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.

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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.