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. With 17 of its 30 constituents logging gains today while having only nine others suffer losses, the Straits Times Index (SGX: ^STI) has managed to inch up by 0.2% to 3,324 points. Let’s take a closer look at three market beaters. ComfortDelGro Corporation Limited (SGX: C52) has climbed by 2.4% to S$2.54. Just last week, the land transport outfit released its second quarter results and…
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.
With 17 of its 30 constituents logging gains today while having only nine others suffer losses, the Straits Times Index (SGX: ^STI) has managed to inch up by 0.2% to 3,324 points.
Let’s take a closer look at three market beaters.
ComfortDelGro Corporation Limited (SGX: C52) has climbed by 2.4% to S$2.54. Just last week, the land transport outfit released its second quarter results and broke a new record – it had earned quarterly revenue in excess of S$1 billion for the first time ever. To be more specific, ComfortDelGro’s revenue for the quarter had increased by 11.9% from a year ago to S$1.019 billion.
Meanwhile, its profit had grown by 9.9% to S$75.7 million as its operating expenses outgrew sales. Regarding ComfortDelGro’s future outlook, my colleague Chin Hui Leong managed to give a tantalising glimpse on the company’s market opportunity:
“I have noted from a CNN report that there are currently more than 160 cities in China that have a population of 1 million or more; for some sense of scale, Singapore’s population stands at around 5.3 million currently. To add to this, more than half the population in China (that works out to be 700 million people) now resides in cities.
These are all potential customers for ComfortDelGro to serve.”
Commodities trader Olam International Ltd (SGX: O32) is up next with its shares gaining 0.8% to S$2.56. On Monday, Olam announced that it’s expanding its partnership with Japan’s third largest instant noodles maker Sanyo Foods Co. Ltd to grow a packaged foods business in Sub-Saharan Africa.
According to terms of the deal, Sanyo Foods would buy a 25.0% stake in Olam’s Packaged Foods business for US$187.5 million. If the Packaged Foods business meets “specific performance milestones in FY2015 [financial year ending 30 June 2015]”, the total price paid by Sanyo Foods would rise to US$212.5 million. The transaction – based on a purchase price of US$187.5 million – would see Olam record a net cash inflow of US$167.5 million and is actually in line with the company’s Strategic Plan.
Olam’s Packaged Foods business appears to still have huge room for growth. The business logged annual revenue of US$350 million in FY2013, but the current market size for its products stand at US$4.4 billion and is estimated to grow “at between 6% and 12% [per annum].”
Neptune Orient Lines Ltd. (SGX: N03) rounds up the list here. The shipping outfit’s shares have gained 4.1% to S$1.02 after it revealed earlier today that it’s considering a sale or listing of its logistics business.
It was an interesting reaction by the market because Neptune Orient Lines’ logistics business has been its saving grace since 2011 at least; the price jump today makes it seem as though the market’s celebrating the potential loss of the good part of Neptune Orient Lines. Does that make sense? You be the judge.
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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.