To help investors make better portfolio allocation, DBS regularly publishes its model portfolio. The model portfolio consists of a basket of shares that DBS thinks are worth investing in. In this article, we are going to highlight three of them that DBS thinks are worthy to be in every investor’s portfolio.
Investors Takeaway: 3 Stocks Worthy To Be In Every Investor’s Portfolio
- Genting Singapore
Genting Singapore’s (Genting) share price has recovered marginally since its 1Q18 results following the ease of concerns over margin pressure. Moving forward, DBS foresees significant potential for Genting to rally strongly.
Despite the recent turnaround in profitability, some investors remain sceptical over the sustainability of Genting’s earnings recovery. DBS thinks that the scepticism is unfounded and is confident that Genting will be able to continue to sustain growth in profitability over the next 2-3 years. This will help Genting to trade closer to its average EV/EBITDA multiple of 12 times.
Besides growing earnings, Genting is currently valued at an attractive price for an integrated resort (IR) that is operating in a duopoly market in Singapore. Moreover, there is also heightened interest of Genting potentially winning a bid to develop an IR in Japan over the next 1-2 years. As such, DBS feels that Genting deserves to trade at its average EV/EBITDA multiple given the multitude of positive factors.
BUY, TP $1.55; Current share price $0.925
- Venture Corp
Manufacturing companies have fallen from its peak on the back of macro uncertainties in the global economy. Venture Corp is one of them that was affected by the negative sentiment surrounding manufacturing companies. However, DBS believes that Venture Corp’s unique offerings, know-how and hard-to-replicate ecosystems will help it to sustain its growth.
Venture Corp managed to deliver a strong set of results in 2Q18. Its earnings jumped 40.2 percent year-on-year, thanks to margin expansion. Underpinned by secular growth drivers and Venture Corp’s commitment towards operational excellence, DBS is confident that Venture Corp’s long-term growth outlook remains positive. In addition, Venture Corp recently announced a maiden interim dividend of $0.20, which should help to boost investor confidence.
BUY, TP $22.90; Current share price $16.16
- Mapletree Logistics Trust
After its recent announcement to acquire a portfolio of modern logistics properties in Singapore, DBS thinks that Mapletree Logistics Trust’s growth prospect is looking good. DBS has given Mapletree Logistics Trust a higher recommendation than the other brokerage houses. This is because Mapletree Logistics Trust has improved its fundamentals post-acquisition, which DBS thinks deserves greater recognition from the market.
DBS highlights that Mapletree Logistics Trust possesses the potential to surprise on the upside organically and through more acquisitions. DBS thinks that this is an undervalued factor that the market hasn’t priced in yet. Furthermore, through its focus in key markets of Hong Kong, Singapore, Japan and Australia, Mapletree Logistics Trust has improved on its income visibility and income growth compared to the past.
With a stronger balance sheet post-recapitalisation, improving organic growth outlook and a myriad of acquisitions, the REIT’s improved earnings prospect is expected to translate into higher valuations for Mapletree Logistics Trust unitholders going forward.
BUY, TP $1.50; Current share price $1.23