Sunday, March 19, 2017

Vested In This Marine Counter!

(I wanted to do an extensive post on this counter. But the sudden rise in its share price make me feel that I should just post what I know first.)

While communicating about investing with my superior over lunch one day, he stated that he was looking at the marine industry as he felt the marine industry has hit a bottom and a turnaround was near.

Although I dismissed this idea straightaway, but I still decided to look through the company in the marine industry to see if I can find any good counters to invest in.

The search led me to Samudera Shipping Line Ltd.
Profile In Short (Taken from Website and 2015 Annual Report)

Samudera Shipping Line Ltd (Samudera) is engaged in the transportation of containerized cargo, gas, liquid and bulk cargo in the Southeast Asia, Indian Subcontinent, as well as the Far East. The Group’s services are offered through three key business segments, namely,
i) Container Shipping;
ii) Bulk and Tanker shipping; and
iii) Freight and Logistics to complement their vast shipping network.

Samudera’s history can be traced back to 1988 when its parent company, Samudera Indonesia Tbk PT (A listed firm in Indonesia), started a feeder service between Jakarta and Singapore. From that humble beginning, Samudera has since developed an extensive network of container shipping services, with offices currently based in Dubai, Mumbai, Kolkata, Chennai, Bangkok, Ho Chi Minh, Klang, Jakarta, Shanghai, and Singapore.

Samudera’s Container Shipping business offers reliable feeder services between its “hub” port in Singapore and other “spoke” ports in Asia, as well as interregional container shipping services to manufacturers, exporters and importers. As part of the Samudera Indonesia Group in Indonesia, Samudera taps the marine and land transportation support capabilities of the parent company, a synergy that allows the Group to provide value-added services to its customers.

Samudera’s operating fleet, which comprises vessels owned by the Group as well as those on operating leases, currently stands at 43. This consists of 30 container vessels, 2 oil tankers, 5 chemical tankers, 2 gas tankers, 2 marine offshore support vessels and 2 dry bulk carriers. The Group continues to renew its fleet by disposing, acquiring and leasing vessels where appropriate.

Based on The Super Scorecard (Based on my entry price of $0.173):

As per above, the counter failed the Super Scorecard. 

So why am I still interested in it?

1. Occupy and own 2 levels of 6 Raffles Quay 

Samudera owns 2 levels of 6 Raffles Quay. These 2 levels should be the "freehold properties" stated within the Properties, Plants and Equipment and the figure is stated at COST at US$6.5 Million.
Taken from Samudera 2015 Annual Report
This is supported by the Samudera's valuebuddies thread as well as an announcement made in 2006.

Based on the article by Asiaone, as per June 2016, 1 level of 6 Raffles Quay has been sold at S$28 Million.

In other words, these freehold properties stated in the PPE should be worth around S$56 Million - estimated to be US$40 Million.

2. Free Cash Flow and Cash Profit Margin

As per the super scorecard, the price to free cash flow is 2.84 times. That is amazing low!


In addition, just look at the Cash Profit Margin as per the picture above. This is due to Samudera having a high depreciation figure yearly due to the number of vessels it has. Thus, its cash profit margin is significantly much higher than its net profit.

3. Hanjin Losses already taken into account

As per announcement, Samudera has already taken into account the losses related to Hanjin bankruptcy. Therefore, this issue will not have a major financial impact on its future financial report.

4. Sold 6 of Their Vessels

In addition to the above Hanjin news, the management has also taken action to reduce the future impact by selling 6 of their vessels.

5. Share Prices at near 52 weeks low as well as near 5 years low


As per the picture above, the share price has dropped significantly. It is currently near 52 weeks low share price and near 5 years low share price. 

6. Owned by Samudera Indonesia Tbk PT 

Samudera Shipping Line Ltd is 65.8% owned by Samudera Indonesia Tbk PT. There is a possibility that the company will continuously to request dividend from Samudera. This will also benefit the minority shareholders. 

Do note that, other than 2010 and 2014, the company has been giving out dividend every year from 2000 to 2016.

7. Oil Prices 

Oil prices has been staying low for the last 2 years. The oil prices should continue to stay low for the next few years. This will continue to assist Samudera to control its expenses, at least, in the next few years.

8. The Alternative Valuation Methods says BUY


But there are also some issues...

1. Revenue has been dropping over the last 5 years

This could be due to the reasons that:
- Container Shipping occupying 80% of the company's revenue for the last 5 years; and
- Indonesia and Singapore occupying 70% of the company's revenue for the last 5 years.

