ST Engineering is the first major blue chip stock that I managed to venture into after building up some capital. After its share price slide down by approximately 10% or so, I decided to grab this opportunity to purchase 2 lots of this strong conglomerate for possible capital appreciation and strong dividend returns.
However, it seems like there were more sellers than buyers for this conglomerate during that time, as even when fundamentals of the company remained intact, and its operating cashflow remained healthy, its share price continued to decline under pressure. The decline was gradual, but consistent, making the share price down by another 15% thereabouts over the next 8 months. This made me very disturbed, as despite the intact fundamentals, this is not reflected in the movement of its share price.
Noting this, I decided to put aside my fears of possible further decline in share price and increase my holdings in ST Engineering, which was a great opportunity for me to average down my average purchase price, as well as increase my exposure to this strong conglomerate at a discounted price to its actual value.
Indeed my beliefs paid off as soon after, a price reversal set in, allowing me to sell of the extra lots that I have at hand to further lower my average price of the 2 lots at hand which I intend to hold for long term.
Consistent and continual contract wins by ST Engineering continued to boost its share price, which did not look back thereafter. As the share price crossed $3.60 with a reasonably high volume in November 2012, which was a historical high, I decided to add on my positions again to tap in the possible new high. It did not take long for the share price to move higher to $3.88. Initially I hope that it could move beyond $3.90. However after 2 failed attempts to close above $3.88, I decided to sell and realise my 17% profits the third time it reaches $3.88.
My thoughts at that time: The share price of ST Engineering has tried to break through $3.88 twice previously, but failed. When it tested the same level the third time, I decided to just lock in and realise my profits, since my initial target has long been reached and surpassed.
Lessons learnt: Dips in share price of strong conglomerates are great opportunities of invesments, as when fundamentals remain intact for such big companies, it is just a matter of time when price reversal sets in to begin its upward trend.
Consistent and continual contract wins by ST Engineering continued to boost its share price, which did not look back thereafter. As the share price crossed $3.60 with a reasonably high volume in November 2012, which was a historical high, I decided to add on my positions again to tap in the possible new high. It did not take long for the share price to move higher to $3.88. Initially I hope that it could move beyond $3.90. However after 2 failed attempts to close above $3.88, I decided to sell and realise my 17% profits the third time it reaches $3.88.
My thoughts at that time: The share price of ST Engineering has tried to break through $3.88 twice previously, but failed. When it tested the same level the third time, I decided to just lock in and realise my profits, since my initial target has long been reached and surpassed.
Lessons learnt: Dips in share price of strong conglomerates are great opportunities of invesments, as when fundamentals remain intact for such big companies, it is just a matter of time when price reversal sets in to begin its upward trend.
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