Thursday, December 31, 2015

The Value Portfolio - Recent Actions and Views - Post 5

I am lucky enough to be in time to post my last blog post in 2015 - A review of my portfolio.

My overall portfolio has not done well - it was down an average of about 5%. However, looking on the bright side, it is still better than how the STI performed over the year.

The following are stocks in my portfolio:

3) PNE Industries Limited
5) LHT Holdings Limited
10) Suntec Real Estate Inv Trust
11) Oversea-Chinese Banking Corporation
12) CH Offshore Ltd
13) Maxi-Cash Financial Services Corp Ltd
14) ST Engineering Ltd
16) PSL Holding Ltd
18) Hock Lian Seng Holding Ltd
19) United Industrial Corporation Ltd

Bought United Industrial Corporation Ltd - This is a surprise addition to my portfolio. It was an asset play and the NAV, based on the 3rd Quarter Results in 2015, was $4.19 vs the price of $2.81 at that point in time, This is a huge discount and I was tempted.

At that time, I am looking for an asset play stock with deep value discount, after missing out on IPC Corp Ltd and its capital reduction payout as the price shot up. 

Then I found United Industrial Corporation Ltd and Second Chance Properties Ltd on 2 separate facebook posts. I decided on United Industrial Corporation Ltd due to the deep discount it has and the debt to equity is much more acceptable for me.

On my previous write ups:

For 2016, as a promotion for the Triple S Scorecard and my online course (should be up in the mid January period), I will be doing more of the company stocks review write up, especially those in my portfolio. 

I hope this will be able to better spread my learning to others via these write ups and people can understand much more about the Triple S Scorecard. Of course, hopefully more people will sign up for the online course too.

If you are interested in my Triple S Scorecard, contact me through my blog or message me on my T.U.B Investing Facebook Page

As for the course, contact us for more details if you are interested.

Do like our facebook page too...

Thursday, December 17, 2015

Rising Interest Rate and A Stronger USD $

On 16 Dec, Fed increases the interest rate in USA. 

In this modern world, this increment in interest rate will eventually cause the Singapore Interest rate to increase as well. There is a whole lot of information on the net explaining this link

This rise in interest rate will also result in a strong USD dollar in future.

So how will this affect the companies in Singapore?

Higher Interest Rates:

1. Those companies that uses leverage to grow will be in for a tough time. Their debt will balloon and they will need to pay higher finance cost.

2. Companies with debts on fixed interest rate will not be affected as much.

3. Companies with huge cashload will gain more interest earning.

4. Companies earning rental from properties that are mortgaged to banks, may have huge opportunity costs. If their actual rental yield is not higher than the yield that can be earned from the safer investment, such as treasury bonds, these companies will lose out.

Higher USD$:

1. If a company's item is sold in USD$, and if the financial reports is in SGD$, it will earn a gain in foreign exchange.

2. On the other hand, if a company's item sold or revenue earned in SGD$, but its financial reports are in USD$, it will report a lose in foreign exchange.

3. Note that many of the Singapore firms sell their items globally or in many countries, but only those that sells their products in USA will tend to gain from a higher USD$ (And if they report in SGD$).

Basically as you can see, many companies will be affected by this interest rate rise and it may be a good thing for them too.

To assist you to find good companies, I have come up with the Triple S Scorecard.

If you are interested in my Triple S Scorecard, contact me through my blog or message me on my T.U.B Investing Facebook Page.

Oh and we will have a online course in the works... contact us for more details if you are interested.

Do like our facebook page too...

Thursday, December 10, 2015

Why The Triple S Scorecard Do Not Have The "ROE" Criteria?

After reading this article from the fifth person, I was wondering if it is the right move to not include the ROE as a criteria.

In my initial Scorecard, I did include an analysis of ROE as a criteria. But I remove it for the Triple S Scorecard because of the chapter 21, Market Consistently Underprices Quality, in Show Me The Money Book 2. It basically states mean reversion of ROE does have over a long time. A good ROE will drop and a bad ROE will rise over a long time. (I maybe wrong in my interpretation).

Nevertheless, the question came to my mind after reading the article from the fifth person.

While researching on ROE, I found that ROE can be broken (or remembered) into the Dupont Analysis.


ROE can be broken into Asset Turnover, Operating Margin and Financial Leverage.

If you remember the criteria in the Scorecard, I emphasize that the I do not want a company to have significant liabilities (total liabilities to equity must be less than 2/3) or have a debt to equity ratio of more than 30%. Therefore, I expected the financial leverage of the firm to be low.

In addition, I expect the profit margin to be at least 5% for a period of time. This will allow the operating margin to be at least 5%.

However, there is no way of knowing Asset Turnover.

In this way, there is no way to know if a company that pass the Triple S Scorecard is a stock with high ROE.

Then, we can also look at another formula - ROE / PB

This formula is emphasize as the magic formula in Chapter 9, The "Magic Formula" Still Works, in Show Me The Money Book 2. The chapter stated that a stock that has a high score in this formula will most probably rise within a year.

In addition, this formula is also explained as - ROE / PB = Earning Yields = 1 / PE

With the above explanation, although Triple S Scorecard do not have ROE, but it calculates PB, PE and Earning Yields. It require PB and PE to be low, while Earning Yields to be high in order to score points.

Thus, if the ratios score its respective points, it will mean that ROE for that company should be high, or at least should be of a certain amount that is above the average.

In conclusion, with the breakdown of the 2 formulas above, we can safety assume that a company that pass the Triple S Scorecard has high ROE. With this conclusion, I will not be putting any additional criteria for ROE in the Triple S Scorecard.

To assist you to find good companies, I have come up with the Triple S Scorecard.

If you are interested in my Triple S Scorecard, contact me through my blog or message me on my T.U.B Investing Facebook Page.

Oh and we will have a online course in the works... contact us for more details if you are interested.

Do like our facebook page too...

Monday, December 7, 2015

Recent Views on Investment Environment (As of 07 Dec 2015)

It's been a while since I did a write up on the investment environment.

So far...I only have 1 word for it - BAD.

This conclusion is formed due to 1 reason - The Oil Price Is Still Falling.

This is mainly due to supply and demand factors:

1. Oversupply due to USA increasing its shale oil output and other oil production. Thus, the usual suppliers like Saudi Arabia start to sell to Asian powerhouse instead. 

2. Instead of cutting supplies like usual, OPEC is trying to defend the market share instead oil price. Further increasing the supply of oil.

3. Increase of the use of alternative energy sources. So lesser countries will use oil as a source of energy.

4. With the increase in supply, demand remains the same. So the price keep falling.

So how has that affected the world?

1. With the oil export dependent countries having deficit, their sovereign wealth funds have withdrawn money from asset managers. (Read news

2. With this withdrawal of funds, shares have not been very volatile. 

3. Oil services companies have been having lesser jobs. Many of them have a poor 3rd quarter results.

4. Delays in oil rigs. The spat between Sembcorp Marine and Marco Polo is out in the world for everyone to see.

The world has been very unstable from the ripple effect from this falling oil prices.

Couple by the other factors such as falling property prices, falling commodity prices  and falling freight price, the world is really in a mess.

To emphasis this point, recently I heard rumors that there are many 2nd hand Oil Rigs around the world that are selling much cheaper than a new oil rig. A new oil rig is about $200 million. A used one is only about $50 million. In this market, why will people want to pay more for an oil rig? I even heard someone said Gulf zone is a graveyard for oil rigs.

