Portfolio Reflections (05 Nov 16)

Frasers Cpt
Top position and have no plans to pare down. Would love to add more if price crashes. Though now is cheap imo, it is already about 20% of my portfolio. Hence, only a bigger price discount would justify taking the risk of over-concentration.

M1
Lots of doomsayers in the market. 52w-low now. I expect M1 to yield at least 5% at current price (2.06). Would not divest (or cut loss), the company is a cash generating machine and I do not see a risk of it going insolvent. There is currently no upside catalyst for M1 but downside risk looms. IMDA has postponed the announcement of qualified 4th telco twice (latest on 28 Oct). It could mean anything. There is still a possibility of status quo due to unsatisfactory business proposals by new applicants or lack of funding. That will be a bonus to M1 investors.

ARA Asset Mgt
ARA is interesting at the moment. Trading was halted on Thursday, 3 Nov 16, pending release of announcement. It remains halted at time of writing. The market is expecting a privatisation offer by a consortium led by CEO John Lim, first reported by the Wall Street Journal on Friday afternoon. It would be a good chance to realize profit on the true intrinsic value of ARA. I mean ARA is truly a gem on SGX but SGX investors did not send the price higher. I am estimating an offer of at least 1.70 (including dividends) but hoping John Lim surprizes the faithful investors with a better offer.

OCBC
Boring, just keep it in cold storage and collecting dividends.

ComfortDelgro
Latest addition to portfolio. Decent dividends and higher dividends expected with the bus asset like model; solid track record of creating profit growth, resilient sector. No clear reason for the recent price slide at the moment. It could be suggesting a bad quarter to be reported next Friday.

CRCT
The only reit counter in portfolio. High dividend yield. A proxy to china's growing shopping market. Fed december rate hike looms, will look out for price crashes to add more.

800 Super
Recently added. Low risk investment.

Q&M Dental
Awaiting restructuring and listing of entities in China, expecting fireworks.

CEI
Bought after a price rally. It has since settle at 8% lower than my entry. Expects dividend yield to maintain, supporting the price.

Hock Lian Seng
Low risk net net company with long history and strong portfolio of completed projects. I would love to add more in the event that price crashes for no reason.

Declout
Betting on special dividends.

DBS
Outlook similar to OCBC. Taking small bites using Dollar Cost Averaging strategy.

Katrina
On hindsight, was a bad investment. Will not cut loss, since the group is expected to pay dividends. Just going to cold storage this. However, if price falls below IPO price, will consider averaging down.

Other updates:
Divested Singpost and GLP at profit recently.
Divested CCT at profit in Sep.
Fifo Noble resulted in a loss.

[Breaking!] Hock Lian Seng (J2T) Secures S$1.107 Billion Project From Changi Airport Group, in JV w/ Sembcorp Design and Consruction

Disclosure to SGX on 15 Aug 16, after market hours (PDF)

Google Finance (J2T)


Closed: 0.340

In view of the new 60:40 JV project,  HLS's construction order book will increase to about S$980 million. It is the highest ever since FY2010.

HLS has 60% share of the JV.

Sembcorp Design and Construction ("the JV partner") is wholly owned by blue chip Sembcorp Industries (U96).

I am currently vested in HLS and will seek to increase my stakes following the announcement. Buy first, analyze later.

Investment Ideas (Jul 2016) - FCL Again??

In May, I shared my investment idea to buy Frasers Centrepoint Ltd (TQ5) here. Today, in July, I am reiterating my confidence in this counter.

Source: shoppingmalls.com.sg

In May:

Current price: 1.64
Expected Dividend yield: 5.2%
Trading plan: Buy and hold long term @ 1.63 & below. Dividend play but will sell if price is right.

Now in July:

Current price: 1.505
Expected Dividend yield: 5.7%Trading plan: Continue buying even if it falls below 1.50.


Reasons:

1. Attractive valuations, i.e. huge discount to NAV.
2. Laggard amidst the recent world equities rally. (FYI, S&P500 futures hit new all time record highs with a gap up, such bullishness...
3. High proportion of recurring income, so dividend strength is better.
4. High dividend yield right now. It is comparable to a Reit, which pays at least 90% of its profits as dividends, but at the same time a growth stock.
5. Low interest rates for debts.

