Dear Friends,
Today (3 May) we face a cruel reminder of not to hold a stock through earnings. In the past, I have advised short term traders to liquidate all positions before earnings. This is especially so for Genting today. After powering forward for the last few days from $1.40 to $1.64 highest yesterday, today it gaps down to close at $1.485 after a poor poor earnings results.
This is the power of earnings. It has the ability of causing a stock to lose 10% of its value in a single day. After 10 years of trading in the US market, I have a phobia of holding a stock through earnings as it seems too unpredictable whether a stock will gap up or down. It is like holding a time bomb to me.
I would encourage all short term investors to adopt the habit of liquidating your positions going into earnings. However, if you are a long term investor, a 10% drop is still ok, as it may still come back and may even be a good opportunity to add on position if you think it is worth it. It is important to know your trading style.
Rgds
Daniel
www.danielloh.com
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Actually......luck factor...... means VIP will more likely to gamble at RWS..... so their business are more substainable compare to MBS....
FEAR NOT. UNLIKELY TO FALL BELOW 1.40 EX-DIV THIS WK.
AS INVESTORS MEMORY IS USUALLY VERY 'SHORT' AND 'FORGIVING', IT MAY MOVE UP FM 1.40 DEPENDING ON STI. FEAR NOT.
Tomique ( Date: 06-May-2013 15:20) Posted:
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It is obviously going down one straight line, no second consideration unless there are some good news that could come up to boost the confidence of future yields and returns. I am not sure if there are anything waiting announcements.
Tomique ( Date: 06-May-2013 14:46) Posted:
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GSp likely trying to go to $1.40 or below as many players are disposing their shares at the frustration of seeing lower profits. Good time to sell first and buy back later ard say $1.35?
Macquarie Equities Research bullish on Genting Singapore
Genting’s results and share price performance spurred many research houses to release reports on the stock, Macquarie Equities Research (MER) was one of them. In a report released on Friday evening, MER said that delving into the details will show that Genting Singapore actually saw a blowout quarter, which was negatively impacted by a low hold rate – a luck based issue (non operational). Adjusting for hold, EBITDA (earnings before interest, tax, depreciation and amortisation) would have been $400mn.
MER reiterated its Outperform view on Genting Singapore for the below reasons:
Genting Singapore is a relatively less-loved Asian gaming name as it fits in a valuation abyss. Neither is it a yield play nor is it a growth play (as Singapore gaming has matured very quickly). In fact, MER’s analysis shows that at the current share price, the market is implying a 3% long-term growth rate…which gives you a sense for how negative the market is on the stock – i.e. assuming that GENS can generate almost no incremental growth from the excess cash. The question is: “What’s going to take Genting Singapore out of this valuation abyss?”
- Japan. The market presently assumes that GENS has nowhere to invest its free cashflow and given the company is unlikely to pay a dividend means that it may get used in a return destructive manner. However, MER’s Japan Gaming Analyst believes that gaming legislation in Japan could get approved by late 2013. Genting Singapore also believes that there is a 70% chance of it getting approved. If this were to happen, the market’s expectation of growth
from Genting Singapore would change dramatically.
- Genting Singapore’s first quarter results was let down by non-operational factors, i.e. a lower hold rate in VIP. This depressed the topline and the EBITDA performance. Adjusting for the hold rate issue, performance was very strong. VIP turnover hit a record +38% year-on-year. The mass market business also showed mid-single digit growth which is a good performance. There is also upside in 2H13 as Genting Singapore starts to rationalise costs at Marine Life Park and drive efficiencies. Management did provide weak guidance on VIP which we do see as an issue. However, because casino operators in Singapore manage their own credit books – tightening credit for VIPs doesn’t result in lost revenue, just deferred revenues, which will return.
MER thus reiterates its Outperfom 12-month target price of $1.85 assuming a 5% long-term growth rate. MER believes that the major catalyst to lift the target price will be Japan gaming as it will show the market that Genting Singapore has a better way to deploy its free cash than is appreciated.