Anyway the above are just hearsays without facts. However, rumors must always start somewhere and there maybe some facts in it.

Furthermore, many offshore services are going into bankruptcy. (Read news here)

There are no "only losers" in an industry. The Asian Refinery seem to be the winners here. User of oil  are also the winner as the price goes lower. (Read news here).

On the other hand, with the money supply increasing (Euro-zone is still doing QE), there must be a place where the money is parked - Do remember money is a flowing commodities, unless people started to save them in banks.

The losses in the oil and gas market seem to have shifted to the IT Industry.

It seems like there maybe a bubble growing within the IT Industry as stated by value edge.

A discussion with my friends concluded that IT companies actually has "Nothing". They do not have fixed assets to sustain the share price. Furthermore, many IT Companies are dependent on their employees. If the employee leaves, the IT company may just lose its edge.

In Short

The downfall of the oil and gas industries has created a bad investment environment currently. You will most probably be sitting on some paper losses within your portfolio if you are an long term investor (If you are a trader, hopefully you had actual gains). Therefore, I suggest that if you should continue to invest, do pick those companies that has a good viable business model and a strong balance sheet to ensure that they can endure the tough times.

Oh... and the next Feb meeting is on the 15 / 16 Dec... Be prepared.

To assist you to find good companies, I have come up with the Triple S Scorecard.

If you are interested in my "Triple S" scorecard, contact me through my blog or message me on my T.U.B Investing Facebook Page.

Oh and we will have a online course in the works... contact us for more details if you are interested.

Do like our facebook page too...

Thursday, December 3, 2015

Leisure Reading Articles for the Singapore Strategy in 2016

Sorry for the lack of articles lately as I am preparing for the course and have been busy too...

This post is just informing you that I have 4 articles from the banks on hand:

 - Credit Suisse Asia Pacific Strategy for 2016

- OCBC Investment Research on Singapore Strategy for 2016

- RHB Singaore Smart Nation Article

- RHB Singapore Strategy for 2016

If you are interested in all the 4 articles, do email me at theuniquebunch@gmail.com or use the email contact box beside this post.

Nonetheless, these articles are public information and you can find on the web.

These articles are just for leisure reading purposes and I am not endorsing their views in the paper. Please still do your own due diligence.

If you are interested in my "Triple S" scorecard, contact me through my blog or message me on my T.U.B Investing Facebook Page.

Oh and we will have a online course up soon... contact us for more details if you are interested.

Do like our facebook page too...

Saturday, November 28, 2015

Accordia Golf Trust - The Next Post

The reaction to my first post about Accordia Golf Trust was great.

Here are some of the comments I received:

"I dont think the calculation for the dividends is correct. I think you are taking trailing 9 months plus 6 months"

"Going forward, the FY16 DPU may drop to 4.64c..."

"Q3 is low season (winter)... and Q4 make up the balance. This is probably the 'worst' case scenario."

"Oct number is quite high. 554k visitors. 2nd highest for year so far. So maybe no need to be too pessimistic also."

"Sounds about just right. I was forecasting more than 10% yield when i entered at 64 cents back then. 8.9% for such a unique foreign reit doesnt seem to be compensate enough for the risk."

Numbers for the Trust:

15 Months - Total Dividend given = 0.0571 + 0.0232 = 0.0803

Annualized Amount - 0.0803 / 15 x 12 = 0.06424

Dividend Yield (based on my average price of 0.719) - 8.93%

Based on latest 6 months dividend - 0.0232

Annualized Amount - 0.0232 x 2 = 0.0464

Dividend Yield (based on my average price of 0.719) - 6.45%

Current Price - Dropped to 0.570 within 1 day.

Dividend Yield (Based on 0.0464) - 8.14%

My view:

I still stand by what I said before. This company was bought for income collection. Although dividend yield is not significantly high like 10%, but it is still above my expectation and I can bear with it.

Furthermore, I am still relatively liquid and the opportunity cost is not high. Nevertheless, Market condition is weak now and the trust's price may fall even further.

I will still give the trust some more time and may even add more in the near future.

If you are interested in my "Triple S" scorecard, contact me through my blog or message me on my T.U.B Investing Facebook Page. (psst, we have change the name to "Triple S", which mean Sg Stock Scorecard...) 

Oh and we will have a online course up soon... contact us for more details if you are interested.

Do like our facebook page too...

Thursday, November 26, 2015

Accordia Golf Trust - Can Dividend Yield Be Maintain?

Update: Dividend is given out on a 15 months basis. So the total dividend should be 0.0803/15x12 = 0.06424.

I am currently sitting on a big paper loss on Accordia Golf Trust due to its continuous fall in price.

My average price is around 0.719 and the current price is 0.590.

I bought this stock mainly for the dividend yield and the price has fallen quite a bit since the IPO. Furthermore, I feel that its business is great. There will always be people playing golf and the business will not be gone in a while.

So I am very confused if I should continue to hold on to them?

After some thinking... this is my conclusion...

1. I bought the stock mainly for dividend yield - My dividend yield this year is 8.93% (0.06424/0.719). WOW!

2. Dividend Stocks do not become a "falling knife", esp in Singapore, if it can maintain a certain yield. Singaporeans love Dividend Stocks.

3. In the long run, if the dividend do not drop drastically, the price will stabilized eventually and the dividend will be able to cover my differences. In the longer run, this stock will become a "champion" in my portfolio if the business model does not change and the dividend yield can be maintain.

So, in short, I will not be selling them and neither will I be averaging down YET.

If you are interested in my scorecard, contact me through my blog or message me on my T.U.B Investing Facebook Page. (psst, we have change the name to "Triple S", which mean Sg Stock Scorecard...) 

Oh and we will have a course soon... contact us for more details if you are interested.

Do like our facebook page too...

Sunday, November 22, 2015

"The Market Is Irrational"

I had a chat with a reader recently.

He finds it very hard to invest in Singapore Stocks, because the stock prices does not move according to the expected reaction of the news.

Some examples he quoted are:

1. Interest Rate Hike in the coming December - The day the fed gave strong hints that there will be interest rate hike in coming December, all stocks rise the next day. Why? (He expected the stocks to drop).

2. US$ strength will impact on commodities stocks - But the stocks will rise instead at times. Why?

3. Company report good financials but the stock price hardly move. Why?

I gave him a few reasons why the stocks move differently. However, after thinking it through, the only thing I believe is true is "The Market Is Irrational".

This is because the market is make up of 3 different types of "players" - BBs, Traders and Investors.

For BBs, you will never know why they buy or sell a stock unless you know the people inside.

For Traders, they look at momentum and signals in the change in Stock Price. Nothing to do with fundamental analysis. From the facebook groups I am in, I realised there are many traders out there. Sometimes enough to move the stock price significantly, esp for an inactive stock.

For Investors, they look at fundamentals analysis, and sometimes, the news. They may ignore quarterly movement and look for catalyst within the company. They believe they own part of the company and look at the long term view of the business.

Since we have no idea what the BBs intends to do, and they have the most cash to move the market, we can only assume that our view has only a 50% probability chance in being correct.