Risks:

1. Hastened interest rate hikes.
2. Property market cooling measures in Singapore not lifted for a long time.

Final verdict

Rewards >>> risks. 

I am also willing to hold through the trough if it falls deeper. Confidence in its dividends yield.

Module Review Year Two Sem 2 (AY2015/16)

Module Title		MC
IE2100	Probability Models with Applications	4
IE2130	Quality Engineering I	4
IE2150	Human Factors Engineering	4
no review	GEM/SS/UEM/Breadth	4
no review	GEM/SS/UEM/Breadth	4
TOTAL		20

This sem in short (I'm lazy...): Not bad but a bit of disappointment that my CAP fell again. I should have expected that, since my aim is to attain Bs. You know... how can Bs pull up CAP?

IE2100 Probability Models with Applications
Part one is about Discrete Time Markov Chain (DTMC) taught by Prof. Ng T.H.. Part two is Continuous-Time Markov Chain taught be Prof. W.B. Haskell.

Webcast >> No
Tutorial >> Yes
Graded assignments >> Yes

• Most students score full marks. The questions are taken from the textbook.

Mid-terms >> Yes

• Most students did better than me.

Finals >> Yes

• The practice papers are very useful to test your understanding.

I am not sure how other students find this module. IMOH, it was quite chill given the workload and my low expectation of myself. Ironically, there is also a time I felt lost and almost give up on studying for IE2100. That was when part two commenced and the idea of poisson process is totally new to me. If you find yourself in the same predicament, you may turn to online resources and the textbook for better understanding. Why not clarify with the prof? I already can't understand his lectures, better luck finding other sources for help.

IE2130 Quality Engineering I
Taught by Prof. Ang B.W.

Textbook is very useful. Final exams is very give chance la, mostly MCQs. However, there is no past year paper with the same format to practice. Just read textbook and make sure you can understand the concepts.

What i think i remember:
Statistical process control, control charts, Xbar-R chart, CP, Cpk, Acceptance sampling, Shewhart, gage R&R...


IE2150 Human Factors Engineering
Taught by Prof. Tham M.P. and Dr Soh B.K. (from DSO).

Group project, midterms, finals, checked.

I think this module does not have a fixed structure every year. For mine, the project is to study a self-sourced problem and apply HFE principles to try solve the problem.

The midterms was a disaster. We were told we will be tested by application questions but most questions were not. The questions are mostly looking for textbook answers. Finals was much better.

Investment Ideas (May 2016) - FCL

Frasers Centrepoint Ltd. (TQ5:SGX)
TQ5 Google finance Summary
Current price: 1.64
Expected Dividend yield: 5.2%
Trading plan: Buy and hold long term @ 1.63 & below. Dividend play but will sell if price is right.

Background
Frasers Centrepoint Ltd ("FCL") is a well-known property developer like Capitaland, famous for its portfolio of sub-urban malls in the North (Northpoint, Causeway Point, etc.).


Why I buy?

1. Exposure to quality reits like frasers centrepoint trust and frasers commercial trust.
2. Stable and sustainable dividends at 5.2%. The management have explicitly made a point that their current strategy is to strengthen recurring  income, which is good news for sustainability of its high dividends. At the same time, FCL will see growth by recycling property developments to its reits.
3. Current valuation at 0.7 Bk NAV is attractive, coupled with strong dividend yield. Personally, these are factors supporting my buy conviction despite the super low public float (amount of shares not held by institutions). Low public float could mean high market spreads and low liquidity. However, I am just a small retail investor who probably would not be affected much by the low liquidity. It is still high enough for me to liquidate my holdings any day.
4. Recently announced new reit to be spun off. It will help FCL to realize true value in its Australian assets.

Disclosure: Already vested below at average cost 1.64, am looking to increase holdings should it fall below 1.60 again. So, if you are new to this counter and current price feels good to you, feel free to go ahead and buy. There is much potential for upside for price. DBS reiterated TP of 2.05 in May. Check out my portfolio at the bottom of this page too, powered by sgxcafe.com.

