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Friday, July 8, 2016

2 Oil stocks in particular to watch

The price of oil had recovered and this can bring in more work for oil companies. Keppel Offshore and Marine just announced a $120 million contract being renewed by existing customer.

  • Falcon Energy (recent share buybacks done by company)
  • Vallianz (strong results not reflected in share price)

Saturday, April 23, 2016

Parkson Asia Retail, it's a steal at this price



Past 10 years chart from Google Finance

Share price of Parkson Retail Asia had been tumbling since 2013. Based on the current price of 0.215, it's dividend yield in 2014 is a whopping 44%.

Its net cash in balance sheets stood at 0.16 after selling off their vietnam assets. Although its net profit was not fantastic, its remaining assets which includes all its stores and inventories are definitely worth more than 0.055

Its NAV stood at 0.28 which shows that Parkson is currently trading at a discount.


Thursday, March 17, 2016

Hong Fok, secretly moving

Hong Fok's a very quiet stock that no investor will notice. It is a property company and owns The Concourse as its biggest assets. Its net asset value stood at $2.36 while it is currently trading at $0.79.

Directors in the company is actively buying back Hong Fok shares and recently, it announced plans to issue 1 bonus share for every 10 shares owned.

Thursday, January 21, 2016

M1, how low can it get?

Singapore telco M1 share price is plunging downwards. At $2.28, it is at 5 years low with dividend yield of 6.5%. Shareholders who buy M1 before 12 Apr 16 will be entitled to the payout of $0.083 per share.

5 Largest shareholding of M1
  • Axiata 28.31%
  • Keppel Corp 19.09%
  • SPH 13.28%
  • Colonial First State Asset Management (Australia) Limited 2.95%
  • Macquarie Investment Management Limited 0.75%
Although there are talks of a 4th telco coming in, M1 had been in the telco business for a long time, and these telco assets were built up and maintained over the years.

M1 latest FY2015 showed a 1.5% growth, and despite that share price had been dropping continuously. 

M1 CEO Karen Kooi mentioned that with Netflix entering the Singapore market would provide a level playing field in the tv business. 
Although Singtel signed a strategic partnership with Netflix, it is still likely that M1 could be in talks with them to do some tie-up as well.


M1 does not own tv assets at the moment as compared to starhub and Singtel and if they are able to do tie up with Netflix, costs incurred would likely be lower than singtel and starhub.

Friday, January 8, 2016

Singhaiyi Group, moulding of a new gem

Singhaiyi group involve in property investments and developments in Singapore and United States. It also hold properties in Malaysia.

One of the key reason why i think it is a gem is because of the strong management team on the board. More info can be viewed here

Neil Bush is the non-executive chairman of the group. Mr. Bush is the third of five children of the 41st United States President, Mr. George H.W. Bush.

Singhaiyi's net asset value stood at 16 cents while it is only trading at 10 cents. Since Dec 15, Gordon Tang who is non-executive director, together with his spouse, Celine Tang, who is the group's managing director started buying back shares from the market.

SingHaiyi is known for its investments in undervalued assets in the US. The group bought three US properties at steep discounts to their market values over the past two years, some as large as a 77 per cent discount to net book value, with a view to enhance their values via redevelopment. Two of the assets are in the San Francisco Bay Area.

SingHaiyi also has strong backing from a sponsor, American Pacific International Capital (APIC), which has over 13 years of experience in the US.

Friday, December 18, 2015

Dividend play via Margin financing

Normal dividend play method

Buy stocks under cash account

Example
Initial capital outlay $200,000

Buy xxx stock with a dividend yield of 7%

Total return per annum: $14,000


Margin Financing via Kim Eng

Example
Initial capital outlay $200,000

Buy Grade A stock with a dividend yield of 7%
To find out whether your stock is a grade A stock, click here

With $200,000 stocks as collateral, available financing is $450,000

Utilize $450,000 to buy Grade A stock with 7% yield, interest per annum 2.88%

Total return per annum: $14,000 + $31,500 - $12,960(2.88% interest p.a.)
Total return per annum: $32,540

Risks of margin financing

The risks of margin financing is that if the borrowings used to buy shares fall below a certain ratio level, a cash top up will be needed to maintain a margin ratio of 140%.

With a $200,000 capital outlay of cash/stocks, stocks bought at $450,000

Amount of financing: $250,000

Day 1

Margin ratio = $450,000/($250,000) = 180% (current margin ratio)

Day 2

$450,000 stocks become $340,000

Margin Ratio = $340,000/$250,000 = 136%

A margin ratio of 140% is required to maintain your financing, a failure to top up may cause your shares to be forced sold.

Therefore, in order to maintain the 140% margin ratio, he needs to top up $10,000.


Saturday, November 28, 2015

Volatile markets created some buying opportunities

Markets are pretty volatile in the past few weeks. Yellen is hinting a possible Fed interest rates hike this 15-16 December during FOMC meeting.

The STI index was down 0.89% last friday to 2859.12 points.

Stocks to watch next week:


  • ST Engineering - war in middle east may drive demands for weapons
  • City Developments - In oversold territory (RSI indicator circled in green, Money flow index circled in red) Recent London land acquisitions showed shift to overseas due to government cooling measures on singapore properties.
  • Global Logistic Properties - e-commerce driving needs for logistics spaces
  • Singapore Post - excellent future prospects with recent acquisitions
  • Starhill global REIT - dividend yield of 6.8% at current price of 0.755



Wednesday, September 23, 2015

Next Buying Signal for Stocks

The next buying indicator of a recovering economy is to see weakening of USD. The current strong usd is making exports in the U.S. less attractive. More inflow of usd can inject more funds into capital markets

Why is the weakening of USD?


Wednesday, September 16, 2015

Future of oil price uncertain

Threat to oil price may occur in small occurrences but can get bigger as electric cars and solar energy are becoming more widespread:


Monday, August 17, 2015

Safety in volatile market

Many blue chip stocks have dropped today. Banks are facing an increase number of risks in relation to the economy.

Oil and gas companies and commodities companies had experienced a lower prices on their commodities. This may slow down loan growth in banks and also companies's ability to pay up.

Property stocks like GLP, Capitaland and HK Land, have dropped due to the weakening of the Chinese currency, with fears that a conversion back to Singapore currency will reflect lower profits.

Cargo volumes dropped, indicating a slowdown in overall economic activity. Companies with lesser profits result in their ability to pay back loans. This factor could lead to a slowdown in bank earnings.

The launch of Singapore bonds on 1 October 2015 will also reduce the amount of cash deposits held in banks as close to about $1 billion a month of Singapore bonds will be issued out in October.