It seems that the downturn of the economy in Singapore and the drop in exports level has affected the revenue. 

Will the revenue go back up? This will really depends on the Singapore economy and exports level.

2. Bulk and Tanker shipping has been on a downtrend.

Despite benefiting from low oil prices, it has also affected the company bulk and tanker shipping. This will also depends on how the management steer the company out of this segment.

In Short

Despite the negativity which may have been significant, I believe Samudera ability to generate high cash profit and free cash flow will reduce the impact of these negativity. Furthermore, if we take into account of the valuation of the 2 levels of 6 Raffles Quay, the net asset value should have been at least 50 cents.

But obviously, my target price is not so high. If the share price manages to reach half of the net asset value, it will be amazing!

Current Price: $0.179 as of 19 March 2017.

Please do your own due diligence before you invest in this stock. 

Do note the author is vested in this counter/company at $0.173. 

Anyway, for those interested in getting and understanding a bit more of the Super Scorecard or my methods of investments, I will be having a short paid seminar on 25th of March. All participants of the seminar will be able to receive the Super Scorecard.

Oh... and do remember, please like our Facebook page (T.U.B Investing) and follow me on InvestingNote.

Saturday, March 11, 2017

1st Sharing Session in 2017

Since the start of the year, STI has rise from 2880 to 3133 in a short space of 3 months. Have you been making gains?

I have been very lucky to make quite a number of gains within this short period.

Managed to sell, as well as buy and sell:
- Wheelock Properties (Singapore) Limited at 10% profit.
- TTJ Holdings Limited at minimum 20% profit.
- Singapore Airlines Limited at 5% profit
- Sing Holdings Limited at about 20% profit
- Sabana REIT at about 20% profit
- Singhaiyi Group Ltd at about 30% profit
- Yongnam Holdings Ltd at about 10% profit (and then I bought again after it dropped!)
- TIH Limited at about 15% profit.

I have also manage to reduce numerous holdings and many of my counters are also in an overall gain position (Currently I am almost 25% to 30% cash).

Other than luck and most probably my past experience, I was also able to make these gains due to some of the new methods that I experimented with. 

Thus, I decided it will be good to conduct a sharing session to elaborate these methods to you! 

Details of the Sharing Session:

Location: At Lavendar (Behind V Hotel at Lavendar)

Date: 25 March 2017 (Saturday)

Timing: 9.30am to 12.30pm.

Price: $20 (via bank transfer. Contact me for account number). Each confirm slot will be given upon the successful bank transfer. 

Participants of this sharing session will be receiving a soft-copy of the Super Scorecard. There will also be a guest speaker explaining on a very interesting topic that day!

Oh... and do remember, please like our Facebook page (T.U.B Investing) and follow me on InvestingNote.

Thursday, March 9, 2017

An Interview with "Wellhandy"

This will be the 3rd interview for the year. So here we have "Wellhandy" as he is known as on InvestingNote platform.

To me, he is more of a TA person because he is always taking about red line, blue line and pink line. For some time, I keep wondering if he is taking about our MRT station (Just kidding!).

Joke aside, as many of you have known, I know nuts about TA or any of the coloured line. This is where Wellhandy has always been helping me along the way. He will give me hints of what to look out for. Every advice has provided me with additional insights of how each counter's share price may move.

Without further ado, let's get straight to the interview questions and "Wellhandy" answers!

1. Tell us more about yourself. 

Wellhandy: I see myself as inclined similarly towards both FA and TA and as a 'buy and hold'er: I buy and hold different things for different periods at different times.

In terms of buying and selling transactions, they are more discretionary leaning towards systematic.
My body of work in technical analysis is well represented when you follow me in investing note.
(https://www.investingnote.com/users/wellhandy#/posts?display=profile&user=wellhandy&tab=posts)

2. How did you get into investing?

Wellhandy: In my early years working, the company I worked for, had a system whereby they matched every share you bought with a bonus share.

It felt like free money.

When I first started, I bought shares on recommendations by analysts. When the prices of shares in the recommendations promptly went the opposite direction of the recommendations, I learnt to be more interested in the details of this particular enterprise (buying and selling of shares).

3. What is your thought process when it comes to investing?

Wellhandy: I don't really think of investing as investing in a company when all we are doing is simply buying and selling shares of a company.

'Investing as Retail investor' is different from 'Running a Business'.
When we run a business, we are responsible for the day-to-day smooth operations of a business.
We literally have to account for each and every entire day to make sure it is well spent and the company is well run and solvent.
We take responsibility for people being employed by our businesses.
We put our reputation on the line for delivery of paid for services.
We answer to all stakeholders.
We pay ourselves a salary from the returns of company and reinvest the rest either back into the company or elsewhere.

