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May 31, 2010.

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Wednesday, October 7, 2009

Singapore Exchange (SGX) - Fundamental & Intrinsic Value

Base on latest FY2009 Financial Report
  • PE = 29.4
  • Dividend Yield = 3.07%
  • NAV = $0.7326
  • Net Earning = 51.4%
  • Current Ratio = 1.928
  • ROA = 21.6%
  • ROE = 39.3%

Stock Background
  • 3 Years High = $16.3
  • Current Price = $8.47

Intrinsic Value Calculaton

PE Model
  • Fair value PE, base on FY2010 Forward EPS $0.37843 (Average EPS of 2007, 2008 and 2009)
  • Intrinsic Value = $5.68
  • PEG = 1.49

Discounted EPS Model
  • EPS Growth Rate = capped at 15%
  • Discount Rate = 5%
  • 2010F EPS = $0.3783 (Average EPS of past three years)
  • Intrinsic Value = $6.46

DCF Model
  • 2010F Net Operating Cash Flow = $380.429 Million (Average Net Operating Cash Flow for past three years)
  • Growth Rate = capped at 15%
  • Discount Rate= 5%
  • Number of Shares = 1,062.062 Million
  • Intrinsic Value = $6.11

SGX stock price is currently overvalue and furthermore a double top has been formed in stock chart. I am waiting SGX to retrace back to about $7.00 (61.8% Fibonacci Retracement Level) and re-assess the entry point again. SGX is a good stock for long term investment due to its monopolistic business and long term growth prospect in Singapore (as APAC key financial hub).

2 comments:

  1. Hello,
    may i ask what is meaning of PEG? thanks!

    ReplyDelete
  2. PEG refers PE ratio divided by company growth rate. PEG = 1 means that PE growth rate is the same as the company growth rate (measured by either EPS growth rate or net operating cash flow growth rate)

    If PEG < 1, the stock price is under value.
    If PEG > 1, the stock price is over value.
    If PEG = 1, the stock price is at its fair value.

    You can check out more at "How do I value the stock?" post.

    Happy Reading!

    ReplyDelete

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