Sunday, July 31, 2016

Another Lesson Learnt From Deep Value Investing - Krisenergy Ltd

After reading about Investment Moats latest post on Swiber Holding Ltd and his comments on Deep Value Contrarian Investing, I made a comment:
"Hi

If an investor is using Deep Value Contrarian style (like me sometimes), he must be able to understand it is “HIGH RISK, high return” – note the capital letters.

He must also have experience, able to endure the ups and DOWNS (mostly downs) and understand financials as well as the business model.

He must also be able to exit when something goes wrong.

Only by understanding these factors, then should the person go into deep value investing.

Looking forward to your next post!

Regards,
TUB Investing"


Therefore I will emphasize again - Deep Value Contrarian Investing is a high return but also HIGH RISK style.

I have been engaging in some of this investment style since March 2016 and the results have some far been slightly better than average. But it should have been better.


Other than the factors I stated above, deep value investing requires investor to assume certain factors and if you get the assumption wrong, you lose.

Here is one of a recent example that I made losses in:

Krisenergy Ltd was another one of the deep value stocks that I purchased recently. My main purpose of purchasing this stock was its deep discount to book value and I wanted a stock that was a direct proxy to oil prices. My assumption was that I expect oil prices to rise in future.

Krisenergy Ltd was a oil rig operator and its revenue is a directly linked to oil prices.

When Swiber Holdings Ltd announced its winding up decision, I was suddenly smacked with the facts of just how bad the oil industry is in (I already knew its bad but not this bad). This winding up will cause a ripple effect within the oil and gas industry and Krisenergy Ltd will definitely be affected.


Since my purchase of Krisenergy Ltd was on the assumption that oil prices will rise in the near future, and in addition with all those news of oversupply of oil recently, I decided to give up on Krisenergy Ltd. I sold off all my holdings and made some losses.

Despite this incident, I will like to say that I still believe in Deep Value Investing style. This is a style that has been used effectively since Benjamin Graham days. The main factors to excel in this method is to understand the business deeply and have faith and belief in your catalyst assumption.

*Do note that even when Swiber Holdings Ltd withdraws its decision on winding up, I will still sell Krisenergy Ltd at a loss. This is because withdrawing the decision does not mean it is in a better position. It is just delaying its death only.

If you are interested in deep value investing methods, do come and hear about it in My 2nd Sharing Sessions with T.U.B in August!

Another contrarian method is my Triple S Scorecard investing style. If you are interested, do give my initial Triple S Scorecard a try. It's still a good tool!
 

Do note that I will only be releasing the Enhanced Triple S Scorecard for those that attend My Sharing Session with T.U.B. If you are interested to attend the next Sharing Session, do not hesitate to contact me directly.

Oh... and do remember, please like our Facebook page - T.U.B Investing.

Wednesday, July 27, 2016

Have You Sold?

Updated on 28 Jul 16 11.54am: Decided to sell off Krisenergy Ltd after Swiber Holdings Ltd files to wind up. Another lesson learnt. It seems the industry is really in big trouble. Deep value trap in the future.

No, you didn't? Then did you buy?

After reading what B wrote, I decided to write a post of my recent actions to emphasize some of the views he had about the recent situation.

To start off, I believe this current rise in share prices are temporary and this is a time to SELL rather than BUY. In addition, I also tried to re-balanced my portfolio and clear off some dead wood.


This is an action-packed 2 months for me.

I managed to divest the following holdings during this period and increase my cash position from about 5% to 15%.
However, with this much cash, I also bought some other stocks.
  • Addition of New Stock - Krisenergy Ltd* Please read update above
  • Addition of New Stock - Top Global Ltd
  • Addition of New Stock - Sing Holdings Ltd* Today
  • Addition of Existing Stock - USP Group Ltd
  • Addition of Existing Stock - Hock Lian Seng Ltd* Today
  • Addition of Existing Stock - Hupsteel Ltd* Today
Do note that although I bought these stock purchases, but I do not expect them to rise significantly over the short term (< 1 year).

My opinion is that I will be holding it long term (2 to 3 years) and I have to expect to average down further in the near future.

"AVERAGE DOWN?! THEN WHY BUY?"

This is to plan for the worst case scenario. With this expectation, I will not make aggressive purchases and I will be more cautious when I enter any investment. In addition, as stated above, I really feel that share prices seem artificially inflated now. If STI Index falls significantly again, it will most probably affect the whole Singapore market will most of the stocks having a much lower share price.