In addition, if you think more in-depth, news are sometimes propaganda. News are created by people who wants you to believe in a certain way or to influence you to see in a certain way, especially additional comments from the broker houses, banks, etc.

Even financial bloggers like me can be sort of an "influencer".

Another factor is that you have to look at the "popularity" of the particular stock as well. An unknown stock will not move much even if they announced good results. They will need a much bigger push factors to move its stock price (Read here for more views).

Therefore, in short, I believe every person that intends to invest/trade in the market must have their own views. Furthermore, if you are an investor:

1. You have to look more in-depth in the company you intend to invest and
2. Whether you believe in their business.
3. You have to be more micro than marco.
4. You also have to look into the long term of the business.
5. Lastly, if the stock don't move even if there is positive news, do not be despair. Unless you no longer believe in your views, hold on to your positions.

If you are interested in my scorecard, contact me through my blog or message me on my T.U.B Investing Facebook Page. (psst, we are changing our scorecard name because my friend said it was too subjective...) 

Oh and we will have a course soon... contact us for more details if you are interested. Do like our facebook page too...

The Value Portfolio - Recent Actions and Views - Post 4

Another update on my portfolio:

1) ISDN Holding Limited + Post 2
2) Sin Ghee Huat Corporation Limited
3) PNE Industries Limited
4) Chuan Hup Holding Limited
5) LHT Holdings Limited
6) TTJ Holdings Limited
7) Accordia Golf Trust
8) Singapore Telecommunications Limited
9) Sapphire Corporation Limited
10) Suntec Real Estate Inv Trust
11) Oversea-Chinese Banking Corporation
12) CH Offshore Ltd
13) Maxi-Cash Financial Services Corp Ltd
14) ST Engineering Ltd
15) Bukit Sembawang Estates Ltd + Post 2
16) PSL Holding Ltd
17) M1 Limited
18) Hock Lian Seng Holding Ltd

Delist Macquarie International Infrastructure Fund - This fund was delisted completely as stated in my post previously.

Bought PSL Holding Ltd - The company is going through restructuring and its net current asset value is significantly higher than the current price, This restructuring will be the catalyst for the future rise in price (hopefully). Take this as a punt.

Bought M1 Limited - Yes, I bought back the company I sold in Sep 2015. This is just the contrarian thought I had when the stock price keep going down. After reading a few articles of the 4th Telco, it seems that the effect of the 4th Telco will only take effect in another 2 or 3 years time and a maximum loss of revenue could only be 10% to 15%. I believe M1 is taking action to change its revenue stream as it seems to be divesting overseas slowly.  

Bought Hock Lian Seng Holding Ltd - Construction is a bad industry to be in now. But Hock Lian Seng is the gem in this industry now. A lot of Cash, high order book of civil project, consistently high profit margin and its property development project is still being sold well. Had it previously as it stayed stagnent. Decided to buy them again lately. Bought it slightly before its 3rd Quarter announcement. Maybe will write an in-depth article on it in future.

Previous Post: The Value Portfolio - Recent Actions and Views - Post 3
Previous Post: The Value Portfolio - Recent Actions and Views - Post 2
Previous Post: The Value Portfolio - Recent Actions and Views

If you are interested in my scorecard, contact me through my blog or message me on my T.U.B Investing Facebook Page. (psst, we are changing our scorecard name because my friend said it was too subjective...) 

Oh and we will have a course soon... contact us for more details if you are interested.

Do like our facebook page too...

Wednesday, November 18, 2015

Triple S Scorecard (Previously named as V Scorecard)

Warning: This will be an extremely long post.

Updated: The Scorecard has been rename from "V Scorecard" to "Triple S Scorecard"

After 1 month of reading plus 2 weeks of using my "after office hours free time", I managed to create my new value scorecard - which I renamed as "V Scorecard" (sounds more atas right?).

This idea came about because I felt my previous scorecard is not complete and focused more on earnings than balance sheet (which is not really in line with value investing).

I wanted to do some coaching as well, so I felt a more informative scorecard is required (not that I think I am super good. My portfolio is down about 5% in general this year.).

I also realized the previous scorecard is also quite tedious on retrieving information and lazy people will be turned off by it. Thus, a more informative scorecard with minimal input is sought after.

Information which I gather from, for the V scorecard, was stated in my previous post

The Flow Of V Scorecard

V Scorecard is split into different sessions.

The first session is a list of subjective questions. If you are able to answer the 8 questions correctly, then you can proceed to the next session.

The second session will be for you to input the necessary information.

Then, V Scorecard will determine if your stock is a Penny (Below $150 Million Market Cap) or Not a Penny Stock (Above $150 Million Market Cap).

After that, V Scorecard will test the strength of the company's Balance Sheet (as explained in Section B below). If the company is a Penny Stock and get less than 6 points for this part, then it will fail the test. If it gets more than 6 points, it will proceed to Section C.

If the company is deem not a Penny Stock, it will proceed directly to Section C.

Section C will test the strength of the earning ability of the company.

Then, V Scorecard will total up the points and if the stock achieve a high score of 10 or above, it will be deem as a Value Stock (With a maximum of 15 points). 


V Scorecard will also help to tabulate the selling price for the stock via 3 different ratios (Price to Book, Price to Earning and Price to Sales). This is new and I find very helpful for myself as I have a rough gauge of the price that I should sell the stock. 

However, user should also exercise caution when they intent to base their decisions on these selling prices. These selling prices are just indicators, similar to those in analyst reports. Absolute faith should not be placed in these numbers.

Section B

1. Net Current Asset Value should be higher than Share Price.
- Based on Benjamin Graham Criteria
2. Net Asset Value must be higher than Share Price.
- In my own opinion, Shares in Singapore Stock will be priced at a lower price than its NAV.
3. Cash as a % of Current Assets must be more than 40%
- In my opinion, having more cash will allow the company to endure through tough times and the ability to create more value in future (M&A, Increase Dividend, Buy machines, etc)
4. Current Ratio must be more than 2
- Based on Benjamin Graham Criteria
5. Total Liabilities to 2/3 Tangible Book Value must be less than 1
- Based on Benjamin Graham Criteria
6. Debt to Tangible Book Value must be less than 30%
- Based on Net Net Hunter
7. Dividend Yield must be more than 3%
- Enhanced View of a combination of Benjamin Graham Criteria and my own opinion
8. Dividend Payout must be less than 80% for 2 of the last 3 years
- In my opinion, a company must be able to sustain dividend payment without paying off all their net profit. Excess profit will eventually be deem as assets and increase its Net Current Asset Value.
9. Dividend Yield to Price to Book must be below 7.8 (Highest 20%)
- Based on Show Me The Money Book 

Section C

10. Trailing Earning Yield must be above 2 times of the AAA Bond Yield
- Based on Benjamin Graham Criteria
11. Profit Margin for the last 5 years must be at least 5% for at least 4 out of the 5 years
- In my opinion, a company must be able to sustain a minimum of 5% for a pro-long period to show its earning capabilities.
12. 5 year Average Price to Earning Ratio must be below 10
- Based on Value Investing: Tools and Technique for Intelligent Investment by James Moniter
13. Price to Trailing 1 Year Sales must be below 1.5
- Based on Value Investing: Tools and Technique for Intelligent Investment by James Moniter
14. Current Trailing Price to Earning Ratio must be below 8 (lowest 20%)
- Based on Show Me The Money Book 

Back Test on Stocks from 2013 and 2014

After reading the Show Me The Money book, I decided to do a back test on the criteria of V Scorecard.

