Yesterday Merrill Lynch initiated coverage of property firm SC Global Developments with a 'buy' rating and set a price target of $9.50. (closed at $6.45, up 45cts on Oct 4, 2007)
Merrill Lynch said the stock was undervalued and could appreciate further when SC Global launches two of its residential projects in the coming six months.
I am sorry I am unable to agree with that recommendation on the simple basis that I don't think Simon Cheong will sell himself short.
Merrill Lynch said the stock was undervalued and could appreciate further when SC Global launches two of its residential projects in the coming six months.
I am sorry I am unable to agree with that recommendation on the simple basis that I don't think Simon Cheong will sell himself short.
Back in June 2007, Wheelock Properties bought and Simon sold a 10% stake in SC Global Developments at @$6 for a total value of $112.1mio.
Check out my posting on that transaction.
http://investingwithedgar.blogspot.com/2007/06/young-simon-and-old-wheelock.html
http://investingwithedgar.blogspot.com/2007/06/young-simon-and-old-wheelock.html
It was only so recently that both buyer and seller (who are veterans in the property business) valued SC Global at $6 per share. I am sure Simon knows the value of its assets and would have present-valued certain percentage of future value.
Nothing much has changed since Jun 2007. I will be glad to lay my hand on the details of Merrill Lynch's recommendation. Please pass me a copy if you have it!!!
Till then, I am with Simon's valuation.
1 comment:
Since the beginning of Oct till to date, it is reported that two directors have been selling part of their holding.
Ms Elizabeth Sam sold 30,000 shares from her holdings of 204,067 shares.
Mr Ho Wah Onn sold 170,000 shares from his holdings of 358,133 shares.
Do these actions indicate some over-valuation in SC Global's share price?
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