Reader says...
Hi AK,
I remembered you mentioned ST Engineering in one of the session (Evening with AK and friends) a couple of years back (2015) and shared that through one of your readers, you have a greater understanding of their business model.
At that point, you mentioned you would look at entering the market if it goes below $2.9 per share, it was hovering around $3.2.
It was my first time attending your session so my memory is pretty hazy.
But I am hoping if you can shed more insights in how you look at valuing ST Engineering?
I managed to scoop a little shares at $2.7! :)
Thanks,
YC
AK says...
Hi YC,
That was probably many moons ago. $2.7 a share is a very good price.
I would hold on to it. ST Engineering is a good income generating asset. :)
I shared how I valued ST Engineering using PE ratio before.
I said this towards the end of 2014 when ST Engineering was trading at $3.30 a share:
Best wishes,
AK
Although I continue to be invested in ST Engineering because I like the consistent and meaningful dividends, to add to my investment, I will not pay more than a 20x PE ratio.
With FY16 earnings per share (EPS) at 15.6c, that means I would not pay more than $3.12 per share.
Related post:
Mystical art of wealth accumulation.