Amid volatile markets and a possible correction, these 2 stocks provide safety in volatile markets:
  1. M1
  2. Q&M Dental
M1

  • Oversold
  • 6% dividend yield at current price
  • Offer cheaper plan to scoop up bottom markets to scare off 4th telco
Q&M Dental
  • Aggressively acquiring clinics in Singapore, Malaysia and China
  • Closest to becoming monopoly in Singapore dental industry
  • price to earnings growth stood at 0.3(PEG is undervalued if less than 1)  after Q2 2015 results

Wednesday, August 5, 2015

M1 target price $2.7

With news that IDA will offer a 60% discount, a forth telco entry sparked a big drop in M1 price. This 60% discount is restricted to new bidders only.

Source: http://www.todayonline.com/singapore/ida-offer-spectrum-lower-price-facilitate-entry-fourth-telco

The IDA said that it does not see the market as being able to support more than four players.

Even with news that a forth telco may be coming into the market, M1 had ramped up its efforts to capture market share by offering the cheapest mobile plans. This plans may lure in more subscribers in attempt to discourage a forth telco entrant. However, there are still no news of who will be the forth telco yet.

Source: http://www.straitstimes.com/tech/m1-rolls-out-cheapest-mobile-plans-aimed-at-consumers-who-do-not-need-handset-upgrade

What price to enter M1 given its attractive dividend yield of 6% at current closing price of 3.05?

5 year historical chart
Source: KE Trade

Trend lines intersect at $2.7
Target entry price: $2.7

Tuesday, July 28, 2015

Innovalues

Considerations
  • Saga Tree Capital bought it since November 14 at an average price of $0.42
  • It bought again on 4 jun 15 at an average price of $0.93
  • FY2014 saw its net profit increase of 80% while its cash on hand doubled from $11 million to $22 million
  • 1st Quarter 2015 saw a net profit increase of 100% while its cash on hand increase 22% from $22 million to $27 million
  • Next results scheduled to release on 13 Aug 15

Lum Chang

Considerations
  • 17 Feb: Announcement of Yishun mixed development valued at $487 million
  • Brings total contract value to $1 billion in 2015
  • director start buying back shares from Feb to Jun (after announcing contract win)
  • Latest buyback price is at $0.375
  • Increase of net cash from $79 million to $122 million in its 3rd Quarter Financial statements

F&N

Considerations
  • Close to 5 year low (Figure 1.1)
  • Strong SGD enable group to purchase goods at lower costs in Thailand and Malaysia
  • Stable Vietnam economy with increase demand for dairy products. (F&N owns 11% stake in Vietnam's largest dairy producer Vinamilk)
  • Myanmar brewery was valued at double the price offered by Myanma Economic Holdings.


Figure 1.1
Source: Bloomberg


Sources


Tuesday, July 7, 2015

Beware of China markets

This article explained that the Chinese government are allowing the people to buy stocks with borrowed money, and they can even use their house as collateral to buy stocks. This move is aggressive and not sustainable.

Source: http://www.bloombergview.com/articles/2015-07-06/chinese-imitate-western-steps-with-stock-market-interventions

Although Goldman Sachs and DBS CEO said that the china markets are not in a bubble yet, it could probably be the case of easing the public about the dangers of the China market.

Source:
http://www.smh.com.au/business/markets/goldman-sachs-stays-bullish-on-china-stocks-20150708-gi7cjs

Today, Chinese government told China state-owned firms not to sell shares despite stock market plunge with hope to stablise share prices.

Source:
http://www.straitstimes.com/business/companies-markets/china-tells-central-government-owned-firms-not-to-sell-shares-as-stocks

If there is too much reliance on the government to influence share prices, markets may move up or down corresponding to government decisions rather than fundamentals.

As of now, i think that retail investors should still look into SGX stocks. Although SGX had reported failling liquidilty in the markets. However illiquid SGX may be, it based in Singapore and supported by a stable currency.

As SGX is highly regulated by MAS, it is for now safer to invest here than China.

Thursday, July 2, 2015

20k Portfolio in Blue Chips SGX stocks

My perspective of a $20k blue chip stocks for retail investor. Below are a list of stocks that would construct a retail investor portfolio.

Prices of Stocks
  • STI ETF ($3.38)
  • M1 ($3.25)
4000 shares x STI ETF = $13,520
2000 shares of M1 = $6500

Total cost is = $20,020

STI ETF provides excellent diversification in the event of a single sector crash. Its top 5 holdings include 3 relatively strong Singapore banks namely DBS, OCBC and UOB.
Source: Bloomberg

Current Dividend Yield 2.75%

Over a 10 year period, the STI ETF provided a return of 9.06% including dividends and 5.89% excluding dividends

M1's recent drop in price due to news of a fourth telco had became an attractive buy with a dividend yield of 5.83%.



Source: Bloomberg

Its recent first quarter financial statements, M1 slashed off 16% of its debt. Lesser company debts keep M1's balance sheet healthy. 

19 Jun 15, chairman of M1 bought 50,000 shares at $3.23 each. This could be an indication of a slightly undervalued share value.

Monday, June 22, 2015

George Soros is short $1.1 billion in the S&P 500

Should we be afraid?

There are still no clear indication of when will the Fed raise interest rates and now George Soros is betting against the markets.
Source: http://www.marketwatch.com/story/george-soros-goes-short-with-mutual-funds-and-etfs-as-the-sp-500-goes-1400-days-without-a-10-correction-opines-lowriskmutualfundsnet-2015-06-18

Apart from shorting the markets, George Soros also calls for supplying of lethal arms to Ukraine and secret training in Romania to avoid direct NATO presence in Ukraine. In a release by hacker group CyberBerkut, it explained that George Soros collaborated with the US government with an intent win over Ukrainian assets if successful.
Source: http://www.mintpressnews.com/leaked-george-soros-puppet-master-behind-ukrainian-regime/206574/

Coincidently this month, George Soros also bought some speculative stocks like clinical-stage biotechs Juno Therapeutics (NASDAQ: JUNO  ), Kite Pharma (NASDAQ: KITE) and Sarepta Therapeutics (NASDAQ: SRPT).

He also bought communication technology company MaxLinear, Inc. (NYSE:MXL)

These stocks are mid to small cap stocks that are loss making with little or no debts in their balance sheets. It is indeed odd for him to make such acquisitions unless he is short of the markets or funds buying into these stocks, therefore fuelling a temporary rise in their share price to profit from a market correction.

Source:

Sunday, June 21, 2015

Jardine Cycle and Carriage: Why did it dilute share value

Jardine raised a $772 million through a rights issue to fund its previous acquisition of Siam City Cement. Why dilute so much share value because of a cement company?

The group structure as a whole, a lot of subsidiaries residing within the Jardine Group have property development businesses and thus, it makes good sense to acquire stakes in Thai's second largest cement maker.

Jardine Cycle and Carriage also owns 50% of Astra International in Indonesia. Its diversity in core business services are a key to managing costs better than other firms.

The dilution of share value will enable the Jardine group to better manage costs in the construction sector throughout its property development subsidiaries.

This rights issue could be due to an anticipation of a possible Fed's interest rate hike later this year, However, it also allows Jardine Cycle and Carriage to reduce costs on funding.