I also try to choose stocks that is on a downward trend. Getting a stock on a upward trend, in my opinion seems like a suicide move in the current market (I may have 1 or 2 suicide move stated above).

Nevertheless, if you have already did your due diligence and purchase new stocks, do keep hold of it and don't sell immediately if the STI start falling. Have faith.

So if you are thinking of investing in stocks for the long term, do give my initial Triple S Scorecard a try. It's still a good tool!

However, I will only be releasing the Enhanced Triple S Scorecard for those that attend My Sharing Session with T.U.B. The attendees of the 1st Sharing Session with T.U.B has all received it. If you are interested to attend the next Sharing Session, do not hesitate to contact me directly.

Oh... and do remember, please like our Facebook page - T.U.B Investing.

Sunday, July 24, 2016

NSL Ltd - Prefab and Precast Steel Supplier

One of the participant of the 1st Sharing Session with T.U.B asked: " With so many steel companies in your portfolio, why haven't you considered NSL Ltd?"

Thus, I decided to take a look at the financials of NSL Ltd.

Profile In Short

NSL Ltd, through its subsidiaries, manufactures and sells building and refractory materials, and road stones in the Asia Pacific. It operates through Precast and Prefabricated Bathroom Unit (PBU), Dry Mix, Environmental Services, and Engineering divisions.

The PBU division manufactures precast concrete components for building and infrastructure; and prefabricated bathroom unit/cabins for ships and buildings and marine fire doors.

The Dry Mix division manufactures and sells drymix plasters and mortars.

The Environmental Services division engages in the collection, management, recovery, and disposal of marine waste, oily/toxic waste, and industrial waste. This division also offers other oil-and-chemical services, such as cleaning and maintenance of oil interceptors, grease traps, and storage tanks; waste management consultancy services; tank rental services; and other waste recovery and environmental pollution control services, as well as markets and distributes fuels, lubricants, and greases.

The Engineering division manufactures container spreaders and bulk handling equipment. NSL Ltd also owns and manages raffles marina club; and trades in oil products. 

Based on the Triple S Scorecard (Present Price of $1.440): 

 Fail...
Why So Good?

Provide steel for prefab and precast industries - If you have read through my portfolio, you will understand that I have many steel companies in my portfolio. However, these firms' customers are mainly from the marine/oil/gas industry, which have been affected significantly by the recent low oil price. Therefore, with most of its customer coming from the prefab and precast industry, NSL Ltd will be not deeply affected by the low oil prices.

Different customer mix from other Steel Companies - In addition to the point above, NSL Ltd serves a different set of customers from the usual steel companies. Therefore, it will not be affected by the current set of marco factors in the oil industry. Even with the issues in the construction industry now, the fact that the company main customers are doing prefab and precast, which are mostly used for HDB flats, these issues will have minimum impact on its revenue.

High Cash Amount - The company has a high cash amount in its balance sheet. About 67% of the current asset is cash, which makes the current asset very liquid. This will provide NSL Ltd the ability to make the necessary investment immediately, if the need arises.

Why So Bad?

Heavy Capital Expenditure Annually - The company has been spending heavily on property, plant and equipment yearly. This has reduced its free cash flow and affected its dividend payment over the last 3 years.

Fail the Enhanced Triple S Scorecard - As shown above, the company has failed the Enhanced Triple S Scorecard. If you look deeper into the numbers of the Enhanced Triple S Scorecard, other than the low free cash flow which affected its Price to Free Cash Flow Ratio, you will see that the company do not have a high margin of safety as its book value is close to the current share price. Low dividend announced the last 3 years also affected its scoring in the Enhanced Triple S Scorecard.

In Short

Despite being interested in this stock due to the positive points above, I will not be investing in this stock because I already have many steel companies in my portfolio and this stock has a high share price, which meant a high opportunity cost for me (who has limited warchest).

A note to myself  is that maybe I should have look at this stock from the angle of investing in a Blue Chip, rather than the Enhanced Triple S Scorecard method (only those that attended the "1st Sharing Session with T.U.B will understand). However, based on NSL Ltd share price chart, the share price has been on an uptrend. Thus, as of now, I will still give it a miss.

Current Price: $1.440 as of 24 July 2016.

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

Do note the author is not vested in this stock/company.

Anyway if you are thinking of investing in stocks for the long term, do give my initial Triple S Scorecard a try. It's still a good tool!

