Founded in 1974, Temasek has an impressive track record of 15% annual returns in Singapore dollar terms since its inception. Last week, the company filed a 13F filing on all its US securities that it currently holds. Here’s a look at Temasek’s five biggest positions and what each of the companies does.
Alibaba Group Holdings Limited (US$6.6 billion)
Most of us would already be familiar with this Chinese e-commerce giant that is founder-led by entrepreneur Jack Ma. The company provides consumer-to-consumer and business-to-consumer e-commerce services, as well as a host of other services such as cloud computing, electronic payments and financial services.
Alibaba has grown at pace in recent years and is continuously evolving and expanding its services. In the last quarter, revenue increased 61%, while diluted earnings per share jumped 32% year-on-year. The company will release its earnings update for the second quarter of 2018 later this month.
CenturyLink, Inc (US$2.3 billion)
As the second-largest US communication provider, CenturyLink has customers in more than 60 countries. The company also provides network and IT solutions and has added cybersecurity solutions as an additional service.
CenturyLink’s share price has not fared so well over the last few years, but the company did post encouraging financial results over the last quarter, causing its share price to pop 13%. It currently has an attractive 10.1% yield that may entice income investors.
Gilead Sciences, Inc(US$788.2 million)
Gilead Sciences is a research-based biopharmaceutical company that aims to discover, develop and commercialise medications for life-threatening illnesses. The company has a decent portfolio of marketed products that include the treatment of HIV, hepatitis and lymphoma.
Shares of the Gilead Sciences currently trade at 12 times earnings and have a dividend yield of 3%. The company also has more medications in the late stages of clinical trials which can boost earnings in the future. These include the highly anticipated Selonsertib, which could be a potential leader in the treatment of non-alcoholic steatohepatitis.
IHS Markit (US$766.7 million)
The global information provider, which was formed through the merger of IHS Inc and Markit Ltd in 2016, helps provide information on capital-intensive industries and markets. The company has a team of 5,000 analysts, data scientists, financial experts and industry specialists serving more than 50,000 customers worldwide, including 80% of the global Fortune 500 firms.
IHS Markit reported an 11% increase in revenue year-on-year in the last quarter, with earnings per share up 17%. It currently trades at 36 times its earnings and has a market cap of around US$21 billion.
FTS International, Inc (US$592.6 million)
This oil and gas well completion company completes the list of Temasek’s top five holdings. Exploration and production companies employ FTS International’s expertise on customised hydraulic fracturing solutions to improve their recovery rates from oil and gas wells. FTS International was listed as recently as earlier this year. However, its shares have not fared well, plummeting around 40% since its listing.
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