These days I blog more about Hong Kong because I like and am concerned about HK. I had my first international nightstop in HK way back in 1968 and somehow is quite sentimental about the place and people.
I hope HK will returned to normality again.
Beautiful and intelligent..... here


Wednesday, October 30, 2019

To buy or not to buy??

A few years ago I sold all my SIA shares at an average price of $12. Since then I do not own any SIA share. Now that the share price is hovering around the $9+ mark should I get some?
I am just worried about the protests in HK and the Middle East as well as the Brexit issue as it may affect the profitability of the airlines. Perhaps I should wait for it to drop to the $8 mark and then I may scoop some. What do you guys think?

Update: When I look at this 1 year price chart, I think it is not easy to catch it below the $9+ mark. But on the other hand, looking at the chart, it has not reach $10. Dividend wise, it is quite good as it paid 22c per share (yield 2.4% as a reader pointed out which is better than FD which is about 1.7%).

7 comments:

Anonymous said...

Even at $7 I would NOT buy
as airline business is a SUNSET business.

Anonymous said...

why sunset industry? no need travel for hols and biz ah? invented teleportation already huh?

Anonymous said...

Why sunset? bicoz people can travel on budget airlines and Arab airlines
are cheaper and better than SQ.

Anonymous said...

Me bought SIA shares at $15 a piece years ago for investment but now my paper loss runs into the tens of thousands, SAD!

Anonymous said...

to comments number 3- means its not a sunset industry as generalise by comment 1.
comment 1 said airline is a sunset industry but comments 3 say other airlines are still thriving

Not Peter Lim said...

Current price is $9.24 ( closing ).
The dividend was $0.22cts per share
That is a yield of 2.4%.

Better than fixed deposit for SGD account.

But the yield is based on dividend that was already paid out in Aug 2019.
If you buy tomorrow, you may have to keep the share for almost another year.
Would SQ declare a dividend of 0.22cts again or more or less?

What are the events that will kick SQ share price higher than $10 ?
Do you have knowledge ( reliable one ).. ??

Although SQ is a company that is not in debt and has high cash holdings, the airline business is very cut throat. Margins are very thin... and oil prices can be volatile... despite hedging.

Revenue can be good, load factors above 80% ( overall )... but margins, profits is not impressive. With Scoot, Tiger under its care now... its got a very challenging business environment. There are some 8 aircraft ( 737 Max ) sitting on the tarmac at the east apron collecting dust for the last 5 months or more. So the load factor looks good.

Unless you are buying for the purpose of gambling, ( hoping or you have solid info ) that price will be above $11 in the months to come, then nothing more to say but... ok.. we all tompang you...

Also not Peter Lim said...

Take a look at:

SATS... $4.90 ( half price to SQ )
Pays out dividends 2X a year
Yield 3.8% ( last years dividends)
This year dividend already paid $0.13cts, yield 2.7%
and still one more dividend payment to go around Dec 2019.
The business pow-ka liow almost all the airlines operating in/out of Changi
and Seletar. Captures the flying craze from low end to high end carriers.

Or

SGX.... $9.00 ( about same as SQ )
Pays out 4X a year just like REITs
Yield is 3.3% ( this years dividend )
The only stock exchange in Singapore... where else can you
go to buy/sell your stocks?


Both better than SQ in terms of growth and consistent payouts.
SQ is reducing dividends ... only hope is cash distribution or sell away SIA Engineering.

If not just buy 500 shares of UOB and throw the key away.