Wednesday, February 15, 2017


I recently divested my investment in SAT at a price of $5.25/shr. Not that I think SAT is a  company that do not deserved holding on but it is more a case of valuation. The recent quarter and YTD 9 month earning are 5.8 cents/shr and 17.2 cents/shr corresponding. At a price of $5.25, this give a PE of about 22 if you take the anualized earnings. Although SAT has low or virtually no debt (debt/equity = 0.07) ,  is in a business area where entry of new competitors is not so easy and there may be potential growth oppotunities, I think the valuation has outrun the fundamentals of the company.

This in part I think is due to the inclusion of SAT into the STI last year.ETF funds who track the STI will automatically trigger buy into SAT leading to its higher valuation vis-a-vis earnings.

As such,  I decided to let go of my holdings at $5.25 but if a buying opportunity come up later, I will definitely consider again.

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