HYFLUX STOCK: LESSON FOR INVESTORS

Dear readers, as you would have known by now, Hyflux stock has been suspended for reasons which I would not repeat here as these are well-publicized in the news. To be frank, I am not too surprised at the development of Hyflux since I have already noticed that this company has quite a lot of debt: $1.56 billion for the latest figure. Hyflux, in my opinion seems to be a highly-leveraged company, taking on quite some high debts to fund its ambitious growth. In light of the high debt, I have not invested in Hyflux before.

After the episode of Ezion and similar episodes of highly-leveraged energy companies, Hyflux episode is again a reminder to investors that the fundamentals of companies is really a pre-requisite to a good investment. It is unwise to chase some “growth stocks” if these growth are fueled by unnecessary high debts.



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