I intend to pick out the stocks that pass the stated criteria during the Nov 2013 to Nov 2015 period. From there, I will find out which of these stocks that passed the criteria, had actually increased in price over the period of 1 year and 2 years. Then the probability of a stock that pass the V Scorecard, and will also increase in its stock price, will be tabulated.

A maximum of 2 year period is chosen because in the Show Me The Money Book, there is an article that states that Value will be unlocked or tend to appear after 2 years.

Due to the heavy workload, I will only be testing only part of the criteria.

With the help from Stockflock.co, I am able to retrieve the stocks that pass the following criteria:

1. Current Ratio more than 2
2. Total Liabilities to Equity is less than 0.65
3. Quick Ratio more than 1 (An indicative that Current Assets have significant Cash)
4. Must have dividend the previous year

For 2013 - 92 stocks passed
For 2014 - 99 stocks passed


Based on the result above, the observation are:

1. 54 stocks (out of 92 stocks) price has increase from Nov 2013 till Nov 2014 (1 year period). This is about 58.7% of the total stocks that passed the 4 criteria.

2. 47 stocks (out of 92 stocks) price has increase at least 5% from Nov 2013 till Nov 2014 (1 year period). This is about 51.09% of the total stocks that passed the 4 criteria.

3. 38 stocks (out of 92 stocks) price has increase at least 10% from Nov 2013 till Nov 2014 (1 year period). This is about 41.3% of the total stocks that passed the 4 criteria.

4. 38 stocks (out of 99 stocks) price has increase from Nov 2014 till Nov 2015 (1 year period). This is about 38.38% of the total stocks that passed the 4 criteria.

5. 33 stocks (out of 99 stocks) price has increase at least 5% from Nov 2014 till Nov 2015 (1 year period). This is about 33.33% of the total stocks that passed the 4 criteria.

6. 28 stocks (out of 99 stocks) price has increase at least 10% from Nov 2014 till Nov 2015 (1 year period). This is about 28.28% of the total stocks that passed the 4 criteria

But if we look at a period of 2 years (from Nov 2013 to Nov 2015)

7. 49 stocks (out of 92 stocks) price has increase over the 2 year period. This is about 53.26% of the total stocks that passed the 4 criteria.

8. 41 stocks (out of 92 stocks) price has increase at least 5% over the 2 year period. This is about 44.57% of the total stocks that passed the 4 criteria.

9. 38 stocks (out of 92 stocks) price has increase at least 10% over the 2 year period. This is about 41.30% of the total stocks that passed the 4 criteria.

In addition, I decided to add a criteria - Dividend Yield to be at least 3% that year.

For 2013 - 63 stocks passed the 5 Criteria
For 2014 - 64 stocks passed the 5 Criteria


Based on the table above, the observation are:

1. 41 stocks (out of 63 stocks) price has increase from Nov 2013 till Nov 2014 (1 year period). This is about 65.08% of the total stocks that passed the 5 criteria.

2. 35 stocks (out of 63 stocks) price has increase at least 5% from Nov 2013 till Nov 2014 (1 year period). This is about 55.56% of the total stocks that passed the 5 criteria.

3. 27 stocks (out of 63 stocks) price has increase at least 10% from Nov 2013 till Nov 2014 (1 year period). This is about 42.86% of the total stocks that passed the 5 criteria.

4. 29 stocks (out of 64 stocks) price has increase from Nov 2014 till Nov 2015 (1 year period). This is about 45.31% of the total stocks that passed the 5 criteria.

5. 25 stocks (out of 64 stocks) price has increase at least 5% from Nov 2014 till Nov 2015 (1 year period). This is about 39.06% of the total stocks that passed the 5 criteria.

6. 20 stocks (out of 64 stocks) price has increase at least 10% from Nov 2014 till Nov 2015 (1 year period). This is about 31.25% of the total stocks that passed the 5 criteria

If we look at a period of 2 years (from Nov 2013 to Nov 2015)

7. 37 stocks (out of 63 stocks) price has increase over the 2 year period. This is about 58.73% of the total stocks that passed the 5 criteria.

8. 30 stocks (out of 63 stocks) price has increase at least 5% over the 2 year period. This is about 47.62% of the total stocks that passed the 5 criteria.

9. 27 stocks (out of 63 stocks) price has increase at least 10% over the 2 year period. This is about 42.86% of the total stocks that passed the 5 criteria.

From the above, in conclusion, it can be deduced:

1. If a stock pass more criteria, it will have a higher probability that the price will increase
2. Share prices in 2014 has significantly increased from 2013 level.
3. The period in 2015 when STI fell significantly has lowered the probability for the 1 year period from 2014 to 2015.
4. The longer you hold a fundamentally strong stock, the higher the probability you will be able to sell it at a profit.
5. There is generally a 50% chance the stock will rise within 2 years if it pass these criteria.
6. Even if the stock only increase by a mere $0.01 over a period of 2 years, the dividend that the stock may produce will still tend to give you 3% return a year.

(Note that no transaction cost is taken into account for the calculation above.)

In short, I believe using fundamental analysis, such as the V Scorecard, is better than not using anything to analyze a company's financials before buying it. Although it does not guarantee every stock to be a winning investment, but it still give you a higher chance that you will gain eventually.

Preliminary Stocks Analysis

Chuan Hup Holding Ltd - Still remains a Value Stock based on 1st Q results for 2016 and price of 0.305. Had a score of 10. However, do note that it remains a concern that the company have heavy investment in Australian Properties. Write downs are still possible. Nevertheless, the fundamentals of the company is strong due to its subsidiary PCI. Will most probably add to my position if the price continue to fall.

TTJ Holdings Ltd - Still remains a Value Stock based on 4th Q results in 2015 at price of 0.395. Had a score of 10. Another update should be done after Ex-Dividend Date.

Powermatic Data Systems Ltd and Hong Fok Corp Ltd - Both receive a score of 7 and did not qualify as a Value Stock at the current price. Both company are VERY asset rich. But as V Scorecard requires a reduction of revaluation or fair gain in the asset from the net profit, this significantly reduces the earning abilities of the companies.

Please do remember that V Scorecard will only provide the quantitative aspects of the company. It is still important to review the qualitative aspects of it as well. A review of the company as a whole is very important.

Finally, regardless what the V Scorecard tells you, you still have to do your own due diligence and your own views.

A friend once said, my strength is in screening of stocks, not finding the winning investment.

Interested - Message/Comment on the Facebook post or this post below

As stated, I will like to start coaching/guiding/spreading my knowledge to others. The course will consist mainly around the V Scorecard on the way to use it accordingly to your own knowledge and experience.

No details have been set. But if you are interested, just message or comment in the Facebook post or this blog post below and I will contact you accordingly. 

I will also not be forgetting my existing users of the previous scorecard. I will send it to you by this Friday.

For new users who are interested in the V Scorecard, do just contact me via email, Facebook or this blog. I will send you accordingly.

Oh...and help me like my Facebook Page - T.U.B Investing.

Sunday, November 8, 2015

New Value Stock Scorecard - An Update

Hi all,

I have finished part of the job - finding the criteria for all the new value stock scorecard and creating in a hardcopy excel file (with part of the formulas done).

