Saturday, September 14, 2013

Jardine Cycle & Carriage - Is valuations getting attractive?

Jardine Cycle & Carriage is one of the leading bluechip Singapore listed company and a member of the Jardine Matheson Group. It has an interest of over 50% in Astra, a premier listed Indonesian conglomerate, as well as other motor interests in SEA.




This is a company which has yields over ROE > 20% in the past 5 years and a nice dividend yield of about 3.9% at current price. EPS for FY2012 has dropped about 4.2% from previous year because of weakening Rupiah while forward EPS are expected to drop further by 8% in FY2013 (again because of weakening Rupiah). The question remains on whether valuation is attractive now as price has fallen from the 52 week high of $56.00 to a recent 52 week low of $31.50. As Rupiah continues to weaken, price could falls further and this could be a good grab at below $30.00. The statistics are also pointing in favor of Jardine as they are currently below at least 1 SD below their historical averages mean.






I have not taken a hard close look at their businesses and cashflow but first impression it does look one to watch for. Unfortunately, the price seem to be beyond my reach at the moment (imagine having to fork out $30K for 1 lot). If SGX can come out with reducing lots rule sooner, I may just consider this to my portfolio.

3 comments:

  1. why not analyse more from the segmental perspective over 10 years. will tell alot about whether thigns are peaking.

    ReplyDelete
    Replies
    1. Hi Drizzt

      Thanks for the suggestion.

      I will try to analyse the business in terms of its segmental portion and how much does the weakening rupiah could come into play to affect jardine eps in the 2nd part of the edition.

      Unfortunately i can only analyse the quantitative part of the business and we may need someone like you to comment on the qualitative part such as the industry analysis as a whole.

      Delete
  2. im also not that good. but here is something. instead of looking at 52 week low, why not have a yard stick. what is the PE around 2007 and 2002 low. how low did it reach. perhaps that will be a good gauge

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