Review: Raffles Education

Anonymous said...
"hi pehon

i'm thinking of buying REC tdy at 2.33. Do you think it is a good buy at tis price ?

UBS is calling a buy but OCBC is saying a hold becoz of risk factor in the current price"

Usually, after a large price advance, you'll also see a very volatile few days or even weeks. The large increase for Raffles Education recently was good for traders, not investors.

I've read the UBS and the OCBC reports. I personally like the UBS valuation of Raffles Education. I personally feel the OCBC report is tuned to the general market trend. The general trend of trading, not investing. The UBS report however did mention the high posibility of a sideway accumulation, but they did give enough credit to the growth potential of Raffles Education, with the recent aggressive market actions by the board of Raffles Education.

So to answer your question, its never too late to buy Raffles Education, even at the current price high. WIth the excellent profit growth record, even with a relativelity large market cap, I'll still classify Raffles Education as a "Growth" stock.

However, if you invest at the current price, you've got to expect an extremely volatile period ahead, and you must be able to hold on to the stock for at least 6 months, or even 1 year, to remove all the short term risks of a volatile share price.

For existing shareholders (like me at $1.68 vested in Jan07 =) ), Raffles Education has potential for more in terms of its share price. So hold on to it. I won't recommending taking such a small profit right now, as its game for larger returns.

Buy: Raffles Education

"What a week!!! Its like hitting the home run!"

Anyway, on a serious note, Raffles Education has traded at a high of $2.360, way past my target of $2.00.

Raffles Education has been brought to its all time high due to interest by investors for its dividend (though not much <1%>$2.00), on very low volume.

Fundamentals for the company has not changed. With 60% certainty, Raffled Education will see a small correction after it goes XD. With a very strong financial statement, which is unlikely to change in the forseeable future, its financial statement is set to see more improvements despite a relatively poor debt / assets ratio.

"Growth in Raffles Education has been impressive, and is set to continue its growth"

I recommend investors to buy after XD.

BUY Raffles Education, with a sell target of $3.00 for the long term

Buy: Raffles Education

Refering to 1Q Financial Result and Annual Report.

The Company reported a 34.1% increase in revenue 1Q06 result vs 1Q05. And from that, a 28.4% Increase in profit.

"An increase in profit has to be supported by an increase in revenue"

"A good stock must show a consistant >25% increase in quarterly profits for 2 years"

Even with the growth in businesses in Singapore and Overseas, they have been able to consistantly control their assets vs liabilities.

"A good stock must be able to control their assets vs liabilities"

With large institutional support and shareholding, although the number if issued shares exceed 3,000,000,000 shares, the number of "floating" shares is actually a small number.

"Good stock should have institutional support"

Yearly EPS has consistantly been improving from 2004 to 2006 (2.0-3.5-5.8), showing a minimum of 65% EPS Growth.

"You are buying a stock of the company, not the company. There must be an increase in EPS (earning over issued shares) vs increase in profits. There is no use of having 33% increase in profits with a negative growth in EPS (the company has recently issued a hell lot of shares)"

There are reasons to expect similiar growth over the next 1 year.

BUY now and sell target of $2.00
Vested $1.69 (11 Dec 2006)