However, I will only be releasing the Enhanced Triple S Scorecard for those that attend My Sharing Session with T.U.B. The attendees of the 1st Sharing Session with T.U.B has all received it. If you are interested to attend the next Sharing Session, do not hesitate to contact me directly.

Oh... and do remember, please like our Facebook page - T.U.B Investing.

TTJ Holdings Ltd - Non-Renewal Of Tenancy For Foreign Workers Dormitory

On 20 July 2016, TTJ Holdings Ltd has announced that "BCA has not granted the Group’s application for a renewal for a further term of the tenancy for the Terusan Dormitory. Currently, the Terusan Dormitory houses approximately 5,300 workers and is the only workers dormitory operated by the Group.
 

The Board also wishes to inform shareholders that the Group has been successful in securing the tender for the management and operation of an existing foreign workers dormitory situated at Upper Jurong Road (the “Jurong Dormitory”). The tenancy for the Jurong Dormitory will be for approximately 3 years commencing on 1 August 2016 and ending on 30 July 2019. The Jurong Dormitory has a capacity of approximately 500 workers.

The Group’s Dormitory business contributed approximately 20.3% or S$19.1 million of the Group’s revenue for FY2015. Accordingly, the non-renewal of the Terusan Dormitory is expected to have a material impact on the Group’s financial and operating results for the financial year ending 31 July 2017 (“FY2017”). The Jurong Dormitory is not expected to have a material impact on the Group’s financial and operating results for FY2017."

Click on this link for the full report.

Being the "promoter" of TTJ Holdings Ltd ever since I purchase the stock, I have been telling people how great this company is and how the company was able to pass Enhanced Triple S Scorecard. Therefore, when I saw this news, I was worried.

A dormitory of 500 to substitute one with 5,300! How is he able to achieve similar profit margin for the future years? What is going to happen?

I decided to go back to the latest TTJ Holdings Ltd financials and its respective Triple S Scorecard to calculate its score.

Firstly we need to input the changes stated in the announcement into the financials. We remove the investment property from the non-current assets and $19.1 Million from the free cash flow.

And we still get... that TTJ Holdings Ltd is still a value stock!


Furthermore, if you are able to pick out the right information, you will realise that:

1. The lease will only expire in Jan 2017.
2. For financial year 2016, its financials will not be affected.
3. The new lease for the new dormitory starts in April 2016 - Which meant 3 months of the revenue will be recorded in the revenue for the financials of 2016.

With the information above and the exceptional 3rd Quarter recorded, we can predict the revenue and net profit for Financial Year 2016 will most probably be much higher. Thus, this should be something to celebrate rather than sad.

Do note that there are some insider purchases by the CEO himself lately as well.

However, I will not advise people to go in right now as the price is rather high now. In addition, after financial year 2016, the future financial report will be affect by information stated in this latest announcement. 

Please invest with caution if you are really thinking of purchasing this company.

Current Price: $0.360 as of 24 July 2016.

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

Do note the author is vested in this stock/company at $0.325.

Anyway if you are thinking of investing in stocks for the long term, do give my initial Triple S Scorecard a try. It's still a good tool!

However, I will only be releasing the Enhanced Triple S Scorecard for those that attend My Sharing Session with T.U.B. The attendees of the 1st Sharing Session with T.U.B has all received it. If you are interested to attend, do not hesitate to contact me directly.

Oh... and do remember, please like our Facebook page - T.U.B Investing.

Friday, July 22, 2016

1st Sharing Session With T.U.B is a Success!

We have successfully conducted our 1st Sharing Session with T.U.B!

Being the coordinator, I have also learn a lot from the audience as well. Being a small group, friendship was also established during the session.

Feedback has been positive so far and everyone seem to walk away with something learnt that day.

Yup, that's me talking.
Thus far, I have been thinking and these pointers seem to have stuck me:

1. My biggest influence on investing didn't come from Warren Buffet or Benjamin Graham. It is James Moniter - an Author of various investment books (Focus Behavioural Investing and Value Investing) and a member of GMO’s Asset Allocation team. Prior to joining GMO in 2009, he was co-head of Global Strategy at Société Générale.

2. I am really getting into deep value investing. This is a high risk, high return strategy and I must really do my due diligence on each stock before I enter. This is a reminder for myself as well.

3. As stated on the slides, Enhanced Triple S Scorecard is as contrarian as it gets. If you want to know more, you should come for my next sharing session with T.U.B!

