At a time when Dairy Farm is selling its 7-Eleven stores in Singapore, arch rival Sheng Siong’s stunning financial performance attracted $100 million from Mondrian Investment Partners Limited which acquired 99,000,000 ordinary shares of Sheng Siong from the company founders. With a Price/Book Value of 5.3 and P/E of 21.7, is Sheng Siong share price inflated? Apparently, Mondrian doesn’t think so.
Mondrian Investment Partners, founded in 1990, is an independent global investment manager with offices in London and Philadelphia and a value-oriented, defensive investment approach. Given its investment mandate, Mondrian must have felt that Sheng Siong share price was undervalued, thus the explanation for the purchase.
Listed in the SGX mainboard only on 17 August 2011, Sheng Siong share price was trading at merely $0.33. Fast forward seven years later, the share price had shaken off its penny stock status to surge past the $1.00 milestone since 2016. The capital appreciation of Sheng Siong share price have created much wealth for long-time investors indeed.
2018 may prove to be another great year for Sheng Siong as the home-grown supermarket operator achieved increased 5.1% year-on-year to $228.3 million in 1Q2018, mainly contributed by new stores and comparable same store sales. Net profit increased by 6.6% to $18.3 million.
The results were certainly impressive given the current weak retail sentiments. Previously, I maintained that I would not invest in this counter due to the following factors highlighted in this article. But the investments from Mondrian could [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]
Sign up as member and receive a bonus investment report on Singapore stocks! The membership benefits include:
1) Access to the latest premium articles of SG Wealth Builder
2) Email notifications of latest blog articles
3) Access to Wealth Forum for investment ideas and discussion
4) Free bonus investment report
5) Request for coverage on stocks, insurance and other personal financial topics
6) Comment in articles and Wealth Forum
Note: After payment is made, you will be prompted with registration form to create your user-id and personal password.
You may sign up for the monthly subscription for only $19.99 per month. You can choose to cancel the subscription after one month with no penalty.
Subscribe to Blog via Email
SG Wealth Builder