Source: http://www.dealstreetasia.com/stories/jardine-cycle-carriage-to-raise-772m-via-rights-issue-8063/

Tuesday, June 16, 2015

Why buying index is good

2 available index funds to buy in SGX

  • STI ETF
  • Nikko AM STI ETF
These indexes act as benchmarks to the Singapore stock exchange and hold a variety of stocks that mimics the performance of the Straits Times Index.

Diagram 1 below shows a list of stocks that Nikko is holding. The chart indicates a variety of sectors of stocks the fund represents, which is attractive because it is well diversified. A retail investor might not have enough funds to construct a portfolio like this, and therefore Nikko and STI ETF are good index funds to consider investing.



Diagram 1 (Nikko AM STI ETF)

Benefits of Index
  • Well diversified portfolio
  • Low management fees
  • Easy to understand
  • Safer than aggressive stock picking/trading

Alan Greenspan, an American economist who served as Chairman of the Federal Reserve of the United States from 1987 to 2006 shared his thoughts on investments "The best strategy for equity investment has always been: Buy and hold and forget it,” he said. “Once you start to try and trade the market – I don’t care how good you are, how smart you are — you will not beat an index fund."

Let's all look forward to index funds :)



Sunday, June 14, 2015

Noble group, attractive vs not attractive

Noble group has been one of the very 'glamorous' favoured by retail investors. Its share price dropped to 6 year low on 3 Jun 15. Despite its accounting discrepancies, investors are still positive of a rebound.

Below is the summary of findings by Iceberg-Research


Summary of Findings:

Noble exploits the accounting treatment of its associates to avoid large impairments and fabricate profit.-

Yancoal is the most representative example, with a gap of $600m between the carrying and market values. However, the accounting technique has been used for other companies.-

Contrary to what Noble’s management claims, the misfortunes of these associates have a
substantial cash impact on Noble.-

The proclaimed recovery of the Agri business in 2014 was manufactured through the use ofquestionable methods such as subsidies from the group or depreciation cuts.-

We believe the final price for the new associate Agri will be much lower than the provisional $1.5b payment; and/or that Noble will have substantial remaining financial commitments to its new associate. Noble may once again use the accounting for associates to hide the impairment.-

Selling the palm oil business will be very difficult for Noble since the licence of one of its subsidiaries has been revoked by the local government.



The person behind Iceberg isn't someone normal but rather an account or an auditor. He or her understanding of financial statements have shown accounting background.  Carey Wong, an analyst in OCBC investment research in Singapore believes that the person who wrote Iceberg has an accounts background with good understanding of financial statements. Without the report, it is not easy for retail investors to learn about such information. The person could probably be a former employee in Noble in order to understand such detailed accounts engineering.

Even with share price uncertainty, it is not easy to know the actual valuation and how low it could get unless we get some perspective from somewhere. I happened to chance upon Iceberg's third report which gave a hint of how low Noble's price can go."After impairments and using a price-to-book valuation method, we find a valuation of S$0.1 per share." 

Attractive or not attractive?







Monday, June 8, 2015

What's behind IMF asking the Fed to delay interest rates hikes till 2016?

IMF had asked the Fed to delay interest rates hike till 2016. However, is there a reason behind this?

Source: http://money.cnn.com/2015/06/04/news/economy/imf-federal-reserve-rate-hike-2016/

Recently, George Soros, the legendary investor had called on the U.S to provide advanced weapons to aid Ukraine against a Russian aggression. However, Ukraine is broke and therefore if U.S were to go ahead to supply weapons, it will have to be financed through their own pockets.

George Soros advised the Ukrainian leadership to regain control of the markets, in which he could push for the Federal Reserve to extend  a $15 billion three months swap arrangement with the National Bank of Ukraine. Soros told Poroshenko that the IMF would need to come through with a $15 billion package, which was confident would lead the Fed to also come through with more money. This move would reassure the markets to avoid a panic.

Source:
http://english.pravda.ru/news/world/08-06-2015/130910-soros_usa_weapons_poroshenko-0/
http://www.marketoracle.co.uk/Article50995.html

Is this one of the factors that led to the IMF asking for a delay in interest rates hike?

Personal View
I think that with such big political intention out there, interest rates hike could be set for a delay till 2016. US weapons manufacturer will benefit from this. Equity markets in US will continue to rally in a low interest rates environment.

If the war situation between Russia and Ukraine tightened, oil price could go up as well. Inflation rates will not be spared as the cost of living increase around the world.

Investors who hold equities and properties will continue to ride the inflation wave. With so much outflow in US, investment in US treasury bonds may not bean attractive option.

The low ringgit in Malaysia is unusual because oil price recovered to $58-62 per barrel from previously a low of $40 a barrel, but yet the ringgit is not strengthening. There is more to be discovered on the weakening of the ringgit.

I'm heading to bed now, so i'll end my blog post here. Good night!

Wednesday, June 3, 2015

5 articles that hint a oil price crash


These articles were search between May to Jul 2014, a start of the plunge in oil prices. These were some of the indicators that were overlooked by investors like myself, who currently hold on to a substantial stockpile of oil stocks.

Although it was a painful lesson, it was important to know the reason for such events to impact the global financial markets.

Below are a list of interesting reads before the plunging of oil price:

9 Reasons Why Oil Prices May Be Headed For A Bust (9 June 2014)
http://www.forbes.com/sites/jessecolombo/2014/06/09/9-reasons-why-oil-prices-may-be-headed-for-a-bust/

North American Oil Glut to Keep Prices Low, IMF says (9 Apr 2014) 
http://oilprice.com/Energy/Oil-Prices/North-American-Oil-Glut-to-Keep-Prices-Low-IMF-says.html

Obama aims oil weapon at Putin but will he pull the trigger? (11 May 2014)
http://www.telegraph.co.uk/finance/commodities/10823349/Obama-aims-oil-weapon-at-Putin-but-will-he-pull-the-trigger.html

EU, U.S. announce new sanctions on Russia over Ukraine (29 Jul 2014)
Obama Takes Step Toward US Oil Exports, And Maybe New US Energy Policy For 21st Centuryhttp://www.forbes.com/sites/lorensteffy/2014/06/25/oil-exports-a-step-toward-21st-century-energy-policy/


Wednesday, May 27, 2015

Inflation, the cost of borrowing future money

Inflation causes the poor to be poorer and the rich to be richer. Cost of food and transportation have increased with time, and the cost of them will continue to increase as long as we are living in the world of borrowed money.

Future money, and lots of future money were borrowed to meet GDP growth expectations and create jobs for the people. US introduced quantitive easing to erase borrowed future money that cannot be repaid. By keeping interest rates low, they allowed rich corporations to become even richer because companies can now borrow money at rates close to zero.

