Singapore Technologies Engineering Ltd Leads the Market Lower this Week

For the week ended 29 May 2015, the Straits Times Index (SGX: ^STI) declined 1.7% to close at 3,392 points. Out of the 30 index components, 21 were in the red, seven were in the green while three finished the week flat.

Home-grown conglomerate, Singapore Technologies Engineering Ltd (SGX: S63), fell 5.6% to S$3.40.

Around the middle of the month, ST Engineering released its first-quarter results. Revenue for the latest quarter fell 3% year-on-year to S$1.51b, while net profit slumped 5% to S$130m.

Tan Pheng Hock, ST Engineering’s President and Chief Executive Officer said that the difficulties faced by its US shipbuilding operations put a dent on the overall performance of the company. It expects the revenue and profit before tax for the current financial year to be comparable to that of financial year ended 31 December 2014 (FY 2014).

ST Engineering is now trading at a historical price-to-earnings ratio of around 20.

At the other end of the spectrum, shares of transport giant, Comfortdelgro Corporation Ltd (SGX: C52), put on 2.3% to S$3.06.

On the same day as ST Engineering’s announcement, Comfortdelgro delivered  its first-quarter earnings too.

The top line grew by 1.3% year-on-year to S$963.5 million. All its business divisions saw growth except its Automotive Engineering Services business, the Bus Station business and the Driving Centre business.

Moving down the financial statement, net profit went up 6.8% to S$67.6 million.

Elsewhere, Raffles Medical Group Ltd. (SGX: R01), the largest private group practice in Singapore, saw its shares shoot up 4.2% to S$4.50. This made RMG one of the best performers in the mid-cap sector. It is now trading at 38 times historical earnings.

As my Foolish colleague, Ser Jing, noted here, the medical outfit’s business is fundamentally very strong. It has been generating copious amounts of free cash flow with very little debt to boot. This has allowed it to increase its dividends annually.

It still has growth left in the form of expansion of its flagship hospital in Bugis, development of a medical-cum-retail centre in Holland Village and expansion of its business in China. This could mean that dividends at the firm might continue to increase down the road.

The SPDR STI ETF (SGX: ES3), a proxy for the Straits Times Index, is now valued at 13.8 times historical earnings and has a dividend yield of 2.7%.

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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 contributor Sudhan P doesn’t own shares in any companies mentioned.