Asked on 04 Apr 2020
I am looking to grow my investment portfolio in long term. Looking at the current Covid-19 situation, SIA will suffering huge loss in near future, this will definitely impact SATS also.
Hold it! There will be recovery, just a matter of time horizon. If you sell it now, you risk the potential gains that will come with the recovery at a later stage. Think long term. Even with the rise of teleconferencing for work purposes, planes are indispensable for the future especially on the tourism side.
I'd ask myself one thing, will SATS survive this downturn? If I think it will, then why shouldn't I be content to hold on while waiting for the recovery? Or even add on to my positions?
Individual airlines might suffer, but unless teleportation is invented during this COVID outbreak, planes will return to the skies one day (hopefully sooner rather than later). SATS is not dependent on a single airline to survive, so they are somewhat diversified there.
I have same shares so let me give my point of view. I have SATS shares myself and speaking from my own action - I bought more shares to get the benefit of dollar cost averaging. How about DBS? Well, I do have shares and it was only 13.40 when i bought that. Current price is still at 18.86 as of 23 april 2020 so for myself, i won't be buying any DBS shares.
Colin Lim, Financial Services Consultant at Colin Lim
Answered on 20 Apr 2020
I believe u probably have around 25% loss.... if i were u, i will hold....
unless you identify a super good stocks that has potential to grow...of course i will encourage u to sell and buy....until then i suggest hold...
Sound alot like you are chasing pumps, which I feel it's a very bad mistake.
Fundamentally, you need to know the reason you bought SATS in the first place. Personally, SATs is on my watch list. I would gladly pick SATS over any airlines for long term because airlines are way too competitive. Have you looked into SATS financials and long term growth potential before buying? SATS have many services, not just airline catering but also baggage handling, commercial catering, food distribution and transfers. No doubt, SATS has a huge exposure to general airline catering and SIA is a big customer but SATS unveiled a $1billion investment plan to penetrate various markets including China. They have hubs in a few big China city and also acquired a % stake in one Nanjing food catering services. If you do some fundamental analysis in the company you will realise that their long term growth prospect is quite bright. If you are looking at a 30 years horizon, all these small changes will not matter at all, continue buying in and load up when it drop even more once financial report comes out. (not an investment advice).
And why DBS at this point in time? Short term wise, all the blue chips (less medically related) ones are going to take a big hit. If you are going to sell your SATS and realise the paper loss, what makes you think that the next stock you buy will not go down?
tl;dr - go back and analyse the reasons you bought into the stocks, if you see an upside potential, buy more at the lower prices to average down.
Depends on your risk tolerance. If you can stomach the loss and done ample research about DBS, then go for it. If you can't stomach the losses, then i suggest you hold long term and pump in new funds to DBS. This covid19 pandemic will take some time.
Do note that all business sectors are not spared from the downturn due to covid pandemic.
Hope it helps.