When we invest, we are responsible for the decisions of our transactions.
We have to account for each and every buy and sell decision to make sure it is made as properly as we can and that our portfolios has limited risk.
We take no responsibility for people being employed by businesses we have shares in.
We put no reputation on the line for delivery of paid for services by businesses we have shares in.
We try to make the companies answer to us.
We do not receive a salary directly but obtain dividends that the company decides to pay out from the returns.
I leave it to the reader to infer "running your 'investing' as a business".

Profiting from shares as a retail investor is thus different from profiting from business.

I see the share price as a proxy of the market sentiment of the company worth.
It is decided upon by a variety of people: some look at the operations of the companies, some look at the decisions of the companies, some look at the integrity of the companies, some look at the environment affecting the companies, some look at how others look at the companies and so.

In the present, the valuation of the company is what the market is currently willing to pay for it.

When we 'invest', what we want is to increase our networth and that is more directly from what we can get from what we own.
But we can't ignore the fact we may be wrong.

The first order of business in 'investing' is to decide on our risk management; then select the highest profit potential asset class and then buy up to our eyeballs what our risk management allows.
When there is a different asset class that gives more returns faster, we switch to it.

4. What is your best investment and worst investment since you started investing?

Wellhandy: The most used cliche is the best investment is in yourself.
And it happens to be right.
And the worst investments are every moment we slack off in matters of importance and 'pinch pennies' in matters of little consequences.
Ergo, we may be making the worst investments daily.

The most valuable 'cost' in investment terms is time. Time and effort.
There are quite a few millionaires.
There are no immortals.
That tells you everything you need to know about the value of time vs money.

When we put in the time to build the foundations to save our future time, that is the single best investment anyone can make.

Someone once asked me in InvestingNote: How to be more efficient in investing when we are juggling with multiple commitments?

I believe when the foundation is done right, the efficiency flows from there.

This is the same thing throughout life. We mastered walking and suddenly, walking is effortless. We mastered addition of numbers 1 to 10, suddenly we stopped using fingers. We mastered dribbling, suddenly we don't look down while taking the ball across the football field. We mastered work, suddenly we don't have to check references whenever we need to answer a work query.

The list goes on.

Mastery is efficiency.

5. How many stocks do you think one should hold for diversification?

Wellhandy: We have a post in InvestingNote that talks about position sizing. And that to me, along together with risk management, is the answer to number of stocks a person should hold. We should hold as less counters as our risk management allows. That is the short and long answer of it.

Diversification, to me, seems to imply branching out for the sake of variety.
At least, instead of its proper understanding, that is the more commonly used implied meaning.

Diversification, in the above meaning, is nice but it shouldn't really exist for the active 'investor', only the inactive 'investor'.
When we say we want to 'diversify', we should admit that we don't really know what we are doing or we don't know if what we are doing is working.
Because I cannot imagine a kid, in answering to the question "1 + 1 =", giving many answers instead of a single '2'.
(For the prideful, if it hurts our ego to say we don't know or we are wrong, then it helps to say to ourselves, we don't know the future.)

More operationally specific regards to diversification, it is never about the number of stocks a person should hold.

For example, if you hold $STI ETF(ES3), you would be quite diversified for STI stocks.
If you hold $SPDR S&P500 ETF TRUST CDI NPV 1:1(SPY) , you would be quite diversified for S&P 500 stocks.

If you hold Berkshire Hathaway for instance, you would also be plenty diversified.

6. What do you think of short term trading?

Wellhandy: Short term trading is an extremely competitive endeavor (there are some outstanding individuals though). Great if you can make money consistently. Stop doing it if you can't.

What is Trading?
If we break it down and look at the pure mechanics of the actions, it is buy and sell transactions.
How is that different from investing which may also be just buy and sell transactions?

Some will say that in investment, we hold it long enough to derive gains from coupons or dividends.
Then is 'investing' in Berkshire Hathaway not investment?

So it boils down to timeframes and time horizons really.

But what is short term? What is long term? What is normal term?

In eyes of the 'buy and hold forever', most of us are short term traders.
In the scope of infinity, there is no difference between one month and 10 years.
In the scope of a century of stock prices, there is little difference between six months and 1 year.

So further to the point, time horizons and timeframes matter only regards to derivable profits and price changes.

And that also involves costs and charges and opportunity costs.