Apple had $194 billion in cash, which is enough to buy 2 McDonald's corporation.
Source : http://techcrunch.com/2015/04/27/apple-now-has-194-billion-in-cash/#.39s1m0:e9Vj

More countries are either erasing debts or printing more money in the world today, and these polices have desirable results to improve the overall economy. However, these achievements have been successful at the expense of consumers which is the middle and low income bracket household. Things either became more expensive like food, transportation and services or cheaper like communications and electronics. Companies or small medium enterprises faced increased in costs which hopefully can be passed on to consumers or customers.

These scenarios are evident of the inflation structured economy today that we live in. And if we still keep our money in the bank, the value of our money could end up depreciating faster than we could imagine. A bowl of noodles now cost $3-4 may soon be $5-6 in two to 3 years time. MRT rides that cost $0.79 will soon be $1.

This is the cost of borrowing future money which affects us in an invisible way.




Thursday, April 23, 2015

BreadTalk Group

This company issued a number of buybacks on 16-17 Apr, 22-23 Apr since its release of its full year 2014 financial statement.

It is currently holding $95 million in cash and its debts stood at $154 million. Its debt is 1.62 times its cash, which still looks healthy on their balance sheet.

Management states its intention to explore opportunities to grow their business in India, Myanmar, Cambodia, Japan and Australia and lastly, China.

Its main business derives from consumer demand, and therefore is resilient against economic downturn.

With the buyback mandate issued by the company, is could be an indicator of a good buy in this stock.


Monday, April 20, 2015

M1, a relatively stable Blue Chip Stock

M1 is relatively stable, given its consistent payout of dividends and rolling out of its 4G network. Although it only focuses on non-tv business, it experienced a healthy net profit growth of 6.6% in its 1st quarter of 2015 as compared to 2014.

It reduced its borrowing from $52 million to $3.8 million, a 92% reduction and also see its cash flow reduced by 83% from 103.9 million to $17.8 million.

Without the need to concentrate on TV business unlike Starhub and Singtel, it should have more resources to its 3 core services namely Mobile telecommunications, International call services and fixed services.


Tuesday, March 31, 2015

RIP Lee Kuan Yew

Condolences to our founding father Mr Lee Kuan Yew, who passed away on the 26 Mar 15 at the age of 91.

It is no doubt that the success of Singapore are fruits of the seeds you sow many years ago.

Wednesday, March 25, 2015

My ideal US portfolio

Apple

Not only because its Iphone target the upper class market share, Apple had put in a lot of effort to develop an ecosystem within its products. One of the example is iCloud which links all the data of the mac products together.

Visa

One of the highest market share in online / non-online payment services which i see as a very defensive stock.

3M

Developed products that are very durable and its excellent manufacturing quality is curved within its brand that is not easy or rather quite impossible to duplicate.

Disney

Targets the kids around the world with fun, entertaining and educational media which mature with them through adulthood , and they spare no effort to constantly market their brands.


Sunday, March 22, 2015

Undervalued stock, Nam Cheong

Nam cheong seems to be one of the very undervalued stocks that is affected by the slump in oil price. Recently, it had sold 2 of its vessels for US $58m and its book orders stood healthily at $635 million ringgit.

Source: http://www.businesstimes.com.sg/companies-markets/nam-cheong-clinches-us58m-orders-for-two-vessels

It has a PE ratio of 5, with a 5% dividend growth rate and its price stood at 1 year low.

Source: http://www.bloomberg.com/quote/NCL:SP


Assessment

Since it sold 2 vessels in USD and its financial statements deal in ringgit, it is very likely that this deal will cause a spike in earnings.

Saturday, March 14, 2015

Indicators of a possible interest rates hike

There had been some speculation of Fed raising interest rates. There are some indicators to suggest that interest rates are indeed about to rise.

Thursday, March 12, 2015

SIBOR rates have risen

According to todayonline.com, SIBOR rates hit a 7 years high in Singapore. Seems like new properties have to slash their prices even more to make up for the rise in SIBOR.

Cooling measures from the government are still in place for properties, but whether it will be lifted after a rising SIBOR rates is unknown. As for now, property companies with developments in Singapore could be hit the hardest from this.

Source : http://www.todayonline.com/singapore/homeowners-hit-sibor-rises-highest-seven-years

REITS are in the danger zone if interest rates continue to rise. It is now the best time to keep some cash and wait for something to happen.

Sunday, March 1, 2015

What stocks would i buy now?

After Isetan lost $3.1m due to surging rental and keen competition from other new malls. Its future prospects were faced with challenges of increased online shopping.

Source: http://www.channelnewsasia.com/news/business/isetan-lost-s-3-1m-last/1685270.html

As more consumers move to online shopping, there will be more demand for logistics sector in terms of warehouses for storing goods and courier services to deliver goods.

3 sectors for growth (Online shopping)

  • Online payment services
  • Logistics and warehousing
  • Insurance (to protect online consumers)


There are a few stocks that i see opportunity in but not all of them are cheap at the moment.
  • Singapore post - Established a good online platform for online shopping and a leading provider of mail, logistics and retail solutions in Singapore
  • Global Logistics Property - Invest and own logistic warehouses around the world, also owned or partially owned by state-run wealth fund
  • Mastercard (US. listed)  - Provides to a bulk of online and offline payments around the world

Friday, February 27, 2015

ES group a potential takeover target?

In its FY2014 report, the group explained about its direction for growth.  "The Group remains on the lookout for opportunities to expand its core business while exploring possible mergers and acquisitions with a view to enhance shareholders’ value in the long run."

Source: http://infopub.sgx.com/FileOpen/ESGroup_FY2014_Results_27Feb15.ashx?App=Announcement&FileID=336684

Although revenue decreased by 18%, net profit increased by 218%. This company is expanding fast with very little debt and having a lot of customer backlogs to fulfill. It is in my opinion a fast growing small company with very little or low risk despite a falling oil price.


Wednesday, February 25, 2015

A right decision to sell Pan United


I bought Pan united on the 1 Oct 12 and sold it on 16 May 14. Initially, i see this company as a dominant supplier of basic building materials in Singapore, coupled with huge government initiatives to upgrade infrastructure and build public housing.

However, the company acquired Changshu Changjiang International Port (CCIP) for RMB436.5m in Feb 14. The news was bad in my perspective because port facilities will incur more expenses to maintain.

I like its supply of basic building materials business in Singapore, but do not like that fact that it is acquiring a port and not focusing on its profitable business. With so much assets to handle, this company may not be able to concentrate on what's most profitable to itself as well as to shareholders.

The image below is taken from SGX website show a review of its FY2014 performance indicating that CCIP was part of an increase in interest costs and depreciation expenses.





Tuesday, February 24, 2015

2 company that reported good earnings

Chip Eng Seng - year to year increase of 282.6% in net profit.

  • Developer
  • Investments in hospitality/property


Future prospects

Its investment efforts are targeted at recurring income for future growth. Although future is promising for this, a spike in interest rates may affect this company due to high borrowings.

TREK 2000 INTERNATIONAL LTD - year to year increase of 137.85% in net profit.