The criteria is gathered from:

 - Show me the money book 1 and book 2 by Teh Hooi Ling.

 - Value Investing: Tools and Techniques for Intelligent Investment by James Montier.

 - Investment Moats Post

 - Net Net Hunter Scorecard

 - Valuewalk Post

But I have yet to test it against any shares. Thus, without knowing if it will work, I will not be sending out any scorecard to you.

Hopefully I will be sending you by end of the week.

If you have any stocks you like to me test, comment below!


Wednesday, November 4, 2015

A Case of Winning and Miss Opportunity

I know I am suppose to be on hiatus but I felt I had to write about this.

While everyone is looking at Saizen REIT, First REIT and Jumbo IPO, I will be telling you about 2 "Unknowns" and how it has affected me.

Firstly I must say the post by AK about Saizen Reit is very good. The post by Brian on  First Reit was a very good piece of analysis. As for Jumbo IPO, I really like this analysis from investment moats.

Anyway back to the unknowns...

The first one was a case of being too particular with the dollars and cents and missing out.

Have you heard of Zagro Asia Ltd?

One of my friend that I was trying to tell this story to last night ask me, "Zagro WHAT?"

This company is one that manufacture and distribute healthcare products for livestock, poultry, aquatic animals and crops. 

If you are scratching your head, I can understand. Yes, these companies exist.

To cut the story short, my screening caught this stock and I went deeper into it. I found that it has a great balance sheet, profit margin, ROE, etc.

But its NCAV is 0.220 and the price was 0.245 (at that time) during Sep. Therefore thinking that there is room to drop another 0.005 to 0.01, i decided to place this stock on my watchlist.

I have been trying to get it in Oct but in vain. Eventually, on 3 Nov, before announcing the 3rd quarter results, the stock decided to delist itself at 0.300.

I cannot believe I missed such a great opportunity. Sometimes, I really wonder if we should really be so stubborn on our value investing views - especially for the Singapore Market.

On the contrary, we can always tell ourselves - other opportunities will come. (An update is that the minority holders think this is a low ball offer and will vote against it. Read it at value buddies forum.)

The 2nd case is on - not being stubborn on value investing views, or as AK say "Casino" portion.

This is on Sapphire Holdings Ltd. It was bought up initially by a friend and my mind was "Sapphire WHAT?".

This company, as described by the website, engaged in the mining services business and investment holding following its recent plan to exit the steel business. 

BUT it is no longer in mining business as well after a $150 million write off.

It is going into infrastructure building - buying a China land transport builder company (Read Here).

Basically it financials is very bad. If without prompting by my friend, I will have ignore it.

In short, I bought it at 0.084 as a turnaround company stock and hoping for a bit of luck - AND ALSO A SMALL POSITION.

To me, its very weird why such a small company is able to acquire such a big company with at least $400 million order book. My view is there are external forces at work - things we don't know.

Buying this stock is against my principals and a very big risk.

But its not like I never did these risk investing before - the strategy is to go in with a VERY small position WITH STOP LOSS PRICE and readily to accept ALL LOSE as well.

Anyway now the price is at 0.115 as of 3 Nov and I am glad my risk investing took off.

Finally this is not a post about which stock is good and which is bad. It is also not about telling you to buy any stock.

It is to point back to my previous post of "Unknowns". Do not be afraid of them. Rather find out more about them before you commit. Make calculated risks "bets".

PS: if you intend to invest in any of the stock above, please do your own due diligence.

Sunday, November 1, 2015

Hiatus till 8 Nov ~ On a Mission

I am on a mission to make a better Value Stock Scorecard.

After reading "Show Me The Money", I will be taking a break to make major changes to The Value Stock Scorecard.

All those that had requested for my Value Scorecard previously will be automatically sent a new copy.

I will also review if my previous stock are still value stock.

Hope to have a more powerful scorecard catered for Singapore Stocks.

Monday, October 26, 2015

"Unknown"

I remember my friend making this remark many years ago.

"..I believe that the best stocks are those that nobody has written about it..."

At that point, I was looking at Colex and it was trading between 0.150 to 0.155.

That night, I went home and checked if anyone had talk about Colex and I found none, at least nothing recent that point.

The next day, I told my friend that Colex seems to be such a stock. Thus, he got it the next day (I miss it cause I wanted to get it at a lower price..lower than my friend).

Source: Yahoo Finance

Now Colex is at 0.310 and I regretted it badly.

Thus, this emphasize on the point that "Unknown" stocks are not bad stocks. They are just not popular enough for people to talk about it. In value investing, it can also be deem as a ugly stock that nobody want to touch or noone cares. But eventually it will be pick up by value investors.

It should also be noted that we should not invest solely based on the stock is an "Unknown". We should still look at its business model and financials.

Colex is not the only unknown I have encountered. Many others have since also rise in their stock prices.

In short, what is not popular may not be a bad stock, what is popular may not be a good stock.

Sunday, October 25, 2015

Perception of Brands

After reading this article by Value Edge, it made me think about all the lower perceptions brands in Singapore.

While walking along Orchard Road, I came up with a list:

1. Bata (vs Charles & Keith, Pedro)
2. Bossini (vs Giodarno)
3. Giodarno (vs Top Shop)
4. OG (vs Isetan, Takashimaya)
5. City Chain (vs The Hour Glass)
6. Yoshinoya (vs Mcdonalds)
7. Burger King (vs Mcdonalds)

Other than looking at the brands, I believe we should also looked into the products. A mass-market product will definitely be better than a niche market product as their target market is bigger (Burger King vs City Chain) - Read Post.

Next, we should check if the brand has some sort of popularity in Singapore. A lower perceived brand may not mean it has lower sales (Giodarno and Bata). 

If the brand is popular, we should review if these brands have any sort of competitive edge to keep the crowd from coming back (Bata).

Cash sales is also better than instalment plans sales or receivable sales. For receivable sales, such as pre-booking of products, will given clients the opportunity to back out. For instalment plans sales, such as jewellery, clients may want to have some sort of discount or the company may need to provide more fees to the banks, therefore reducing its profit margin. 

Lastly, we should still drill into the financials. Not all lower perceived brands are value stocks.

On the other hand, Singapore is actually a small market and the popularity shown here may not be indicative of their popularity around the world. Most of these brands are also not created in Singapore, thus these brands focus may not be in Singapore (Unlike Charles and Keith). 

In short, other than just looking at lower perceived brands, we should also look at; 
  • Products;
  • Popularity;
  • Competitive Edge;
  • Cash Sales;
  • Financials;
before we can conclude they are value stocks.

At the end of the day, sudden popularity may not last. Creating a legacy is more important.

PS: Most of the brands stated above are not listed companies in SGX.

Saturday, October 24, 2015

Investing will lose money?

Last Wednesday, I overheard a conversation  that the superior was discussing the subordinate that investing will lose money.

When someone that was expected to be respected, pass some "stereotype" information to those that looks up to him, it really makes me boils being an investor and trying my best to spread what I knew.

In my opinion, this was a very wrong way of passing information and it is over-generalization of the stock market.

If you do not know how to invest in the stock market, please do not spread your "knowledge" like this.

Although there are many instances that people were "cheated" and loss a lot of money, but there are also many famous and successful investors around the world and I am not talking about Warren Buffet or George Soros or Charlie Munger.

