Sembcorp industries

I had some monies to invest after saving up abit. Had been looking for cheap bargains stocks to buy.

Some of the stocks that i considered buying were:
Boustead
Raffle medical
Starhub
And even comtemplating to buy index funds.

Those were the stocks that i was looking at before i chanced upon sembcorp industries.

This stock has main businesses dealing in utilities and oil and gas. While the O&G segment is still in the doldrums, I was more interested in the utilities business.

First, it is recession proof. 2nd, sembcrop industries had been moving into india (2nd most populus country after china). Earnings are stable. Dividend payout is low around 2.45% assuming it paya out 8cents and based on my entry price of 3.26.

In the end i decided to buy SI on 19/2. The recent feb market price drop caused it to dropped from 3.57ish to 3.22ish. A drop of 10% which make this quite irresistable.

Similar to Keppel corp which relies on it property business arm to prop up the share price, I believe the utilities arm of SI could similarly do so for SI.

The lowest price that SI had gone was 1.83 in 2008. The highest it went was close to 5.75ish. The potential downside is 1.43 and potential upside is 3.50. Although it is not possible to know the direction that stock prices are heading in the future, I could still tolerate such downside risks.