Posted on December 17, 2009 - by Alvin

SMRT – Fundamental Analysis

This is the first time I am trying to apply Fundamental Analysis on a stock. I am using Adam Khoo’s method, which has 8 criteria for screening for a Value stock. He covered the method in both his books, “Profit From the Panic” and “Secrets of Millionaire Investors“.

Criteria 1: History of Consistent Earnings and Cash Flow Growth

Here is the chart of the Net Income (Profits after Tax) of SMRT over the years. It shows a consistent growth in earnings.

Criteria 2: Durable Competitive Advantage

SMRT is a major transport service operator in Singapore. Operating the Mass Rapid Transit system except the Northeast Line. Her main competitor is Comfort DelGro. New competitors will have big resistance entering into the rail service as the railway tracks, tunnels and stations are expensive to replicate. This will give SMRT an undeterred edge and continue to prosper through her daily operations. Read more…

Related posts:

1. The Good and Bad of Fundamental and Technical Analysis
2. Fundamental Analysis: The Income Statement
3. Fundamental Analysis: Balance Sheet