I am talking about locals such as bloggers like Assi AK, 3Fs, Dividend Warrior and Ken'ichi. All successful in their own ways.

There are also courses by Bigfatpurse or The fifth person that teaches people how to invest in the right way.

In other instances, where people were cheated, were situations when their Greed took over and believe in the "High returns" scams. Those are not investment.

If you intend to do this, I rather you spend the money on 4D or Toto or even soccer betting. The probability of gaining back is higher. In addition, you will be doing "good" as well - Because Singapore Pools/Tote Board still makes regular donations to charities. (You get my point right?) 

Even with my little knowledge in investing, I will not promise you the high returns. (I normally tell people put only money you expect to lose and expect the most, a 10% return).

At the end of the day, please do not spread information like this if you do not know. I prefer/rather you say you do not know and get the person to find out information on their own.

Investing is a long journey. You will need to learn and find out on your own eventually. There are so many information on the net nowsadays. It's only a click away.



Sunday, October 18, 2015

The Value Portfolio - Recent Actions and Views - Post 3

Just Short Update on My Portfolio:

1) ISDN Holding Limited + Post 2
2) Sin Ghee Huat Corporation Limited
3) PNE Industries Limited
4) Chuan Hup Holding Limited
5) LHT Holdings Limited
6) TTJ Holdings Limited
7) Accordia Golf Trust
8) Singapore Telecommunications Limited
9) Sapphire Corporation Limited
10) Macquarie International Infrastructure Fund
11) Suntec Real Estate Inv Trust
12) Oversea-Chinese Banking Corporation
13) CH Offshore Ltd
14) Maxi-Cash Financial Services Corp Ltd
15) ST Engineering Ltd - Sorry, yet to write anything.
16) Bukit Sembawang Estates Ltd + Post 2

Sold SembCorp Industries Ltd - I decided to sell because I am unsure of the progress of the oil industry (although there are news that it may be stabling soon) and from its recent release of results, the impact is greater than expected. The rise in profit of the utilities and waste management business will not be able to cover any drop in profit sustained from the marine side of business in 2016. Eventually the dividend may drop and the share price may follow. Thus, selling this stock may seem to be a right choice now. A re-entry maybe on the cards in future if the stock price drops significantly. A point to note is that I managed to purchase the stock at $3.12 per share to average down.

Bought Bukit Sembawang Estates Ltd - Do read my posts on this stock to understand why I believe this is a good purchase.

Previous Post: The Value Portfolio - Recent Actions and Views - Post 2
Previous Post: The Value Portfolio - Recent Actions and Views

The Effects of Qualifying Certificates Regulation on Bukit Sembawang Estates Limited

Do you know of the Qualifying Certificates Rules set for Developers?

When I purchased Bukit Sembawang Estates Limited (Read my previous post), it didn't occur to me that this was a major thing. I heard about it but my overconfidence "stop" me from finding out more. Thus, this was my mistake.

Nevertheless, over my course of work, I had to research into this topic and realise THIS IS A BIG ISSUE FOR DEVELOPER COMPANIES LISTED ON SGX!

So what is a Qualifying Certificate and its conditions?

Any developers with "foreigner" shareholders are required to have a Qualifying Certificate for its developments. Developers solely with Singaporean Shareholders are exempted. Thus, all listed developers are considered to be developer with foreigners and their developments will require a Qualifying Certificate.

Developers whom purchase the land from Government (a.k.a Government Land Sales) are also exempted. This is most probably to protect developers whom intent to develop ECs - more time is given to them.

Directly as per the source by Rodyk & Davidson LLP:

"The salient conditions of a Qualifying Certificate are as follows:-

(1) The Housing Developer shall within five years from the date of the Qualifying Certificate (or five years from the date of the Collective Sale Order for a collective sale deal approved under the Land Titles (Strata) Act) complete construction of the whole housing development and obtain the Temporary Occupation Permit or Permits (TOP) for the whole housing development.

(2) The Housing Developer shall sell all dwelling units in the housing development within two years of issue of the TOP.

(3) The Housing Developer shall not, at any time, lease or let out any unsold dwelling units in the housing development.

(4) The Housing Developer shall not, without the prior written approval of the Controller, enter into any arrangement to sell, assign, transfer, sublease or dispose of the residential property or any part of it in its vacant or undeveloped state (other than a mortgage or a charge).

(5) The Housing Developer shall not permit or allow any sale, assignment, transfer or disposal of its shares without the prior written approval of the Controller up to and until the date of issue of the TOP for the whole housing development or the date the Housing Developer has sold all dwelling units in the housing development, whichever is the later."

However, a developer can request for an extension but at a huge cost:

- 8% on the purchase price of the unsold unit for the 1st year of extension;
- 16% on the purchase price of the unsold unit for the 2nd year of extension;
- 24% on the purchase price of the unsold unit for the 3rd year of extension.

Do note that the whole article is quite informative - do click on the link above to read about it. If the link is broken, you can get the softcopy from me.

My Opinion

During the time of establishing these regulations of Qualifying Certificates (believe to be 2011), housing prices were sky high.

This was also partly contributed by the developers trying to increase their land bank by putting up en-bloc sale for big older apartments/condos/landed housing around. As the bidding heats up, the cost price of the en-bloc sales increases as well. Thus, when the development start to sell, the company tend to market it as a luxury condo and  sell at a higher price - pushing up the prices around the development as well.

Therefore, I believe Qualify Certificate are used to curb developers demand for land bank and the purchase of en-bloc condos/apartments. With the demand going down, supply of en-bloc sales goes down as well.

In addition, with the implementation of MAS regulations - such as Loan to Value, ABSD and Total Debt Service Ratio - this has curb the demand from the ultimate buyer, the public. This has been very true as the Property Purchase Index has fallen 7 quarters continuously as of Jul 2015 (Read here).

But There Is Still Some Loop Holes...

As of every new regulation, there will be loopholes.

Listed companies can choose to delist (Such as Popular Holdings and SC Global) or sell its unsold units to a parent Singapore Company or a subsidiary (Hiap Hoe) - Read it here.

However, this still requires significant amount of cash and fees. But as of some instances, it maybe cheaper than the cost of extension.

Anyway, if the listed developer will to delist, this will may be a good news for the shareholders. Normally the expected delist share price will be at least 15% higher than the price at that point in time.

The articles here and here spoke of the possibilities that some mid-tier developer such as Ho Bee and Wheellock may be requesting for to delist soon (Note that the articles are during April 2014... it has been over 1 year already).

Bulk sales are also getting popular as big funds, such as Blackstone, see value opportunities in the Singapore Property Market (Read here). Blackstone has specifically bought from Bukit Sembawang Estates Limited - Thank you.

Here is also an article at the start of 2015 by Square Foot Research Pte Ltd on the number of unsold units by various developers.

My Additional Thoughts of Bukit Sembawang Estates Limited 

It was my mistake not to check more carefully on the company. But I stand on my views in the previous post and find it super amazing that a developer of such scale do not have any debt.

Even with the Qualifying Certificates issue, I still hold on to my "biased" view because:

1. Land Bank

(This fact has not been confirmed) Land Bank for Bukit Sembawang Estates Limited seems to be split into 2 sessions - Land from Seletar Hills Area/Sembawang Area and Residential Apartment Sites. This appears in the annual report as per pictures below.