  • Consumer electronics manufacturer

Future prospects

The future of IT electronics sector remains uncertain as to whether the company can continuously keep up with innovation and reap from its R&D efforts.

Friday, February 20, 2015

MBSB Bursa a Strong buy

Malaysian Building Society Bank (MBSB) saw its net profit climbed to RM1.02 billion, a 70% increase in its 2014 full year as compared to 2013. There was a news that MBSB was the fastest growing enterprise in Malaysia 2014.

MBSB was about 70% owned by Malaysia's EPF, which is seen as a government-linked entity.

I think this company will continue to grow, and given its new 5 year growth strategy from 2015-2019 of changing its retail to corporate exposure from 85:15 to 70:30, it will acclaim more revenue from corporate customers, which are bigger slices of the pie.


Wednesday, February 18, 2015

Top 5 Blue Chip Stocks to buy in 2015


  • Raffles Medical - Room for growth when hospital expansion is completed
  • Keppel Corp - Low oil price and cheap acquisition of Keppel Land
  • ComfortDelgro - Stable and very good long term prospects
  • Silverlake Axis - Consistant annual growth and a heavy cash cow
  • UOB - prefer UOB which have lesser exposure as compared to DBS and OCBC
Wishing all a happy chinese new year! I'll looking forward to a remisier role around June period. 

If you like my blog, do support me by opening an account with me :)



Wednesday, February 11, 2015

Oil price have dropped, but demand is picking up as well



Source: http://www.bloomberg.com/news/articles/2015-02-11/goldman-here-s-why-oil-crashed-and-why-lower-prices-are-here-to-stay

As the chart hit the February period, demand has picked up as well. The justification for the increase in demand is unknown. Our vehicles do not consume more fuel than before, or rather that fuel prices have gone down that we can travel cheaply. But yet that do not justify the vast increase as well, unless oil consuming countries like India, China and US are aggressively buying them into their oil reserves.

The cheap oil prices could also improve profitability of the transport sector as well. A long decrease in oil prices could allow transport companies, utility companies to reduce their expenses.

Thursday, February 5, 2015

Global Logistic Properties

Source: Bloomberg

After a number of corrections, the price seemed to have reached a level where geopolitical risks seemed to have been factored in.

However, whether this stock has reached the lowest is unknown. However, i am optimistic that this stock will be a long term future growth stock due to the portfolio of assets supporting e-commerce companies.

Sunday, February 1, 2015

Be careful of China

China's growth story can be bullish but the amount of debts that could be haunting the country is worrying.

Source: http://www.ft.com/cms/s/0/085e0368-a534-11e4-bf11-00144feab7de.html#axzz3QX7IXZuC

Bank stocks in Singapore like DBS and OCBC have been soaring as well and both banks have exposure to China.

Since the change of lot sizes from 1000 to 100, investors can now have the option to switch DBS and OCBC for UOB, which have lowest exposure to China among its peers.

Source: http://sbr.com.sg/commercial-property/news/chart-day-heres-how-risky-singapore-banks-china-exposure-can-get

Friday, January 23, 2015

Buying indicators for Swissco

Firstly, from 26 Dec 14 to 22 Jan 15, there was about 5 instances of insider buying.

Secondly, it is hitting close to its 1 year low.

Source: Bloomberg






Friday, January 16, 2015

Sunday, January 4, 2015

Positive indicators on Maybank

I am extremely positive on Maybank, the largest bank in Malaysia. Although Malaysia is the worst performing markets last year, it seemed that Bursa could be on the oversold side which could project attractive buying for investors as US markets becomes expensive.

These are 3 reason why i am bullish on Maybank.

Firstly, Maybank's insurance arm Etiqa reported lesser profits due to insurance payouts for MH17 and MH370. The current market price for Maybank have priced in that factor.

Secondly, although it reported lesser profits, Singapore operations grew by 5% and its Philliphines operation grew healthily at 31%. Natural disasters had struck Malaysia with floods and Philliphines with typhoons that destroyed homes and companies. The demand for loans will be huge as these people seek to find shelter, food/daily essentials and services.

Thirdly, Maybank is at a discount to foreign investors due to the weaker ringgit and bearish Bursa.




Thursday, January 1, 2015

Good time to pick up oil and gas stocks

If you have a good balance portfolio and do not have oil and gas related stocks, now is a good time to grab them at a discount with the free falling of crude oil prices.

Wednesday, December 24, 2014

What to buy when times are good

Source: Bloomberg

The STI index shot up from 3200 to 3350, about 4% in 1 week. Stocks on the STI Index became more expensive in a week.

When the graph is up, downside risks get higher. Stocks like Jardine Cycle and Carriage, DBS, OCBC, UOB have gone up quite a bit.

However, even if these high cap stocks going up, buyers can still look for bargains in the market, especially low cap stocks.

A sector to look at is the property sector. Property stocks have gone down since the cooling measures implemented by the government to slow down or prevent a property bubble in a low interest rate environment.

As Singapore dollar strengthened against the Aussie dollar, a lot of property companies in Singapore have moved their focus to Australia.

Below is a list of some of the low cap property/construction stocks.



  • Heeton Holdings (Market Cap:155.8 million PE Ratio:11 Book Value:0.5)
  • Hong Fok (Market Cap:660.87 million PE Ratio:2 Book Value:0.4) 
  • Centurion (Market Cap:386 million PE Ratio:6 Book Value:1.2)
  • Wee Hur (Market Cap:344.72 million PE Ratio:3 Book Value:1.5)

Monday, December 22, 2014

Is it a good time for REITs now?

A very small portion of my portfolio consists of REITs, which can be a stable asset to hold on to. A typical REIT can give you returns of up to 10% a year as dividends, which comparing to bank rate of 1% is pretty attractive. However, if you buy REITs when interest rates are high, you probably got a good discount for it. But as interest rates had remained low for a while, the price of REITs has inflated a bit. Risk of interest rates hike remains. Therefore now should be a time to wait at the sidelines for the media to blow up an interest rate hike issue for REITs to be attractive again.


Monday, December 15, 2014

Strong indicators of a buy in Keppel Corp

Keppel Corp's share buy back today valued at close to $8 million. 3 days ago, its share buyback valued at about $3 million.

On 11 Dec 14, it made 2 consecutive share buy back programs valued at close to $10 million. To date, it had spent about $21 million in total on buying back its shares.

Loh Chin Hua, an unknown investor increased his/her stake today from 0.44% to 0.99%.

I am not exactly bullish on the crude oil price now but i think $8 could be one of the lowest buying points Keppel Corp can go.




Saturday, December 13, 2014

Portfolio Diversification


Portfolio diversification is a good way to measure the risks of your investments in stocks. For example, having more exposure to the oil and gas sector may be affected by low oil and gas prices because this will cause a slowdown in the sector.

The portfolio below shows the type of portfolio below demonstrates high risks to the oil and gas sectors.

If your portfolio have a higher exposure to property for example, then if property prices nosedive, your portfolio value will nosedive too.

