Saturday, 22 June 2019
Singapore Dividends for Financial Freedom - Will Starhub and Singpost ever recover?
Years ago I bought into Starhub and Singpost with a buy to hold strategy believing they would be good counters to rely on come rain or shine.
Now I know I was wrong.
Presently, Star hub is down almost 58% and Singpost 35%. Luckily, I took relatively small positions in these companies at the time, so the damage isn't too bad, but still their presence in my portfolio does give me cause for concern.
Sure, I should have had a stop loss on the counters, but this is easy to say in hindsight. There are massive black clouds hanging over both companies and more unease brooding on the horizon, so what's a man to do? Sell and take the hit or hang on with crossed fingers and see if they can turn things around?
I've been deliberating this for months now and still I'm undecided. One moment, I'm ready to hit the sell button and then a voice tells me never to sell on emotion. However, the longer I think about the situation and the future, the less I feel emotion is the causal factor. The fact is that both companies are in the shit.
Starhub's price has taken a nosedive and to prevent an outright investor stampede they have hiked up their dividend to unsustainable levels. We all know what's going to happen when they have to cut this dividend. So, is there any way for the company to Houdini their way out of this hole? With the new (albeit smaller than previously expected) 4th telco joining the party how are Starhub going to reverse the trend?
The same applies to Singpost. They are in a tight spot, but are at least trying to diversify, but will it be enough?
Let me know your thoughts people.
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