Keppel Corp....... The Pheonix rising. Thank you, Temasek.

Making an investment usually take a lot of efforts and time to research a stock before I take the plunge. I have a long checklist that I use as benchmark to grade the company (What to buy) and to determine the right entry price (when to buy). This is to ensure the reward is always outweigh the risk I take. If you followed my blog closely, you should be very familiar with my stock pick's criteria.

Keppel Corp need no introduction, one of the biggest conglomerate listed in Singapore. Since last year, its facing multiple headwinds from bribery scandals to falling oil price. Since then, Keppel had make multiple restructuring to move away from oil rig and ship building into properties and data center business. However, the share price continue to depressed as investors doesn't like the short term volatility.

What I like about Keppel Corp:

1. Market leader - holding top position many of its key business in SG including O&G, properties and DC business.
2. Right market trend - Data Centre is the core infrastructure that enable cloud computing, AI, machine learning and industry 4.0. 
3. Good sponsor - Temasek is the biggest shareholder with 21% ownership.
4. Transformation mode - many initiatives taken by Keppel transforming its business to achieve high ROE. However, it takes time and patience to see the returns which many investors doesn't have. 
5. Crisis mode - with so much negative news surrounding this stock, the price had reached rock bottom. This is what make me even more excited to invest.        

I see this a great opportunity to buy a great company at a fire sales pricing. This is the "cigar butts investing" analogy popularized by Ben Graham. I am a big fan of his investment technique. Keppel hitting the right tune and the right price for me to take actions.

I started buying Keppel shares right before the Q3 2019 earning announcement. As usual, they announced poor results with 30% dropped in profit. Market panic with another 15cents dropped after announcements. While others running away from Keppel, I saw this as "once-in-a-lifetime" opportunity to accumulate more.

On Oct-21, Temasek announced to buy 30% of Keppel at $7.35. The last traded price for Keppel was $5.84. The deal will boost Temasek’s stake in Keppel from 20.45% to 51% and also imply a premium of approximately 26% over lasted traded price $5.84.

Last Friday closing price was $6.91 and I'm still holding on to my stock with a paper gain of 20%. I plan to hold this for longer term to enjoy the benefit of the on-going restructuring happened at Keppel. I can really see the "Phoenix is rising with second tail wind" from Temasek.

-William Cheng

Stock Investing Performance Matrix (SIP Matrix):

Stock name: Keppel Corp
Country listing: Singapore
Research periods: 6 weeks
Stock accumulation/holding periods : 3 days
Return on investment (ROI) : 20% in 5 days 
2019 Stock ROI ranking: 6th (biggest gains)