kelly wee wrote:Hi Dennis,
You mentioned that for P/S to use on manufacturing co. How about for construction co., what are the key things to look into. Currently, I am looking at chip eng seng's FA. Cos Mr Mah Bow Tan had announced that to launch new flats every month. So I expect the construction line to be boom in the next few years.
Hi Kelly,
Chip Eng Seng is not just construction, they are also involved in property development. Constructio companies are cyclical. If you refer to the "investment game" in the seminar, by the time Construction companies perform very well, and their financial results very good, it is typically near the end of Bull market.
Since Chip Eng Seng is a blend of construction and property company, one simple way is to use Price to NAV to decide whether to buy or sell.
Chip Eng Seng's NAV S$0.3434, current price is S$0.41 or about 1.19 times of NAV, not high actually.
In year 2007, Chip Eng Seng's highest price was S$1.08.
Thus, personally, at current prices, Chip Eng Seng is still a buy, it may become a sell when Price to Book is over 1.8 times, or above 61 cents, based on current NAV of 34.34 cents.