Hindsight

Singpost - Hindsight
6 months ago, I had seriously delibrated on buying singpost as it is undervalued then. 6 months later, I am glad that I held off the purchase.

Although it has certain moats that made it an attractive value buy at that point of time, what is undervalued can go even lower. Singpost does not enjoy an impressive profit margin from its traditional lines of business,  and is doomed in a sunset industry, rapidly overtaken by emails and electronics forms of communication.
It is relatively leveraged compared to the revenue it can deliver, and is drawing down on its capital expenditure on capital expenditure into its e commerce system.

This company enjoys an enduring business merely because of its monopoly position as a core postal service whereby legal and official documents still need to be delivered in a physical form. Other than that, it's operating and financial performance is not stellar. I was merely lucky that I had the discipline to hold off the purchase, as I do not want to buy a fair company at an undervalued price. Moreover, with the leaving of key executives prior to the next quarterly results and and uncertainty of successful transition to e-commerce via acquisitions, that should have raised alarm bells. To be frank, it is more luck than skill that I didn't buy into it, and the crisis will persist probably for a year or two, while they are still sorting out their internal issues.

Moving forward, that brings me to another stock that I wish to visit. Singapore exchange enjoys the same position as an monopoly in the Singapore investment market. I had not done any review on its business outlook. However, there are signs of complaints regarding the cost of compliance and financial reporting, which is driving companies to delist from Singapore (Popular) , choosing to list at other stock exchanges, (Osim) , or general stale market leading to investors choosing to hold foreign rather than local securities. (Undervalued Apple sounding more sexy than Undervalued Challenger).

After my decision to stop my dollar cost averaging of Ocbc, I might consider a dca or bulk purchase of sgx / watchlist shares after the next quarterly announements. Until then, it's best to look around but don't commit. If the stock is that great, a few more weeks won't hurt.

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