I have been holding Comfort Delgro for the longest time since the GFC. After the price crashed in 2022 and 2023, I have been accumulating more since I find it easier to buy good shares when their price is below my original buying price. This is sunk cost fallacy at work, and I freely admit that I'm susceptible to it. 😊
When it comes to reasons to buy Comfort Delgro, there seemed to be quite a few. The EPS crash during COVID was terrible but there was nothing preventing it from recovering to pre-COVID levels, in which case CDG would be seriously undervalued. The company generates steady cashflow in an industry where the Capex is not too high (compared to say Telcos). The barriers to entry come from the regulatory environment where the company has to bid for contracts to operate transport routes. Grab/Uber was no doubt a disruptor but the threat is receding as there is only so much cash Grab can burn before investors start insisting that they make a profit.
As you can see from the chart, there was a major crash in June 2023 where I think the price touched $1.00 briefly. So in June 2024, the 1 year performance of C52 will shoot up to the 40%++ region. Which is an illustration of how to 'cherry-pick' time periods to present a more favourable return.
Next recovery I am waiting for is Singtel. The rumours that they are planning to sell Optus have pushed up the price in recent weeks.
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