See How I Trade Keppel Corporation
Being a fundamentalist, it is intriguing to read the technical analysis done by Dave, founder of See How I Trade. For the next few series of articles, I will attempt to combine both my bottom-up approach with Dave’s top down market analysis on SGX stocks. In this article, I will touch on Keppel Corporation, one of the most favourite blue chips among Singapore investors.
The past one year has been extremely unkind to Keppel Corporation, which suffered a triple whammy from the Lava Jato scandal, potential Sete Brasil bankruptcy protection and plunging crude oil prices. Due to this challenging environment, Keppel Corporation’s share price plunged to a 6 year low of $4.84 per share. Investors of Keppel Corporation were shell-shocked by the extent of the fall as in the year 2014, the share price was still trading at the $10 range. To drop by 50% in value within a year is frightening, even in terms of paper loss.
Many long-term investors of Keppel Corporation put on a brave front and one finance blogger even insisted that Keppel Corporation is not a pure oil and gas play. Of course everybody knows that Keppel Corporation is a conglomerate with diversified business in property, infrastructure and investments segments. But it is important to be objective and not be blinded by emotions. The matter of fact is that Keppel Corporation’s core competence is still in offshore and marine business. In fact, Keppel O&M has contributed S$481 million or one-third of the Group’s income for the year 2015. So to downplay the impact of the oil crisis on the company would be a mistake for Keppel investors.

Based on the recent financial results, performance of Keppel is mixed at best. Cash flow for the full year is horrible, at negative $705 …
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