Therefore, it is important to have a strategic asset allocation that will allow your portfolio to endure hard times in an even of a slowdown on a particular sector.

The portfolio example below is an example of how to diversify your portfolio.




Property 30%  Betting on long term increase of property prices
Healthcare 30%  Buffer against Crisis
Finance 30%  Center of Growth
Oil and Gas 5%  Potential for growth
Technology 5%  Potential for growth


Keppel Land

Property market has been suffering from government's cooling measures. But Keppel Land is a stock worth looking at.

It has a PE ratio of 6 while DBS, one of Asia's biggest bank, has a PE ratio of 11. It means that Keppel Land stock is still priced at a discount as compared to a blue chip stock.

Keppel Land recently sold 2 of its data centre assets to Keppel DC REIT and realised a net gain of S$65.9 million. 


This net amount could translate to better earnings for the next quarter results as it had reported a 10.6 percent drop in net profit in its previous quarter results.

Keppel Land, on 3 Dec 14, announced that it had entered a JV with a Myanmar company to develop a 23-storey office tower in Yangon. The office tower is located in the central business district in Yangon. The development is estimated to be at S$61.6 million, which is coincidentally close to the net gains on the sale of 2 data centers to Keppel DC Reit.





Friday, December 12, 2014

Our first Invest in SGX logo


Falcon Energy makes an offer for CH Offshore

Falcon energy owns about 29% of CH Offshore and wants to increase to 50%. As part of their expansion plan, CH Offshore provides them with a more diversified fleet of vessels to cater to more customers. Currently, CH Offshore has a fleet size of 15 AHTS vessels.




Friday, December 5, 2014

Crude Oil prices to stabilise in 2015

According to bloomberg, Rosneft has a $14 billion debt due in 2014 and Novatek has $46 million of debt to be repaid before Apr 2015.

Vnesheconombank also had $1.3b in public debt due in 2015. Russian companies face $3.93b of dollar-bond maturities by year-end.


These bond maturity dates could be factors of why crude prices fall because of an economic attack by US. Since US started flooding the markets with oversupply of oil, oil prices had been in the decline from $100 a barrel to $60-70 a barrel.

As Russia's economy largely depend on the export of crude oil and gas products, the reduction in these commodity prices may weight down on their profitability and thus, affecting their ability to settle their debts.





Wednesday, December 3, 2014

Drop in oil price, good for global economy in the long run

The U.S is very successful with this strategy of bringing down oil price from $110 to about $70 a barrel.

The US dollar strengthened with the halting of quantitative easing, and with the shale gas bloom, they started flooding the market with more crude oil.

The oversupply of the crude market caused the oil price to drop and at the same time dealing a huge blow to countries like Russia, Iran, ISIS. They export oil for profit and ISIS used the money to fund to expand its war chest and expanding its global terrorism threats.

Russia had been aggressive on the Crimea war against Ukraine, which were globally criticized. The MH17 incident made the situation worst.

Iran's issue about nuclear energy is clearly not in their favor with the dropping of oil prices. The low profitability issue may reduce their negotiating power on the table.

However, with the weakening of currencies in countries like Japan, Malaysia, EU, Australia. Global economies is set to pick up even faster with more exports as US is starting to exercise its strong USD.

In general, the economy is slowing down because of certain political factors, but in the long run is set to enjoy higher growth in 2015 and 2016.


Sunday, November 9, 2014

Why i sold SIA Engineering

The company is still making profits with reasonable amount of debts. Fundamentals remain intact in its Singapore business.

However, its overseas ventures are facing stiff competition and profit margins are heavily affected. This problem will have a long term impact on its profit growth.

While the stock have declined, it does not mean that this company is not doing well. While Changi Airport in Singapore are expanding to accommodate more aircraft, SIAEC should have this constant revenue stream given its already dominant position here.


Wednesday, November 5, 2014

STI might be building up for a crash

STI had gone up a fair bit this week while US had stopped its quantitative easing program. Investors are waiting for news of interest rates hike.

If interest rates go up in US and Singapore, banks may have their profits affected as general loans may go down. It is because people find it more expensive to take loans.

While the hike may not be steep, it may take a longer time for the effect to kick in. Meanwhile, enjoy the smooth ride for STI. It may not be a good time to pick up stocks now, i believe there are still stocks that offer discounts.

STI index stocks like DBS, OCBC, UOB have gone up while Jardine C&C is still holding them back a little.

Oil stocks like Sembcorp Marine and Keppel Corp have gone down due to low oil prices.

Generally, now is a time to hold cash while the STI index soar. While the higher interest rate hikes kick in, it will be the time to enter the market to buy.


Saturday, October 18, 2014

How to value companies

Hi everyone, in this article, i will talk about 1 method i use to value a company. The company i will be using is Falcon Energy.

Let's look at its net income for the past 4 years.

Source: SGX

The breakdown in net income in million is as shown below:

  • FY2011 - 3.274 (price $0.67)
  • FY2012 - 10.429 (price $0.27)
  • FY2013 - (2.387) (price $0.42)
  • FY2014 - 60.768 (price $0.335)
In FY2011, the net income is about 20 times less than FY2014 results and yet the the price is about 2 times lesser.

If their earnings can sustain at 60 million, their share price be valued more than $0.67. At the current market price of $0.31 is very undervalued.

This is one method you can use to value a company.


Thanks for reading everyone. :)

Friday, October 17, 2014

Discount on Azeus

Bloomberg

Azeus hit a 1 year low in price, while its growth is ascending. This stock price is undervalued.

Thursday, October 16, 2014

A falling star, Make a buy



Oil prices have been declining for 3 months and dropped $4 in 14 Oct. The largest single-day fall in more than a year. Brent oil at its peak in June costs about $115 while now it dropped to $85 a barrel.

Source: http://www.economist.com/news/finance-and-economics/21625819-oil-price-tumbling-good-or-bad-news-world-economy-both

The sudden drop in oil prices does not indicate an oversupply, however telegraph had mentioned that according to Citigroup, Saudi Arabia will cease to be an oil exporter in 2030.

Source: http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100019812/saudi-oil-well-dries-up/

Jim Rogers mentioned that the huge drop in oil prices was due to OPEC driving down prices because of shale competition in the US.

Source: http://economictimes.indiatimes.com/news/economy/indicators/recent-decline-in-crude-oil-price-artificial-jim-rogers/articleshow/44833118.cms

Great discounted stocks to watch in SGX
  • Keppel
  • Sembcorp Marine
  • Ezion (high growth fuelled by debts)
  • Falcon Energy
  • MTQ Corp

Wednesday, October 8, 2014

Go for Growth, Dividends or Capital Gains

After a series of bad investment choices this year, i got myself thinking about my own portfolio restructuring

As there are many opportunities in certain periods, it is always good to have certain stocks that are able to ride through the storm to provide us with growth and dividends in cash or shares. 

