Hyflux

Alamak was writing my post halfway,  and didn't save a draft. Now had to restart again.

Oh well...

Recently Hyflux made the headline as they found a Savior who could inject funds to save the ailing company.

I thought to myself,  as I read the news. What could have caused a once starling blue chip company with a enviable business,  to fall from grace to it's current state.

how could we learnt something from this and Noble group? Although I did not buy either Hyflux nor Noble group,  I thought how could I prevent myself from buying such companies.

I went through my checklist to see if my checklist would be able to help me.

The fall that caused hylfux to be in this mess,  was the fact that the company had took on too much debt. Whereas Noble overstated it's assets.

One common signal is that both companies did not generate positive cash flow consistently. And even though there were profits,  the profits did not translate into positive operating cash flow over the years.

I went to relook at keppel and sembcorp industries that I bought. Although both companies are not in great shape,  it's operating cash flow is still positive. And it had enough cash on hand to handle loans that are due in one year.