SingPost share price set to roil big time again?

Since collapsing to a 10-year low in December 2018, SingPost share price managed to crawl its way back to the $1.00 mark. But it seems that the recovery of SingPost share price could be a false dawn in the making as the management dropped a big hint in its recent financial report that a massive impairment to the carrying value of the US businesses is on the way.

Horror show of SingPost shares

For SingPost, impairments are assessed based on the full financial year results. The last time that SingPost recorded significant impairments was in FY2017 which saw SingPost suffered impairment charges of a massive $208.6million for TradeGlobal. The huge impairment charges walloped SingPost share price upside down back then. Thus, SingPost share price could be poised for another challenging time.

The recent revival in SingPost share price should be attributed to the management’s aggressive share buy-backs. As at 21 March 2019, 13.8 million shares were purchased from open market. The share buy-backs provided critical support for SingPost share price, which would have suffered a worse fate given recent spate of toxic news on SingPost.

Taking into consideration the coming “tsunami” and the aggressive share buy-backs, investors of SingPost should brace for a roller-coaster ride and expect plenty of volatility of SingPost share price in the coming months. Nonetheless, investors should not panic over the swings in SingPost share price because SingPost has a solid balance sheet and strong operating cash flow. The business fundamentals are still sound and it is certainly not all “doom and gloom” for SingPost share price. The key to staying calm is to adopt a long-term view for this counter.

Nightmare form of SingPost share price

Obviously, long-time investor of SingPost must be wondering if SingPost share price can ever see light at the end of tunnel. The past four years had been an absolute nightmare as SingPost share price got bombed out by unfolding events that threatened to derail the growth of the venerable institution. In January 2015, the shares were trading at a sky-high of $2.14. Fast forward four years, SingPost share price had declined more than 50% in value while dividend policy was changed from an absolute amount to a ratio pay-out between 60 percent to 80 percent of the underlying net profit for each financial year.

The appointment of CEO Mr Paul William Coutts in 2017 helped to restore stability, but it is still premature to judge his performance because there is a need to give him at least one more year to produce reasonable results. In the interim, expect plenty of volatility for SingPost share price as the company navigates through choppy waters.

On 7 February 2019, SingPost was fined a record $100,000 by IMDA for failing to meet Quality of Service standards in 2017. As a result, SingPost made a commitment to improve its mail operations. Among the immediate measures included hiring 100 more postmen and increasing staff salaries. It seems that Paul Coutts had his work cut out for him as he not only have to grapple with souring business performances, but also operational issues. Given the state of affair, it is no wonder SingPost share price got walloped in recent years.

To put things into perspective, investors must be [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.]

In a bid to raise financial literacy and reward SG Wealth Builder members, I am pleased to launch the Best SGX stock research campaign. Winner of this contest gets to receive cash prize of $1000!

The rationale for launching this activity is to level the playing field for retail investors, who often lack access to quality SGX stock research, especially homegrown SME stocks. Through this SGX stock research campaign, I hope to raise interest in SGX stocks among local investors, and at the same time, encourage members to share ideas and showcase their analytic skills. The winning entry will be published in this blog for learning purposes.

The winning SGX stock research article must cover a stock that is listed in Singapore Exchange (SGX) and should be engaging and interesting to read. From a story-telling perspective, you can share your best or worst SGX stock investments and what valuable lessons that can be gleaned. Ideally, the article should also contain data to back up the thesis and provides insightful analysis.

Winning prize: $1000 

Eligibility:

1. This campaign is open to existing SG Wealth Builder Members only. If you are not a member, please sign up here. Email subscribers are not eligible.
2. Each SG Wealth Builder member is entitled to submit one article only.

Submission details:

1. Each article must be at least 1000 words in Microsoft Word document. Must not be published at any platform before. Any article found plagiarism would be automatically disqualified. You do not need to provide infographic or images but if you do, they must carry the applicable licenses.
2. Email your submission to [email protected] from 1 April 2019 to 31 May 2019. Late submission will not be entertained.
3. In your document submission, you must provide your member userid or email address.
4. The winning entry will be announced on 7 June 2019 and the winner will be notified through email. He/she must give the consent for the article to be published in this blog in order to receive the cash prize.
5. In the event of a lack of quality submissions, there may be no winner. However, under such circumstances, consolation prizes may be given for entries that do not meet the evaluation criteria.

Not a member yet? You may sign up to become a member of SG Wealth Builder. The full benefits and privileges of SG Wealth Builder Membership:

1. Access to the latest premium articles of SG Wealth Builder
2. Email notifications of latest blog articles
3. Participate in SG Wealth Builder campaigns
4. Request for coverage on stocks, insurance and other personal financial topics
5. Comment in articles and Wealth Forum

SG Wealth Builder Membership

You may sign up for the SG Wealth Builder Membership for only $15 per month. As a member, you can access all the articles, including the premium ones.

Note: After payment is made, you will be prompted with registration form to create your user-id and personal password.

[wlm_paypalps_btn name=”SG Wealth Builder (Annual renewal)” sku=”7BB4D00C52″ btn=”pp_pay:l”]