SATS share price crashed to 5-year low

Is it the end of the road for SATS share price? The aviation ground handling service provider is severely hit as the COVID-19 pandemic causes the entire air travel to come to a grinding halt. As a result, SATS share price plunged to a 5-year low.

SATS share price

SATS flying high in 2016

My last coverage on this counter was in 2017. That was when SATS share price was flying high and was trading at the $5.00 bandwidth. In those days, it certainly seemed that the sky was the limit for SATS share price. Nobody could have predicted that all it takes is a pandemic to cause SATS share price to fall down to earth.

SATS share price

While everyone knows that the entire aviation industry is hit by the black swan event, what caught me by surprise is the resilience of SATS share price. At $3.17, SATS share price is at a 5-year low. Contrast this with share price of Singapore Airlines, which spiralled out of control to reach a record low. In this regard, is SATS share price at the right place and right time for investors to enter?

In all honesty, it is too premature to claim that aviation industry will recover in the coming months. While Singapore is gradually opening up its borders with “fast lane” to allow for essential business or official trips to China, it will take some time for public confidence to return for leisure travels. Thus, it is too early to state that SATS share is out of the woods and ready to bounce. However, there are signs that SATS share price may have bottomed.

I have always maintained that you stand a higher chance of making money in the stock market at the point of buying, and not at the point of selling. It is better to invest in companies with strong fundamentals during crisis times because the valuations would have come down. Buying into companies with strong investment moats during crisis always means that there is a larger margin of safety. In this article, I will share my view on whether the current trading level of SATS share price represents a value buy or a value trap.

Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in SATS before. Whether SATS share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.

SATS share price to sink or swim?

Shareholders are waiting fervently over the release of the full-year financial result for FY2020. SGX RegCo states that companies with financial year-end of 31 March 2020 would automatically be granted an extension of time to release their full year unaudited results by 30 July 2020. Will SATS share price bomb out upon the release of the full-year financial result?

The timing of the release of the full-year financial result for FY2020 is important as it will affect market sentiments of SATS share price. But in my opinion, SATS should [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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Updated: June 7, 2020 — 10:38 pm

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