4. I should really start to understand US markets and try getting into it. Singapore market seems too small as compared to US markets. Market Cap of Singapore Market is $1 trillion as compared to US Market of $19 Trillion. With such a huge market cap, there is always a higher possibility of finding a company within the value investing space!

For those interested in the next Sharing Session with T.U.B, the details are as follows:

Basically I will be sharing on:
  1. Investor Mindset
  2. Basis of My Investing Methods and Value Investing
  3. Screening For Stocks
  4. My Investing Methods
  5. Detail Explanation of Enhanced Triple S Scorecard
  6. Try Out of 1 Case
  7. My Portfolio Details (I have not fully disclose my portfolio details before)
  8. Investing Lessons I had
  9. My Watchlist
Participants of this sharing session will definitely be having a soft-copy of the Enhanced Triple S Scorecard, which I have not shared with anyone yet (other than those attended).

Details of the Sharing Session:

Target Pax: 10 to 15

Location: To be confirm

Date: 21 August 2016 (Sunday) 20 August 2016 (Saturday)

Timing: 10am to 3pm (an hour break for hour in between)

Price: $68 (via bank transfer. Email me for account number). Each confirm slot will be given upon the successful bank transfer.

If you have any queries, please feel free to contact me directly.

If you are thinking of looking at stocks for the long term, do give my initial Triple S Scorecard a try. It's still a good tool!

Oh... and do remember, please like our Facebook page if you still yet to do it - T.U.B Investing

Hope to hear from you soon!

Sunday, July 17, 2016

The Value Portfolio - Recent Actions and Views - Post 9

It has been some time since I did an update on my portfolio (the last one was in April). Over the time, I have already made numerous sale and purchases in the Singapore market.

This should also be the last time I update my portfolio on T.U.B Investing. In future, I will only review my current portfolio during my sharing session. So if you are interested, do come for the sharing session! (But never say never... I may just post another update numerous months later!)

But don't worry, I will continue to review interesting stocks (especially if I am vested) in the Singapore market and post them on T.U.B Investing.

Without further ado, here are the following stocks that are currently in my portfolio:
  1. Accordia Golf Trust (Yes. I have yet to sell despite my last post as it did not reach by target price.)
  2. Suntec Real Estate Inv Trust
  3. Oversea-Chinese Banking Corporation
  4. CH Offshore Ltd
  5. ST Engineering Ltd
  6. LTC Corporation Ltd
  7. OUE Hospitality Trust
  8. Hupsteel Limited
  9. Krisenergy Ltd
  10. Top Global Ltd
Bought Hupsteel Holdings Limited - Spotted it on Valuebuddies and decide to do a review of its financial using the Enhanced Triple S Scorecard. Although its earnings does not have a good indication, but the exceptional strength of its balance sheet and high dividend yield allowed the stock to pass the Enhanced Triple S Scorecard. I didn't review it previously most probably because the price didn't make any drastic change or I didn't want any more steel related company in my portfolio.

Bought OUE Hospitality Trust - After the rights issue, the share price dropped significantly to 52 weeks low price. Thus, it caught my attention and I bought it. The extensive expansion of the airport will have helped to ease the expansion of the hotel. In addition, Victoria Secret having a flagship store at Mandarin Gallery. I will be expecting the dividend to increase in the future.

Bought Krisenergy Ltd - Wanted a company that has a direct linkage to oil price. Will write an article on it.

Bought Top Global Ltd - Another interesting addition. This company is a Singapore Developer and it can also an indonesia "play". Only a post can easily explain this addition.

Sold Sapphire Corporation Limited - Sold after I decided to streamline my strategy and replenish my warchest. This is one of the stock that is bought based on certain growth strategy which defers from my strategy.

Sold DeClout Limited - Another stock sold after my decision to replenish my warchest. The sudden rise in price, due to all the previous analysis report about the spin off of one of its subsidiaries, gave me an opportunity to sell off at a slight gain.

Sold IPC Corporation Ltd - Bought due to its deep value at the point in time. But with its main bulk of business in China, it made me nervous. Therefore, the stock was sold at a 20% gain, but the share price continue to rise after that.

Sold Lafe Corporation Ltd - The aftermath of learning about its management on Valuebuddies and the decision to replenish my warchest made me sold at a loss of 20%.

Sold Vibrant Group Ltd - The divestment is all written over here.

Do read up on all the previous changes in The Value Portfolio here.