Land from Seletar Hills Area/Sembawang Area

Residential Apartment Sites


For those that don't know, Bukit Sembawang Estates Limited was a rubber plantation company in Singapore and owned huge plots of land.

Company Structure

If you drive along Ang Mo Kio Ave 5, you will be able to catch the scene below - Yes, the place is still a rubber plantation.

Rubber Plantation Scene

Therefore, what I am trying to imply is that, the land from Seletar Hills Area and Sembawang Area seems to be Bukit Sembawang Estates Limited's own land bank from its previous rubber plantations, which was purchase very long time ago and may not be subjected to the Qualifying Certificate regulations (I emailed Bukit Sembawang Estate Limited already for confirmation). The price then will have been very cheap and the margins will be super high. In addition, part of these lands have yet to be developed and still remains as rubber plantations - More opportunities for developments in future!

On the other hand, those Residential Apartment Sites seem to be subject to Qualifying Certificates regulations.

2. Freehold Land

The company seems to hold only 999 year leasehold land or freehold land. This factor will be able to stabilized the price of any units being sold there as buyers will be willingly to pay more for freehold units or 999 year old units. Any discount will not be drastic and profit margins can be kept.

3. Innovative deals

Although the company does not seem like a delist candidate yet, but it has been selling its unsold units in bulk to Blackstone Fund recently at a decent price. Thus, this could be an innovative way the company intent to treats its unsold units. 

In addition, the company could still have the opportunities to sell the unsold units to a parent or subsidiary to "escape" the Qualifying Certificates regulations.

4. "Special" Shareholders

Look closely at the shareholders and you will find very "special" shareholders holding a significant stake in this company - a whooping deem-interest of about 25%.


Top 20 shareholders

Significant Holdings

With these information, I still feel the company is a value stock and do not regret holding them. However, with the recent surge in share prices, I may not add more holdings to my portfolio at this current point.

Thursday, October 15, 2015

What is your plan towards achieving your goal?

Someone reminded me today - That I am supposed to have a plan. A plan to work towards my goal.

He asked me, "What is my 5 year plan?". I was caught dumbfounded. I realised I had none at this point.

As per Benjamin Franklin, If you fail to plan, you are planning to fail!

I remember I used to have plans along with a certain goal:

After university and getting my first job, I had plans to pay off my university tuition fees (despite a significant low pay). - I cleared them in 1.5 years.

After that I had zero saving left. Then I plan to save up for an emergency fund (a low 5 figure sum) and achieved that in the next 2 years.

After that I plan to create a sideline (Read here). Although it was over, but it was a great experience and I was able to survive at least a 2 year run.

After that life started to get complicated and I lost track of my plans or even my goal.

So today, I will set plans to achieve my goals.

It will not be a 5 year plan - too many surprising factors to have to consider for a 5 year plans.

But I will start with planning for my End-2016 goals - An achievable 1.25 year plan.

What about you? What's your plan? What's your goal?

Monday, October 12, 2015

To Teach or Not To Teach?

Recently stocks have risen for almost 1 week and 1 day and STI has exceeded 3000 points. But with the economy still looking weak, any "special" event may disrupt this rising trend. Thus, I am staying on the sidelines for now.

So I have been thinking recently...should I try to teach others on my method of value investing and spread my understanding?

As you know, my blog started because I wanted to spread what I have learnt over the last 10 years.

The establishment of BigFatPurse, The Fifth Person and Value Investing College has also inspired me to try to teach and spread about my way value investing.

Obviously, I may not be as good as them.

But I hope I can still contribute - such as;

1. My understanding of Value Investing.
2. My way of Value Investing
3. The Value Stock Scorecard Explanation
4. Other Qualitative Views

However, I will still be looking for profit - But it will not be a lot.

Thus, after hearing what I say, do you have any comment? If you are interested, do comment. If you have thoughts about the price, do comment too. If you have somehow more that you may like to know and wish to learn, do comment as well.

Saturday, October 10, 2015

The Holy Grail to Unlocking Value in Singapore Stocks

Note 1: This does not only applies for Value Stocks, but also for every other stock in the SGX.
Note 2: Although this is written from a value investor perspective but it is still applicable even if you are a trader.

As a value investor, capital appreciation is always on my mind - What is the "Holy Grail" that will cause a stock price to rise?  When will a stock unlocks its value, especially in the Singapore Stock Market?

Some people may disagree with me, but I think value investing is still not popular in Singapore. 

Unlike the US Stock Market, people do not recognize these value stock as quickly. In addition, US Stock are more popular/well-known as they are advertised/marketed/broadcast more often.

Just imagine - Singapore only has Channel News Asia. 

USA has BBC, CNN, CNBC, ABC, Fox and CBS (Noted that some of them may not be a US channel but I just want to emphasize that how much a US stock will be broadcast to the public).

I cannot imagine them doing a coverage on for example, Chuan Hup Holdings Ltd.

You get my point?


Thus, what can be the "Holy Grail" of the stocks in Singapore?

Here are some of factors that I think can be considered to be the "Holy Grail" (Ranked according to Effectiveness in my Opinion):

6. Share Buyback - "In the olden days", when a company suddenly declared Share BuyBack Mandate, its share will rise. But due to the Muddy Water and Iceberg reports on Noble and Olam, Share Buyback nowadays does not have much effect on stock price. It seems to be a mechanism to hold the stock price stable instead. Read this - S$43 million in Share Buybacks in First Half of July (15 July 2015)

5. Change In Business Model - A construction firm that suddenly decide to enter into property development in Singapore, may result in a rise in share price. However the public will only take action if they deem the change in Business Model as positive. I am still waiting for Sapphire Corporation price to react...zzZZZ...

4. Dividends - A price may rise if a company that never declare dividend before suddenly declare dividend. It can also be a company declaring very high dividend suddenly. However if this high dividend is deem as special, the price reaction may not be huge. Read TTJ,

3. Turnaround Year - If a company has been making losses for a number of years, then when it turn profitable for that year. The price will rise. However if the profit is not due to its business, such as an increase in fair value, the price may reduce subsequently. As per BigFatPurse's post on Fu Yu, "Fu Yu is a clear case of number 1. The earnings finally turned around and improved after 7 years of consecutive losses in their precision tooling and plastic moulding businesses."

2. Delist - If a stock intend to delist, it MUST offer a higher price than what is on the market right? However that may not be the case as to the delisting of MIIF. Normally, companies intending to delist will offer a higher price - Like Eastern Holding.

1. Sudden Investor Interest/New Investor - When a stock suddenly caught the eye of a BB (aka Big Boys) and BB starts to buy the stock, it will push the price up. It will also push the price furthermore when they want to accumulate. Read CH Offshore or Hock Lian Seng.

Note CH Offshore is more of an existing shareholder trying to accumulate more via an offer and Hock Lian Seng is a new investor buying off market purchases. I will prefer the latter as there is no "cap" on how high the price can go and traders will follow and push it even higher. 

Anyway after the price react to the news, it may not stay there for a long time.

As an investor/shareholder of the company, we will need know if we need to take action to sell! - That will be another article for another time.

If you can think of another event that may cause the price to rise, please share with me!

PS: All information above are just my own opinions.  

Wednesday, October 7, 2015

The "Trans-Pacific Partnership" Effect

This will be just a very short write up.

