Friday, September 8, 2017

Bought Raffles Medical

Raffles Medical for 2 quarters, has lost it shine as a grower. Both revenue and Profits were flat.

Before this, it was a darling because of the below:


Very consistent, isn't it? 

Now, with earnings stagnating, it show the share price hit a 52-week low recently.

 
 

An almost 1/3 fall from its peak. 

If u read around, there are many reports that state how its business might worsen. Let me summarize (Parrot):

1) Holland V Medical is fully leased but there is no spike in revenue, that means the patient load is worse than expected.

2) China expansion will worsen earning for the next 3 years. Management guided that hospital will turn around after 3 years.

3) My simple and quick Google of cancer doctors, review or doctors show names thrown out mainly from parkway and mount Alvernia. But beside these 2 quarters, their revenue is still on a good uptrend, so I will give them the benefit of doubt that the tactic to go medical services aka clinic is a good one.

So, now it is not just a "non-grower" but also a falling knife.

The reason for buying is more qualitative than quantitive. I remember referring the international SOS for reference to hospital to visit if there is emergency, when bring pupils for overseas trip in Nanjing. I believe many people relied on international SOS for reference for medical treatment because China local hospitals are really quite different from those u find in Singapore outside Shanghai. 

Next, I saw the rapid expansion of medical services aka clinic network across Singapore. These will serve as fillers to send reference to hospital. Why is this still not happening in the 2 quarters no.? I am not sure, but many of these clinics are new. Lot 1 clinic has its crowd. 

I also like the fact that past year expansions did
Not strain the balance sheet. 

I am not sure if this price is cheap, honestly. I however, is willing to accept lower earnings (but not zero profits) as they expand, and accumulate as the price go lower. Singapore market must stay strong.

The money used to buy Raffles came from some liquidation of Silverlake axis. So my cash holding is still 60%. Silverlake is still my biggest holding. 


12 comments:

  1. Another sale with 10-15% gain. Just like other bloggers....Even though you still hold shares in SLA, don't complain for not having a multi-baggers which will change your life financially.

    Note. Not saying it is wrong to sell, but just to response to one of your post of having "no permanent home for your stocks" and no multi-bagger.

    M

    ReplyDelete
    Replies
    1. Hi M,

      Yup. I dun think I will get my permanent home now la. In fact, I am thinking of doing a reboot

      If u read that post u mentioned and the comments, I did share I think very unlikely to have a core right. Waiting for bear, rightly or wrongly. I think my guerilla tactics is quite good. Ny bagger will or will not come, but I did gave it some thoughts le. Unlikely for "venture" mistake to happen again.

      Where is the complaint. Lol. The bull in its 10th year, u not scare I scare.

      Also, I dun think "investment" can change my financial life.

      Delete
    2. what r u talking about?

      Delete
  2. Changed from a 4+ dividend yield to a 1.8+ dividends yield stock. You must have a conviction !

    ReplyDelete
    Replies
    1. SG dividends,

      No convinction. Raffles is not a yield hog play. It's a grower. Maybe a grower that hit a hump. Just like silverlake.

      I look at track records and try to think they are thinking in the business.

      I ask myself if I am willing to own a business like that and at what price.

      I might be wrong. I am wrong most of the time anyway. Be glad to be still surviving.

      Delete
  3. Oh. Ya SG dividends,

    Silverlake should yield 5-6% even excluding special dividends from sale of GIT. Sustainable IMO. Why I sell? Switching ma, dun want to use cash lei. Anyway, as I mentioned silverlake is still the biggest holding of all the stocks inhave

    ReplyDelete
  4. SLA has been stuck at 0.6 for so long. I doubt it will go up. Raffles medical is a better choice for a 6 month holding I believe it will rise back to 1.2

    ReplyDelete
    Replies
    1. Hi Cheryl,

      6 months is a long time. I think SLA has more potential to raise over the next 6 months. Barring external shock, over the next 2 quarters, SLA is more likely to report positive earning surprises than RMC.

      I am preparing to buy more for RMC and sell more for SLA. It means I think SLA should go out and RMC should fall.

      Confused?

      Delete
  5. 8 million shares bought at 1.05 by SS

    Happy ... not a small sum in my opinion

    ReplyDelete
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