In this article, we will feature three stocks in different sectors that investors should look out for in the upcoming results season. The stocks are in from different sectors, giving investors opportunities to ride on varying sectoral growth.
In the past few earnings season, Genting Singapore has shown that it is recovering well with lower bad debts and stabilising earnings. Despite the increase in target price along with the bullish sentiments from consensus, Genting Singapore is still trading below its average EV/EBITDA multiple of 12 times.
This is largely due to investors being sceptical about the sustainability of Genting Singapore’s earnings recovery. On the back of a selective credit extension to its VIP customers, it will address the scepticism and raise its earnings.
Analysts from DBS Research are bullish on Genting Singapore given the continued recovery in earnings, details of a more efficient capital structure and refresh of Resort World Sentosa. In addition, a potential catalyst will be winning the bid for a Japanese casino which has not been priced in. They reiterated their “Buy” call for Genting Singapore with a target price of $1.49. Currently, Genting Singapore is trading at $1.13.
Being one of the first company to landbank in the current en-bloc fever, Roxy-Pacific (Roxy) Holdings is a direct proxy for the recovering property market in Singapore. As a mid-cap property developer, Roxy is frequently “overlooked” among giants. Currently, they have six freehold residential developments that are ready to be launched in 2018. This will be the right moment to capture the buyers that have sold their apartments through the current en-bloc fever.
In FY2017, profit fell 41 percent due to lower contributions from property development and investment properties which they had divested. In FY18, the management is upbeat on its profit in anticipation of stronger property sales, contributions from newly acquired investment properties and a recovery in Singapore’s hospitality sector.
Analysts from DBS Research reiterated their “Buy” call on Roxy with a target price of $0.69. Roxy is currently trading at $0.56.
With the recovery of oil prices, offshore oil and gas sector is expected to remain in recovery mode. As one of the world’s largest offshore oil rig builder, Sembcorp Marine is one of the key proxy for the recovering offshore oil and gas sector. Importantly, the management has worked out the key concerns of investors and are in the progress of solving them.
This includes the landmark deal to sell nine jack-up rigs to Borr Drilling and disposing of West Rigel, a harsh environment semisubmersible rig. In addition, there is progress in the restructuring of Sete Brasil and they have struck a rig deal with Petrobras. Sembcorp Marine is well positioned to deliver 2 rigs each that are in the advance stage of construction out of Sete Brasil’s existing 13 orders which is worth approximately at $1 billion each.
In the next 12 months, investors should use the growth of Sembcorp Marine’s order book as the key indicator for its recovery. Potentially, they will include four orders from multiple companies and total to $3 billion worth of orders.
Analysts from DBS Research reiterated their “Buy” call for Sembcorp Marine with a target price of $2.90. In addition, valuations are in favour of Sembcorp Marine after a massive write-down in FY2015 with a $609 million provisions, which could see some write back. Sembcorp Marine is trading at $2.21.