SATS – Lim and Tan
Noteworthy Share Transaction
• The airline catering / ground handling company, made its first buy-back of its own shares, buying 300,000 shares yesterday at $2.56 each.
• The stock has been under much pressure, dropping from $2.96 on Jan 19th to the $2.53 low two Fridays ago.
• The surge in crude oil, the disasters in Japan have all taken a toll on the airline related sector.
• We would upgrade the stock from Neutral to BUY.
(We have all along preferred SIA Engineering, a former sister company within the SIA Group.)
• Based on the 13 cents dividend paid in respect of ye Mar 2010, yield is 5.1%. Net profit rose 4% in the 9 months to Dec ’10, putting stock on 15x trailing PE.