Today (7 Oct) is a green green day as STI recovered more than 2% (In fact it has been rising slowly on 5 Oct and 6 Oct).

I deem this to be the Trans-Pacific Partnership (TPP) effect.

It is good to read more about TPP:

Post 1

Post 2

Post 3

In my opinion, this maybe a short term recovery - it is like a much needed life extension injection to a very ill patient. Nevertheless, I feel this "patient" still has a chance to make full recovery.

PS: I am still reading the 2 new books I bought recently - Show Me The Money Book 1 and 2 by Teh Hooi Ling. There are many new ideas as well as reminders. Will write a post on it after I finish reading.

Saturday, October 3, 2015

Bukit Sembawang Estates Limited - A Debt-Free Developer

I wanted to wait till later to write this post on Bukit Sembawang Estates Limited (BSE) - as it is only a recent addition to my portfolio.

However, after reading the post by Brian's on the developer's ratio and not including BSE in the list, I decided it is my role to update others on the financial health of BSE (Brian, no offence! Just kidding.)

Just a quick note before I start off, when I look at Blue chips as compared to Penny Stock/Small Caps, I do not use the Value Stock Scorecard to do any scoring. After all, to me, I review a blue chip via its profitability, branding, future projects and business models.

Profile in Short

Founded in 1911 and based in Singapore, BSE is a residential property developer. (Yup, that's it. So easy!).

Why So Good?

No Debt - As many of you know, I hate debt laden companies. When I learnt that BSE is debt-free. I am SHOCKED! From my little understanding of developers, I am quite sure many of them hold significant long term debt and are depending a lot on the Sales and margin to pay off the debt. In addition, the rising interest rate environment will significantly reduce the net income by increasing companies' finance cost.

Future Projects - if you look at the annual report or the website of BSE, you will realise there are already many projects in line to be developed.

In Singapore Only - In addition to the point above, if you look carefully on the annual report, you will realise all of BSE developments are in Singapore. Looking at the current troubles in the iskandar region (oversupply) and China developments (empty condos), the respective developers may need to do write off or fire sale to clear these unsold units. This meant that BSE will not have this problem in the next 2 to 3 years. Furthermore, by having projects in Singapore, BSE will not have the risk of foreign exchange losses. Demand and supply in Singapore will also be more predictable. Thus they will be able to time their launch/development/sales better.

Price below Net Current Asset Value - "WHAT!" - a react of astonishment may be across your face now. The price of BSE is about $4.5 to $4.7. But the net current asset value is $5.033. About 10% margin of safety.

Why So Bad?

Branding - Despite being established since 1911, BSE branding still lack behind Capitaland or Far East Group. Investors seem to be more willingly to pump in $ in these groups.

Slowdown In Singapore Property - With the implementation of TDSR (and many other policies) by MAS, Singapore PPI has been on the downtrend for numerous months and quarters. Will future sales be able to cover the costs of development?

No REITs - Since BSE is mainly in residential, it will not be involved in any REITs.

In Short

I believe Singapore Property will recover after 1 or 2 more years. Thus, if BSE has the ability to time the property market to sell during an uptrend, it can significant to their bottom line. In addition, with a strong  balance sheet, BSE can withstand any downturn in the Stock Market.

Thursday, October 1, 2015

My Value Investing Methods

This is a reflection post after reading about their value investing strategy by MyBigFatPurse. This is also for people who want to understand more about my investing methods.

I felt that it is a very very good and long write up on their way of value investing.

Despite always saying that I am a value investor, it is sad to say I am not like them (Not as hardcore as them). I am much more like a hybrid.  

Their Strategy have a very tough stand on Book Value - it must be at a significant discount to the Stock Price - which in my view should really be the main point of value investing.

For me, I cannot stand not having dividend - if you can stand it, you will make a better value investor than I do. In my view, there is always a chance that a stock could become a value trap and the opportunity cost will be huge (spending cash and time holding this value trap instead of a value stock).

Furthermore, my value scorecard requires PE, ROE and ROA, which use earnings to calculate the ratio. In addition, sometimes its too influential on the scorecard too. Nevertheless, in value investing, there is almost no use of earnings. Only Book Value calls the shots.

Finally, some value investors may invest in stocks that with negative earnings and it may continue to go downhill. I have yet to learn to withstand these shocks and I will still panic.

In other words, I feel I still have a long way to go if I intend to be a true blue value investor.

BUT this does not mean I never had any winning stocks (Sold after at least 30% gain and not including any blue chips) before, they are;

ECS (Delist), CDW Holding and E2-Capital. 

Thus, I believe that everyone can have their own ways of investing and still gain from the market. You just need to find your own way and be consistent.


Monday, September 28, 2015

TTJ Holding Ltd - Fairly Valued?

Now I shall write about another of my stock holding in the portfolio - another value gem found - TTJ Holding Ltd.

Profile in Short

TTJ Holdings Ltd is a company that deals with steel structure works and works on various government projects. It also operates one dormitory under the name of Terusan Lodge 1 in Singapore (but it will end in 2017 ~ A Cash Cow Gone!).

However I am not worried after looking at the presentation slides below:

Order Book For 2016 and 2017

Industry Outlook

Potential Projects
In addition, anyone who is interested in this stock should take a look at this forum thread (more good stuff)!

The Value Stock Scorecard

Price: $0.385 (as at 28 Sep 2015)

Net Current Asset Per Share: $0.299 (-28.55%)

% Cash of Price: 62.51%

% Cash of Current Asset: 65.91%

Cash/Debt: 506.687 times

Discounted Net Asset Value: $0.316 (-21.69%)

Price to Sales: 1.429

Earning Yield: 11.59%

Dividend Yield: 20.78% (FY2015 Dividend has increased till 8 cents but not deem as special).

Debt to Equity: 0.13%

Profit Margin over 10 years: Able to improve/maintain profit margin at more than 15% despite lower Revenue.

10 year average PE: 9.12.

10 years Average ROE: 20.63%

10 years Average ROA: 11.54%

Value Stock: Yes – 9/14

Why So Good?

Great Profit Margin, ROA, ROE - The ability to generate great returns despite having lower revenue and within a difficult environment.

Order Book for 2016/2017 fulfilled - With the order book has been fulfilled for 2016 & 2017, revenue should be "saved". The question is if the management is able to maintain the Profit Margin. However, over the last few years, the company has managed to improved the profit margin since it was listed. Thus, without any change in the management team, I deem the ability to continue to maintain the profit margin to be unchange as well.

Further Potential Projects - As the Singapore Government will continue to improve the country's infrastructure and also to "save" the GDP, the company's track record will put them in the lead to get these projects as well.

Why So Bad?

Dormitory Business will end in 2017 - A big chuck of the revenue will be gone in 2017 as the lease expires. This has been a Cash Cow for the company since it was leased. Other than its main business, the company will need to find other avenues to earn more passive income.

In Short

Current net asset value is already more than 20% below the current share price. After 2017, profit margin may also fall and the quarterly result in 2016 will be a major indication of how the company will move in. With the above factors taken into account, TTJ Holdings Ltd seem to be near to the fair value now (I believe the price should be slightly more than 40cents in view that it is still deem as a value stock), unless the bumper dividend of 8 cents in 2015 will continue till 2016 or the management managed to secured another passive income avenue.

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