To The Moon

🌟🌟🌟In the current volatile markets, I believe that DBS $DBS Group Holdings(D05.SI)$  is a great defensive stock to buy and hold especially when it drops  below SGD 40.

In the aftermath of Donald Trump's sweeping tariffs, DBS dropped to a 52 week low of SGD 32.28 in early April amid fears that this could cause a global recession.  Slower growth expectations could pose a major challenge for DBS and other local banks as they may dampen new loan demand and customer risk appetite.   However since then DBS's shares have recovered and closed SGD 40.83 last Thursday, up 7.7% in just 1 week. 

Is DBS a solid buy under SGD 40?  Let's check out the reasons why. 

Fundamentals and Growth prospects - DBS has a solid track record in terms of asset quality, capital adequacy and disciplined risk management.  DBS's diversification across traditional banking, digital innovation and wealth management, provides a balanced revenue mix that can weather economic cycles. 

In addition to that, DBS has a strong commitment to leveraging Fintech initiatives and expanding into regional markets which could drive additional revenue growth over the medium to long term. 

When buying below SGD 40, investors can benefit from an attractive entry point that can capture more upside potential as the markets gradually unwind from short term headwinds and reassess DBS's long term value proposition. 

Dividend Appeal and Total Return - Beyond capital appreciation, DBS is known for distributing consistent dividends.  At the current dividend yield of 5.44%, income focused investors who buy DBS below SGD 40 reinforces a dual opportunity - the potential for share price recovery coupled with steady dividend streams.  This potent combination may help buffer against market volatility and provide a reliable source of passive income even as economic conditions fluctuate. 

Risk Factors and Market Environment - No investment is without risk.  Concerns over global macroeconomic headwinds such as rising interest rates, inflationary pressures and potential regional slowdown can affect the financial sector broadly including DBS.  However DBS 's prudent risk management and strategic focus on digital transformation tend to mitigate these concerns. 

Analysts Rating - The majority of analysts recommend DBS as a Buy or Strong Buy with an average Target price of SGD 45.69, an upside potential of 11%.  A purchase price of below SGD 40 could offer a great upside potential and represent a golden opportunity for long term investors like me who believe in DBS's business model and its ability to navigate economic cycles. 

It is important to note that DBS has been buying back its own shares recently.  The bank bought back and canceled 700,000 shares  worth SGD 26.7 million in the open market on Friday 11 April.   

Share buybacks can be beneficial for investors as they reduce the number of shares available, with the value of remaining shares increasing.  Share buybacks can also increase Earnings per share too. 

I believe that DBS is a solid buy under SGD 40 due to DBS's leading market position in South East Asia, resilient performance in a diversifying financial sector and attractive dividend yield. 

I have bought DBS since 2022 and in that time DBS has rewarded me with both capital appreciation and great dividends. 

As the late great Charlie Munger likes to say "The Big Money is not in the Buying and Selling but in the Waiting". 

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