Raffles Medical Group (SGX: BSL), or RMG, and Lululemon Athletica (NASDAQ: LULU) have both seen their prices tumble over 20% in the last year. Interestingly, they now trade at similar PE ratios: RMG at 20x and Lululemon at 23x.
However, I recently sold my RMG shares and bought Lululemon instead. Did I make a bad move? Did I just jump out of a frying pan into the fire?
Buying Lululemon
While I don’t own any Lululemon products, many love their trendy and innovative apparel, as reflected in their growing revenue and profits. However, the stock price was historically too expensive for me.
Their recent guidance for slower growth caused a nearly 40% price drop since their 4Q 2023 earnings report. While the 1Q 2024 results exceeded expectations, it confirmed the anticipated slowdown.
Assuming their new growth trajectory falls within a range of 11-14%, I believe their current price presents a good entry point to own a piece of this well-performing business. Moreover, if management addresses the foreseen issues and achieves a higher growth rate, this could be a significant gain.
Selling RMG to buy Lululemon
With limited capital in my investment portfolio, I needed to raise funds to buy Lululemon. Since I became less optimistic about RMG’s growth prospects after their last results, I decided to sell my remaining shares.
Given they only report results twice a year, there’s no recent data on their performance. While I could have waited for their first-half results at the month’s end, the opportunity in Lululemon was too attractive.
This RMG investment has underperformed, resulting in a loss of $7.7k over eight years. Only time will tell if my decision to switch was the right one.
Selling odd lots on FSMOne: My Experience
I’d like to share my recent experience selling odd lots on FSMOne. While the online chat function was temporarily unavailable due to high volume, I was able to get through to the hotline after listening to the recorded message three times. The wait time itself was less than two minutes.
After verifying my information, the customer service representative connected me to a dealer who promptly executed both trades – one for the full lot and another for the odd lot sale. There were no additional fees, and I was fortunate to receive the same selling price on the odd lot market.
Overall, I’m pleased with the process and FSMOne will continue to be my go-to platform for executing trades.
Join Me in Supporting A Very Special Celebration!
Click here if you would like to support my effort in raising fund for Autism Resource Centre (Singapore). Read my previous post for more information and context of this fundraising event.
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