Growth stocks
As a beginner in stocks, i am always keen to learn from different people about their investing perspectives. One of it was to invest in Singapore banks like UOB, OCBC and DBS. These 3 stocks have good growth and will constantly distribute dividends yearly. 

I begin looking at higher value stocks like Jardine Cycle and Carriage because someone told me that a person who buys the stock knows about investing. Initially, i did not know why people choose this stock. Out of curiosity, I went to check out their business and ask around. I managed get answers that are able to justify the good value of this stock. Jardine C&C distributes Mercedes Benz, one of the premier luxury brands of car in Singapore, Malaysia and Myanmar. Apart from Mercedes, the group also distributes other brands. Their business consists of car distribution and maintenance. The maintenance portion of their businesses are recurring in nature, and thus able to provide a constant flow of income. 

Dividend stocks
Dividend plays are good as well because they provide you with good cash flow to reinvest and expand your portfolio. A person who played dividend stocks well is Dividend Warrior. He adhered to a patient strategy for good dividend yield stocks which seemed to be going well comfortably.

Capital Gains
Since SGX cap the lot size to a 1000 shares, penny stocks are one of the apple for investors looking for short term capital gains. In order for this to work, you have to correctly predict the the ups and downs of the stock.

Conclusion
My personal opinion would be to go for both growth and dividend stocks to ensure constant earnings over a longer period. The capital gains method would require constant monitoring and technical analysis to improve your prediction. 


Monday, September 22, 2014

Alibaba's a growth stock

Alibaba is a growth stock that grew tremendously over the past 3 years. It made $0.44 per share in 2011, $1.68 in 2012, $3.57 in 2013 and $10 in 2014.

Since its IPO on 19 Sep 14, its share price had soared from $68 a share to $93, an increase of 36% in a single day.

Growth is one of the main factor that drew many investors. From 2011 to 2014, its earnings have grown about 30% per year. E-commerce, like search engine companies are growing as more people gain confidence in online shopping.

Alibaba is definitely one of the stock to have.


Monday, September 1, 2014

Straits Trading

Recently, a friend told me he bought Straits Trading in August 13 at the price of $4.4. However, the price now have dropped to $3.

In this blog post, i will explain why it dropped dramatically due to the earning results. In HY2013, the company made a profit of $80.4m, which most of it is due to a gain on disposal of WBL shares. However, HY2014 did not see much income coming in besides their tin mining, smelting and hotel business.

While they earned $343m including a gain from the disposal of investment properties, its expenses offset most of its the earnings. Its tin mining and smelting business incurred $301.4m and their other, financial expenses and exchange losses amount to $26.5m.

After deducting all expenses, they reported $4.9m in net profits, which was 1636% less than last year. The stock price see itself moving up since Jun 13 and started dropping in September 13. The half year reports were released in Aug for both years.

The most important thing to highlight here is the fact that the major gain on disposal in 2013 does not determine the company's ability to grow given its huge expenses on their tin mining and smelting business. Although, its current price have factored in the negatives, i don't expect the company to grow much given its high operating expenses.



Saturday, August 23, 2014

Value penny stocks have gained momentum

KS Energy
Centurion Corp
Pacific Radiance
Swissco Holdings
Nam Cheong

These stocks reported good results, mostly came from the ship chartering, ship building servicing the oil and gas sectors. These sectors have been doing well and did not see demands dropping.

Centurion Corp's business lies in its consistent revenue from worker dormitory rental yields but its media business have been dragging down its profits. More value can be seen when it divest more of its media business and focus on its dormitory accommodation.

KS energy recently sold some of its assets and gained about $55m. It is now able to distribute this income as dividends to shareholders or make other acquisition to gain better market position. According to the recent release of its financial result, the demand for oil and gas sector remains positive. This translates into positive future growth potential for the company.

Sunday, August 3, 2014

Planning for Retirement

It is possible to invest in stocks for retirement. The power of compounding investment gives you the power to increase your assets over time. In this section, i will talk about how you can hit your retirement goal in steps.

The safest way to build up your assets in SGX is to look into Real Estate Investment Trusts (REITS). REITS are made up of a collection of properties and their income depends on the rental yields. After which, they will pay out majority of their net profits as dividends to shareholders. REITS are stable play when interest rates are low because they are normally high in debts.

A typical REIT company may give you about 4-6% depending on their performance. Lets assume it gives about 5% out as dividends every year.


First 100k in Stocks

  • Earnings of 5k per year
  • $416 per month
in progress...

Thursday, July 24, 2014

Improving your portfolio


Improvements to portfolio is no one time effort in a long term perspective. Market conditions are ever changing, similar to the political situation that is happening around the world.

Conflicts
Israel-Gaza war have became worst after the kidnapping of 3 teenagers. The conflict between Ukraine and Russia have not resolved itself. Furthermore, MH17 was brought down by Ukraine rebels which caused the intervention of other countries. China was getting more aggressive in the claiming of islands that caused unhappiness in the South East Asia region.

So much happenings around the world and stock markets react differently at different periods. Stocks may move because certain funds pump in lots of money to buy it. The big players are powerful enough to control the direction of the markets.

Therefore, retail investors like us have to be vigilant in the type of stock we choose.

Enhancing your portfolio
Most people sell stocks when they are high and buy stocks when they are low. That is not what i think should be the right approach to long term investment, because long term investment depends a lot on stock performance consistency. For example, i bought Vicom 4 years ago at $2.60, today's price closed at $6.68. Earnings per share is valued at $4000.

From this lesson, i inferred that stocks that do well consistently are more likely to continue doing well due to their business model. Therefore, instead of selling stocks that do well, you should sell stocks that are not doing well and buy stocks that have been doing well so that it will continue to perform well.

Do not take deliberate advice from brokers because brokers do not have any responsibility with regards to the money you earn or lose, they only earn the commission when a trade is executed. Therefore, it is important to do your own portfolio management and decide what is good for your portfolio in the long run.

Cutting losses
Do not be afraid to cut losses because when a stock is not doing well, it is harder for it to recover. Take a poor person for example, how long do you think he needs to be rich if he does not have enough money to make money.

This theory applies similar to companies that are not doing well. Therefore, it is essential to cut losses when necessary.

Approaches to Portfolio Management
There are a lot of stocks out there that performed really well over the last few years, and achieved a certain level of consistent performance. Although i agree that high dividend stocks are sometimes risky and therefore company is able to pay out high dividends to allow investors to take up some of the risks. However, there are still companies which are backed up by fundamentals and yet rewarding for shareholders.

In this section, i will talk about how i continue to invest in the type of companies that are both rewarding and less risky.

Portfolio management means that it is a continual process of managing your basket of stocks, stocks that will do well and what stocks that have under performed.

