My preliminary draft did not conclude this purchase as another Big Idea. But after completing the draft, I decided that this investment is a large Idea. I’ll not be hiding the identity for this company because, at this point in time, I will have uncovered the business name on my Facebook Post already. Big Idea 9 became the talk of the town after the cooling measures were announced by the authorities, and within the same period, a bigger rival got listed.
This was evidenced from my research as well. There have been so many articles written by analyst and bloggers (Thelittlesnowball, Motley Fool, Heartland Boy, PropertyinvestSG) that it was difficult to find concealed information that could possibility sway me to the “other” side. Do note that this investment is very new and resulted in my stock portfolio increasing to 16 companies. I am NOT going for a step in my loan consolidation of my profile back.
I have been taking a look at Big Idea 9 for many weeks before I made a decision to invest in it. The recent talk about price drop greater than 50% from its top has make it too appealing not to continue steadily to say “No”. To essentially understand the history of Big Idea 9, you must understand its history. At that price, it was an 80% gain for Northstar Group.
However, this is the purchase price 4 years back. For a Private equity firm that continues to possess 72% of Big Idea 9, The wait around is believed by me must be profitable. 0.443. In fact I believe this is too low for the private equity firms still. Nevertheless, this minimum share price is approximately 35% below the existing share price, which in my opinion is not a huge buffer and Northstar Group will most probably not let it continue steadily to slide further.
New cooling measures are announced on 6 Jul 2018. From Apr to June However the 2nd One fourth Results will be. Thus, the 2nd Quarter results that’ll be announced almost certainly in August 2018 should not reflect the sudden drop in property purchases due to cooling measures. Furthermore, Big Idea 9’s Q1 results has been great and it should flow into its Q2 results.
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This is similarly indicated in its latest annual statement, which states that “To day, Big Idea 9 has guaranteed more than 20 tasks to be launched in 2018 already, with an increase of than 11,000 home units available for purchase. This is bought up by SG TTI on IN under Kenny Chia’s Post.
I imagine it trapped a chord in me and it made me re-wire my thoughts. From my research on the Singhaiyi post, you just need to look at the amount of Enblocs completed/announced because the end of 2017 till June 2018! The year Consider the number of developments that will be continued to announced throughout, as well as the projects already secured by the company as stated in the point above. Although one can argue developers can always delay the announcing of the projects, but they shall be required to sell all of the units within 7 many years of completion. They have to make sure that these developments have to be SOLD some way.
During the not-so-long-ago initial cooling measures, if you then got invested in programmers, you shall have realised the actions programmers take to “escape” such actions were never beautiful. Furthermore, as expressed in the RHB analyst report, “For just one, developers have started countering the measures with “more realistic” pricing and the offers of discounts of 5-10 percent in new launches, RHB said, adding which should draw more first-time buyers.
Developers were also offering higher agency commissions of 3-4 percent at some launches, weighed against the typical 1.5 percent, it said. It also mentioned that around 200 more products were sold last week at new launches, despite the measures. This is one of the reason why that led to me having too little self-confidence in its long term financials. However, after writing down my thoughts, it actually provided me more self-confidence of the company’s long term financials. Do note that additional chilling methods shall have impact on almost certainly in Q4 2018 and Q1 2019 financials, but at the current price, this impact should be “simple” for the EXPERIENCED LONG TERM HOLDING INVESTORS.