3 Shares That Beat the Market Today


Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on changes – just in case they’re material to our investing thesis.

The Straits Times Index (SGX: ^STI) has closed at 3,374 points for a 0.6% gain. Within the index’s 30 constituents, half ended the trading session in the green while 10 others suffered losses.

Let’s take a closer look at some market beaters.

Singapore Telecommunications Limited (SGX: Z74) is up 1.8% to S$4.07. Singapore’s largest telecommunications operator would be releasing its first quarter results (for the financial year ending 31 March 2015) on 14 August 2014.

For the financial year ended 31 March 2014, Singapore Telecommunications saw a 7.3% drop in revenue to S$16.8 billion; fortunately, its profit managed to climb by 4.1% to S$3.65 billion. In its earnings release, the company mentioned that its outlook for revenue, EBITDA (earnings before interest, taxes, depreciation, and amortisation), and free cash flow were all “stable.” Let’s see if there are any changes to the company’s outlook when it hands in its financial report card in a few weeks’ time.

Straco Corporation Ltd (SGX: S85) has gained 2.5% to S$0.81. Over the last 12 months, the company, whose main operating assets are two aquariums located in the major Chinese cities of Shanghai and Xiamen, has been a rocket – its shares have climbed some 165%, unlike the Straits Times Index, which has increased by a mere 4.1%.

Interestingly, the bulk of Straco’s gains have come from an expansion in its Price/Earnings (PE) multiple from 10 a year ago to 20 currently. This is a sign that the market expects much faster growth from Straco now as compared to a year ago. With the company set to release its second quarter earnings on 12 August 2014, investors can soon find out if the company’s able to meet those increased expectations.

Ezion (SGX: 5ME) rounds up the trio here with its shares up 1.9% to S$2.15 following the release of its second quarter results this morning.

For the three months ended 30 June 2014, the offshore support services provider experienced a 38% year-on-year increase in quarterly revenue to US$92.6 million while profit jumped 25.5% to US$45.5 million. Ezion’s top-line growth had been “mainly due to the chartering contribution from the deployment of additional units of [its] multi-purpose self-propelled jack-up rig (“Liftboat”) and Jack-up Rig (collectively called “Service Rigs”).

Besides its strong double-digit growth rates, there’s more for the company’s shareholders to be happy about. The following’s an excerpt from the company’s outlook about its own future:

“The management is witnessing increased focus on platform and well related work by the oil majors in Asia Pacific, Middle East and West Africa. As a result of these activities, [Ezion] will continue to focus on investment in Service Rigs to meet the strong demand.”

The quote above sounds promising enough but there’s something else investors need to note besides the expansion plans: Ezion’s balance sheet is heavily leveraged at the moment, with total borrowings of US$1.41 billion and total cash of just US$353 million. Any further additions to the company’s Service Rigs would very likely end up in the company taking on even more debt and that’s a risk investors have to get comfortable with.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Chong Ser Jing doesn’t own shares in any companies mentioned.