Stocks selection
I will list down some of the more important details in stocks selection

  1. Good Branding
    • Possess advantages that people will choose over other competitors
  2. Demographic advantage
    • Favorable to the increasing population (Healthcare, Telecoms, Transport, Food, Services)
  3. Political
    • Government owned companies that are favorable to win key contracts (Temasek Holdings related)
  4. Excellent financial position
    • Less debt (Debt to Equity Ratio less than 1) or no debt
    • Consistent annual profit growth to prove good business
Basis to sell/switch
Stocks that are burdened by debts and high operating expenses are facing a lot of challenge . Therefore, it is important to constantly follow up on their quarterly financial reports. Their reduction in net profit growth and high operating expenses are indicators to consider a sell in the stock.

  1. Loss of competitive advantage / slower in foresight
    • Switched OCBC with DBS after Wing Hang Acquisition because DBS made the move 12-13 years earlier with the acquisition of Dao Heng Bank.
  2. Increase in debts, operating expenses leading to reduction in profits
    • Sold Hyflux due to high debts and operating expenses.

Basis to buy

Stocks that will perform in the long run will likely start from the current position. It is because companies with good business model will follow them through for a long time.

  1. Less or no debts in their balance sheet - Allow them to earn pure profits and will slowly grow to a cash cow company
    • Azeus Holding, SGX are 2 stocks that have minimal or no debts in their company
  2. Good rewards in dividends in cash or shares
    • Banks (DBS, OCBC, UOB), MTQ Corp, Silverlake Axis 
  3. Consistent profit growth
    • Vicom, Silverlake Axis

Saturday, July 5, 2014

ES Group

ES group have been one of the most ignored penny stocks in SGX. The volume of this stock is low and also has very limited amount of analyst commentary on this stock.

ES group is a prominent sub-contractor of marine and offshore structures and vessels of all types and sizes. It is well known for its safety track records and have been in business with big players like Sembawang Shipyard Pte LTD and Keppel FELS and ST Marine Ltd.

The Company also owns a 70,000-square-metre shipyard with fabrication grounds in Thailand. Its FY2014 outlook states that more orders were secured for its Thailand yard and therefore its outlook remains positive for 2014 despite a slowing shipbuilding sector.







Saturday, June 21, 2014

Buying STATSChipPAC is not value investing

This company has been going up a lot because of news that Temasek Holdings is looking for buyers to take over this company.

In mid 2013, STATSChipPac closed a KL factory due to profitability concerns, and to consolidate its operations in China over several phases.

In a highly competitive semiconductor industry, STATSchipPac have to constantly invest in new technology to meet its customer needs. And if their foresight in technology goes wrong, it may end up like Blackberry or Nokia.

Source: http://www.straitstimes.com/breaking-news/money/story/stats-chippac-close-kl-plant-laying-1100-workers-20130628

The risks to invest in such company is not going to generate good returns over the long run because the risk over rewards might not be worth it. It has to constantly pump in cash flow to purchase new technology to keep up, and as competitive become stiff, prices of semi conductor products may decrease.

My advice is to stay away from this stock if you are a long term investor. Why would its parent want to sell this company away? The risk just isn't worth it.

Sunday, June 1, 2014

Singpost recent rally

Singapore post's recent rally had gone up fast after Alibaba announced a acquisition of 10.35% stake in singpost. The news announcement came strategically 2 weeks after singpost release its positive FY2013/2014 results.

Its effort in the e-commerce sector had began to gain traction after it announced its net profit of FY2013/2014 increased of 2.9% as compared to last year and saw its cash flow increased by 14%.

My view to invest in Singpost at the current price of $1.645 may be too rash as the rally lasted for 2 weeks consecutively. The company showed promise with their transformation into the e-commerce logistics solution and i think that is the direction that should benefit investors in the long run as Singaporeans are big shoppers online. In 2011, a survey by Paypal showed that Singapore's online commerce grew 30% from S$1.1 billion in 2010 to S$1.4 billion in 2011.

Source: http://www.asianewsnet.net/Sporeans-are-big-online-shoppers-50429.html

My entry price for this counter should range around $1.10-$1.30 as the rally was a spark of overwhelming media coverage.

Wednesday, May 28, 2014

Sectors to invest for the future

Statistics shows that the number of elderly people are set to rise.

Below are key sectors to invest in:

  • Healthcare - more elderly people need to see doctor
  • IT - tackle manpower shortages


Falcon Energy Group, an undiscovered gem

Falcon Energy reported a full year profit of US$102.084 million as compared to losses of US$2.15 million a year ago. Its cash flow increased from US$12 million to US$40 million from good operating income and loans from banks.

The US economy interest rates remains close to zero % and Falcon energy leveraged on its low interest rates to grow the company. However, risks of hiking interest rates remains as US has yet to raise the interest rates. 

Its jack-up rigs are expected to be ready by mid-2015 to mid-2016, which are expected to be in high demand. The company now still have recurring income businesses in the Oilfield Services Division. 

Price now remains cheap given its improved profitability. Furthermore, it leveraged on cheap loans to fund future expansion, which makes good sense for the company. 


Saturday, May 24, 2014

SATS solid operating cashflow ensures stable dividend payment

SATS strong operating cash flow had enabled its company to consistently ensure stable payout of dividends to shareholders. In the unaudited results for 4th quarter and full year ended 31 mar 14 statements, it displayed strong operating cashflow of $246.9 million and used 68% of it to payout dividends. It also saw its foreign translation losses reduced by 42% to $14.8 million from $25.6 million.

The aircraft passenger numbers in Indonesia is expected to see an increase in 15-20% per annum, according to its minister.

Source: http://www.antaranews.com/en/news/93840/indonesia-can-become-an-aircraft-maintenance-center-minister

With the acquisition of the largest gateway services of aircraft in Indonesia, SATS had positioned itself strategically for growth in SEA's largest economy.

Sunday, May 18, 2014

Pan United's acquisition dragging down on profits

Pan United 1st quarter 2014 results saw a reduced earnings of 14% as compared to 2013. The acquisition of 90% interest in Changshu Changjiang International Port Co., Ltd (CCIP) saw the increase amount of debt the company incurred. CCIP recorded a loss of about $5.1 million being a new port.

However, the increased in finance costs and the dragging down in net profits by CCIP makes this counter less attractive for me. Although it had risen in share price from my purchase price of $0.6 to about $1.

The CCIP business does not sound too attractive of an acquisition for the company.

Monday, May 12, 2014

2 possible gems

Financial statements released by Hiap Hoe and Silverlake Axis had certainly sparked my interest in the 2 stocks.

After Hiap Hoe acquired Superbowl, it had stated that there will be additional streams of revenue coming from rental, hotel operations and leisure business. Earnings for the three month period was $354.2 million, a significant increase on the $10.2 million recorded a year ago.




Silverlake Axis also did very well in its 3rd quarter with a decent 28% rise in net profit. It has been performing consistently well given its high PE ratio, but however have been giving a dividend of about 4%. 

Its sale software and hardware products gained more than a 100% while runner up maintenance and enhancement contracts rise steadily at 22%. Lastly, its software licensing business grew 16%.