the price is likely to consolidate between $4.20 to $4.60, while building a base for the next rally.
Support: $4.20 

Resistance: $4.60

Stanley: SATS has to be one of the worst-hit companies during the current COVID-19 pandemic. Its results showed a 54% decline in its revenue for the past nine months.

Although the company has narrowed its losses during this financial year, it seems it might only turn a profit when the borders start reopening again.

SATS is struggling to diversify its business away from air travel. CEO, Alex Hungate, has commented that the company is targeting revenue from other sectors like retail chains, fast-casual restaurants and even security services.

However, it is hard to see how SATS has a significant advantage in these new sectors against its competitors. It seems the company is rushing into red ocean industries as its golden goose (air travel) has stopped laying eggs.

Investors interested in this company would only be waiting for the recovery of international air travel as the main catalyst for its future.

Other than that, there is little to be excited about in SATS.

Willie: SATS Limited is a leading S$4.8 billion ground-handling and foods services giant.

The COVID-19 pandemic destroyed air travel, along with SATS operations. In its latest third-quarter results, the company saw a huge 54% drop in revenue to S$251 million and has racked losses of S$2.8 million.

But its bright spot remains. As more COVID-19 vaccines get distributed globally, herd immunity can be achieved sooner. Since SATS is a service company, it doesn’t need much debt and CAPEX. In fact, it's existing S$800 million of cash are more than enough to tide them through this crisis.

When the pent-up demand for air travel resumes, SATS Ltd should be well placed to recover strongly.

This is one stock I’m watching for.

Disclaimer: Please note that the above content is purely for information purposes and does not constitute a buy or sell intention nor represent the views of Investor-One.

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