Venture Corp is the only blue-chip tech company listed in Singapore Exchange that is part of the Straits Times Index (STI) constituents. It’s a S$5.5billion market cap stock with dividend yield of 4%. Its business is a cash-generating machine, having grew its Free Cashflow (FCF) 20% p.a. and its cash holdings at 9.3% p.a. since 2011. It’s Price/FCF multiple is trading near to its lowest level over the past 10 years.
The stock caught our attention as we noticed that company is buying back its shares the past one month. With the tailwind of pent-up demand in semicon chip, Venture may benefit in near future as global chip manufacturers work to build up the supply capability to meet the demand. Interested investors can add Venture to their watchlist to monitor if management continues to buy-back shares and most importantly during reporting period, does its revenue, profit and free cashflow continue to improve.
On a short-term basis, I will look out for the resistance of S$19.40. If price breaks out above this level and with high volume, it may garner enough momentum to head higher. Next resistance after this is at $21. Support level at $18. UOB Kay Hian had issued a Buy recommendation on 3 May with 12-month target price of S$23.47.
As usual, this writeup was broadcast to Clients on 29 Jun 2021 but posted here only on 4 Jul 2021.
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This is an opinion piece. Please always do your own due diligence on the company's fundamentals & assess if the Fundamental / Technical analysis opinions are applicable to your trading/investing needs.
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