If a person can competitively make outsized gains from trading the 30min time frame without leverage, I say kudos.

The problem however is costs and risk of blowout.

With costs and risk management in view, most would definitely benefit instead from buying and holding to go for bigger moves as long as it shows good speed of gains.

7. What are your advice for those that are worried about the possible-but-may-never-come crisis?

Wellhandy: Buy/hold half, keep other half in cash, be prepared for less than benchmark gains.
Stay fully invested, with no hedges and predetermined hard stop loss prices, get outsized gains.
Go in and out of the market to time short swings (weeks long or months long) in prices, get lousy/mediocre/outsized gains according to your ability.

8. Finally, any advice for newbie interested to get into investing?

Wellhandy: Be a 'buy and hold'er - stay in the market for extended periods of time.
Read extensively.
Stay open minded.
Be Flexible.
and the advice in https://www.investingnote.com/posts/47950

Hope you like this interview series and please do remember to like our Facebook page (T.U.B Investing) and follow me on InvestingNote.

Friday, March 3, 2017

Counters In My Watchlist

Last weekend, I scouted the whole of SGX for counters to buy. But I eventually only bought 1 counter. In fact I fully sold 3 counters while some of the counters in my portfolio were partially sold.

As stated on my Facebook Page and IN, many of the counters that I came across did not react in the way I expected it to be.

One example was Rowsley Ltd - a Peter Lim company. It made significant HUGE LOSSES in its latest full year financial report. But the share price did not even move decrease. Another similar example was Yongnam Holdings Ltd.

As I always say, "Expect the Unexpected".

Nevertheless, I re-reviewed all the counters on SGX again and I came up with some counters that I intend to purchase. From my lists, these are the more certain targets.

1. Yongnam Holdings Ltd

Prior to its recent profit guidance announcement, I actually bought some of this counter. However, on that day of the profit guidance announcement, I managed to sell all of it for 10% profit due to the short sudden rise.

So now why am I looking at this counter again? The reasons are as follows:

- The share price did not fall drastically after the announcement of the full year results. If you look at the top 20 shareholders as per the annual report 2015, many of the shareholders do not have significant holdings. Thus, this may mean that many of the shareholders are retail investors at a much earlier stage of the company's listing. If they do not sell after so many years, I doubt they will be selling now.

- As per presentation provided by Yongnam, there are quite a few of its projects that will be completed within 2017. These should boosted the revenue for the quarterly reporting for the financial year 2017.

- As per the full year financials of 2016, the company is making gross losses. This meant that cost of goods sold is more than revenue. Since this has happened, it may occur to me that Yongnam already included all the overrun costs in the financial year 2016 and for financial year 2017, we maybe looking at a turnaround.

Decision: At the point of writing, I managed to grab a very small amount of Yongnam. Thus, I will add on more as if the price drops more significantly.

2. Singhaiyi Group Ltd

I have actually made significant gains on this counter at the start of the year. I bought this counter at 97 cents, and sold half at 118 cents and the other half at 135 cents.

However, if you happen to read about my posts on this counter, there are a few significant events that has yet to happen:

- Sold off TripleOne Sommerset Property and will have made significant gain. But this is not yet reported in the financials.

- The first right of refusal for the purchase of OKH Global Ltd will expire on 5th April 2017.

- Full year financials ending March 2017 will be reported in May 2017.

My view is that prior to April 2017, the company will announcement that they will have transfer the rights of OKH Global Ltd to Singhaiyi. The price of Singhaiyi is expected to fall due to this event being viewed as negative. However, price should rise again prior to or after the announcement of the full year financials due to the huge increase in net profit.

Decision: In view of the above, I will watch and see how the whole event unfolds. If the share price drops much more (and creates more buffer between share price and the NAV), I will enter.

3. Starhill Global REIT

Before you read this section, I must first explain that I am not a expert on REITs. But in my view, this is one of the most mis-priced REIT and it is not in the area of commercial spaces or hospitality sectors.

However, there is the pending announcement of the Fed meeting after 15 March. Thus, there is the potential risk of interest rate increment. If interest rate increases, REITs will normally drop in share price due to the debt it holds.

Decision: Will only enter after 15 March 2017 if price did not increase significantly away from 52 weeks low price.

So that is are just some of the counters in my watchlist that I am more certain about how the share price will moves in the short term. Nevertheless, I still have other counters in my watchlist (in fact, there are just too many.) that I did not stated out here as I am still quite unsure of how things may turn out.

Regardless, please do your own due diligence before you invest in any of the stated counter above. 