Source: Macquarie Research - 06 May 2013
A cruel reminder not to hold a stock through Earnings - Genting
In Aug last year when Mabel Lee, President of high stake gaming division was asked to leave as required by the relevant authority, I made several postings that RWS high-stake gaming revenue would suffer and I was being chided by many here.
If any of you here is into casino high-stake gaming, please go and ask any high-roller you know their preference to play in RWS or MBS.
The latest I can tell you is that the VIP and VVIP parking lots at RWS are always empty while those at MBS are always filled up.
Today, about 30% of the volume done was borrowed and shorted. Just wonder how many has it been covered today. Can predict that the share price will swing up & down very quickly due to these large amount of short term players. So no need to hurry to sell at low or buy at high.
Either way might be bad news. 1 lotter up wanna dump his holdings. 1 lotter down might be shooter hoping to buy back cheap lol
Tomique ( Date: 03-May-2013 16:57) Posted:
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Bill Lehane
The fabrication group said net profits were offset by a 64% drop in associate contributions from Cosco Shipyard Group to $4.2 million, as well as the absence of a year-ago benefit from interest income on deferred payment to customers.
The contractor raised revenues 11% over the three-month period to $1.1 billion, which it put down to higher revenue recognition in the rig building segment.
Sembmarine booked $1.7 billion in rig orders and offshore platform contracts since the start of the year to take its order book to $13.6 billion.
The contractor said overall outlook was “healthy”, while warning that “competition is intense and impacts margins”.
It said it expects strong demand for rig building, especially high-spec units in an era of increased focus on safety.
03 May 2013 10:19 GMT
Singapore’s Sembcorp Marine has lifted net profits by 5% year-on-year to $119 million in the first quarter as boosted margins in rig building and ship repair added to the bottom line.
The fabrication group said net profits were offset by a 64% drop in associate contributions from Cosco Shipyard Group to $4.2 million, as well as the absence of a year-ago benefit from interest income on deferred payment to customers.
The contractor raised revenues 11% over the three-month period to $1.1 billion, which it put down to higher revenue recognition in the rig building segment.
Sembmarine booked $1.7 billion in rig orders and offshore platform contracts since the start of the year to take its order book to $13.6 billion.
The contractor said overall outlook was “healthy”, while warning that “competition is intense and impacts margins”.
It said it expects strong demand for rig building, especially high-spec units in an era of increased focus on safety.
2 gangs of 1 lotter fighting one another. One always sell to bid and one buy from ask queue.
wanglausern ( Date: 03-May-2013 16:49) Posted:
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since it shown that it was more lucky to play in RWS, why should they still want to play in MBS.... just think the other way. >
It's not bad luck. Most of the high rollers prefer to gamble at MBS.
krisluke ( Date: 03-May-2013 08:48) Posted:
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This Q1 results reported only 0.96 cent EPS, That is less than one cent, but their dividends declared was 1 cent per share. It looks like deficit, but if next 3 quarters are better results, then I won't doubt its ability to pay future dividends. Only if the next 3 quarters are bad, then sure no more dividends, I think.
belgeran ( Date: 03-May-2013 16:32) Posted:
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why not.. they declare dividends before results.. but they know results before it is announced so it is already taken into account..... dividends declared sure will give one.. just whether future will have higher or lower or no dividends...
Tomique ( Date: 03-May-2013 16:28) Posted:
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Now that they have made lesser amount of money, will they still pay the dividends to shareholders?
belgeran ( Date: 03-May-2013 16:12) Posted:
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see next week price action then decide lo.. now buy is buying falling knife..... wait for knife to find the floor first ba...
People will still gamble to provide income for Genting Sp. and various casinos worldwide. It was said they intended to open casino in Japan. If this is true, then it is the best time for Japanese investors to buy now when the price is coming down, right?
belgeran ( Date: 03-May-2013 16:05) Posted:
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still making... just making less... lesser than MBS.. lesser than last year as well..
and analyst predict the year going forward will be volatile due to china.....
but with hot money printing in jpy, europe and us... i doubt there will be issues with money flowing in.....
So the company is still making money? Not losing?
doufei ( Date: 03-May-2013 15:57) Posted:
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