That's my investment idea this time round, DYODD.

New addition!

Source: todayonline.com

Shared my humble portfolio of SGX counters, it is updated every evening (7 or 8pm). Scroll down all the way to the bottom to see. Enjoy.

Welcome comments and discussions.

Cheers!



Credits to sgxcafe.

ARA Asset Management: Updates from the AGM April 2016

If you have not read my last Investment Idea post, follow the link.

Updates from the latest AGM

Stable business

1. The board of directors are rather confident in the company, some have bought shares recently using their own money.
2. CEO assured that core business is REIT management, which generates recurrent income unless ARA loses position as manager.
3. Has been overperforming in terms of Assets under management (AUM) growth, vision to hit 40 billion AUM in near future, which CEO deem is world-class.

Drivers for growth

1. Trend that money from within South Korea, China and Hong Kong are moving out of  their country for investments. ARA is benefiting from this trend with their private funds set up in these countries.
2. Currently also making progress in Australia using the same strategy.

CEO's reply to query on last rights issue

Image source: forbes.com

1. The funds raise are not to clear debts but expansion.
2. Used as seed capital in REITs and private funds.
3. Seed capital is relatively low at <2% compared to competitors' 4%.
4. If never raise capital, would be to cut dividends.
5. ARA is asset-light company, so does not enjoy easy loans from banks.

Guidance on dividends

Image source: nasdaq.com

1. CEO admits that payout ratio is high but is committed to maintain 5cents per year for dividends.
2. The Board will consider shareholder's suggestion of scrip dividend option, where dividends are paid in terms of shares.

Investment Ideas (April 2016) - ARA

ARA Asset Management (D1R:SGX)
D1R Google finance Summary
Current price: 1.16
Expected Dividend yield: 4.3%
Trading plan: Buy and hold long term @ below 1.10

Background

ARA Asset Management Limited (“ARA”) is a premier integrated real estate fund manager in Asia. It manages familiar names like Suntec Reit.


Why I buy?

1. Gives exposure to reits 
2. Stable and sustainable dividends at $0.05/year 
3. $1.00 is psychological support level. Plus that is also the price of the latest rights issue 
4. Last FY results was a bit of a confidence booster amidst the equities selloff in Dec-Jan.

Disclosure: Already vested below 1.10, am looking to increase holdings should it fall below 1.10 again. So, if you are new to this counter and current price feels good to you, feel free to go ahead and buy. There is much potential for upside for price. DBS set a TP of 1.5X early this year.

That's my investment idea this time round, DYODD.

Investment Ideas (March 2016) - Cache Logistic

Since there isn't that many module reviews to write about, I would post writings on things that I am interested in from time to time. In this post,  I will present a share counter which potentially hold the key to unlocking better rewards than SGD time deposits.

Cache Logistic Trust (K2LU:SGX)

K2LU Google finance Summary

Current price: 0.840

Expected Dividend Yield: >8%

Trading plan: Buy & hold at least 1 year

Why I buy?

I would love to accumulate Cache at below 0.850, especially below 0.830. The dividends for FY16 (this year) is not expected to decline much, meaning the high div yield will provide a strong support for the price in 2016. The REIT acquired new properties in Australia last year which will strengthen the distribution per unit (DPU). In Singapore, it also has a newly developed DHL Supply Chain Centre will increase its revenue. If one is optimistic on global economic performance in 2016, the current price has got to be a bottom. So are you optimistic? Personally, I thought this would be an investment which I will not regret regardless of market upturn or downturn. Meanwhile, I am still in the process of nibbling (did not lump-sum buy) Cache... All in all - fat dividend yield with limited risk.

Any questions?

Leave a comment below. I am not well-equipped to answer "expert questions" but layman discussions would be no problem. Look out for more of my stock picks from this blog in the future!

Caution: Stock market is risky and I am not to be held responsible for any losses incurred as a result of following my trading plan. I am only responsible for my own money, so are you.