Do note the author is vested in Yongnam Holdings Ltd at the point of writing. 

For those interested in getting and understanding a bit more of the Super Scorecard, I will be having a short paid seminar on 25th of March. All participants of the seminar will be able to receive the Super Scorecard after that.

Oh... and do remember, please like our Facebook page (T.U.B Investing) and follow me on InvestingNote.

Saturday, February 25, 2017

This Counter Has Managed To Pass The Super Scorecard!

Despite holding onto this counter for almost 1 year, I realised I have yet to blog about this counter. Therefore I shall do a short review on this counter since it has recently released its full year results and its share price has ran up quite a bit.

Furthermore, this counter used to pass the Enhanced Triple S Scorecard with Dividend Scorecard Portion. But now I will be doing the review using the Super Scorecard instead. It will be interesting how this counter reacts to the changes in the Super Scorecard.

Profile In Short

Captii Limited is an investment holding company that operates in the technology and telecommunication businesses in South East Asia, South Asia, the Middle East, Africa, and internationally.

It operates through three segments: Unifiedcomms, GlobeOSS, and Others. It offers content-driven mobile value-added services; mobile messaging and signaling systems, solutions, and managed services; mobile network operation support systems, solutions, and managed services; and venture investment services. The company offers telecommunications, technology, and customized solutions for telecommunications operators, service providers, and enterprises; and research and development, software engineering, system integration, project management, and maintenance and support services for the telecommunications industry. It also offers global roaming quality and service management solutions; and management services, as well as distributes information technology and telecommunications products.

The company was formerly known as Unified Communications Holdings Limited and changed its name to Captii Limited in May 2014.

Captii was founded in 1998 and is based in Singapore. Captii is a subsidiary of Worldwide Matrix Sdn Bhd.

(If you do not know what they really do, it basically state that it provides value-added services for the telecommunication industry.)

Based on The Super Scorecard (Present Price of $0.540 as of 25 Feb 2017):

As per the above pictures, the counter passed the Super Scorecard. 

So what is so good about it?

Pass the Super Scorecard - The fact that, at an even higher price, the counter continues to pass the super scorecard amazed me. This also meant that there is still room for the share price to rise before it fail the Super Scorecard.

High Cash Profit Margin - With the Super Scorecard, I am able to analyse the change in Cash Profit Margin for the last 5 years. The Cash Profit Margin has been able to maintain above 15% for the last 5 years. In addition, the last 2 years has risen above 24%! Amazing! 

No Leverage - For the last few years, Captii does not have any leverage despite the growth!

Increasing Dividend Amount - The company has paid dividend every year and the dividend amount has rise from 0.01 in 2010 to 0.025 in 2016 (There was a share consolidation of 10 for 1 in 2015).

High number of Telecommunication Users - I am not very sure if the company's services are usage-based or contract-based. But the high number of mobile users in South East Asia will have assisted with the growth of the company as well as the demand of its service.

Telecommunication Industry - Most of the customers are major telecommunication companies in each of their respective country within South East Asia. These companies remains profitable and will definitely have the ability to pay Captii when required. Therefore, there will be very low provision for bad debt over the years and its receivables will most probably be collectible within the required time frame.
Taken from http://www.unifiedcomms.com
But there are still some issues such as...

Complicated Business - Rather than being a negative point, this point is to emphasize on the lack of understanding of the company's services that it provides to its clients. Without the full understanding of its services, we may not be able to fully appreciate the services Captii provide to its clients.

High Intangible Amount - The company has a high intangible amount in its non-current asset. If written off, there could be a drastic reduction in its net asset value.

Owned by Malaysia Firm - In my opinion, Singapore investors are not really keen on companies listed in Singapore that is not owned by Singapore companies/Individuals. Captii's major shareholder is a Malaysia firm, Worldwide Matrix Sdn Bhd. Thus, this may have negatively impacted the perception of Captii.

In Short

Since Captii continues to pass the super scorecard at its current price, I will continue to hold on to it and collects its revenue. In my opinion, I believe it has a chance of being the next "PNE Industries Ltd". Do note that I have held PNE Industries for a long time and it has just been rising and rising.

Current Price: $0.540 as of 25 Feb 2017.

Please do your own due diligence before you invest in this stock. 

Do note the author is vested in this counter/company. 

For those interested in getting and understanding a bit more of the Super Scorecard, I will be having a short paid seminar on 25th of March. All participants of the seminar will be able to receive the Super Scorecard after that.

Oh... and do remember, please like our Facebook page (T.U.B Investing) and follow me on InvestingNote.