If you are thinking of investing in stocks for the long term, do give my initial Triple S Scorecard a try. It's still a good tool!

However, I will only be releasing the Enhanced Version of the Triple S Scorecard for those that attend My Sharing Session with T.U.B. The attendees of the 1st Sharing Session with T.U.B has all received it. If you are interested to attend, do not hesitate to contact me directly.

Oh... and do remember, please like our Facebook page - T.U.B Investing.

Tuesday, July 12, 2016

Review Of My Venture Into Deep Value Stocks

If you remembered, I announced in March that I had ventured into deep value investing. Therefore, this portion of my portfolio is one which I have been actively monitoring as I deem them as “High Risk, High Returns”.


With the divestment of Vibrant Group Limited, I like to announce that this is the 2nd successful huge capital gain (above 25%) I had achieved over this short period of time.

So here are the deep value stocks that I have bought and sold since I start deep-value investing (Calculation ignore dividends that I may have collected and transaction fees):

Do note that I have not been updating of the changes in my portfolio recently. Therefore, some of the stocks here may not be have been mention in my blog before. 


Fu Yu Corporation Ltd – Bought $0.164. Sold $0.194. Gain of 18%.

IPC Corporation Ltd – Bought $0.345. Sold $0.440. Huge Gain of 27%!

DeClout Limited – Bought $0.205. Sold $0.230. Gain of 12%.

Lafe Corporation Ltd – Bought $0.650. Sold $0.505. Huge Loss of 22%!


Multi-Chem Limited – Bought $0.470. Sold $0.505. Gain of 7%.

Vibrant Group Limited – Bought $0.305. Sold $0.420. Huge Gain of 37%!

As shown above, this strategy of investing in deep value stocks has huge potential in achieving extraordinary returns but it also has significant risk involved.

An example is the sale and purchase of Lafe Corporation Ltd which have wipe out half of my gains.

Another deep value stock, USP Group Limited, is already sitting on huge paper losses of almost 50%.

In short, these losses made me realise that a stock that is priced at such huge discount to its net asset value per share will always have a reason. To minimize the downside risk, we need to understand:

1. the business behind the company;
2. the reason behind the stock's low price; and
3. a possible/potential catalyst for the stock price rise prior to making the investment.

Significant due diligence have been done on the stock first.

If you are thinking of looking at other less "risky" stocks for the long term, do give my initial Triple S Scorecard a try. It's still a good tool!

I will only be releasing the Enhanced Version of the Triple S Scorecard for those that attend My 1st Sharing Session with T.U.B. If you are interested to attend, do not hesitate to contact me directly.

Oh... and do remember, please like our Facebook page - T.U.B Investing.

Monday, July 11, 2016

Divestment Of Vibrant Group Limited And My Afterthoughts

Since I wrote about Vibrant Group Limited 9 days ago, the share price has jumped from $0.350 to $0.430 (as of 11 July 2016)!

With my Purchase Price of $0.305, I have decided to divest all of my holdings in Vibrant Group Limited at $0.420. This represent a capital gain of 37.7% over a period of 3 months!


Many may criticized me over my decision to sell it off after such a short period as I have been “promoting” myself as a long term investor.

Thus, I may be misleading my readers as I am more like a trader rather than an investor.

I like to clarify that when I put my money into a stock, the fundamental analysis I did on each stock is supposed to give me assurance against any downside in the share price. In other words, I assured myself by understanding the company and its business so that I can emotionally “protect” myself from any impulsive move that I may regret later.

Furthermore, by doing so, I invest with a long term mindset so that I will be able to endure holding onto the particular stock for a prolong period.

Nevertheless, if the share price suddenly jumped significantly, I will still sell my holdings in the company to realise the capital gain even if I only hold it for a few days. Hope that this will explain on my stand on having an “Investing” mindset.

Other than the increment in the Share price, the concerns I had in the previous post on Vibrant Group Limited still worries me, despite the huge margin of safety. I really do not like companies with huge association in China as well as companies that are highly leverage. Therefore, these factors contributed to my decision to sell as well.

Do note that Vibrant Group Limited was part of my venture into deep value stocks.

Next up, I will be writing about the performance of my venture into deep value stocks.
 
If you are thinking of looking at other less "risky" stocks for the long term, do give my initial Triple S Scorecard a try. It's still a good tool!

I will only be releasing the Enhanced Version of the Triple S Scorecard for those that attend My 1st Sharing Session with T.U.B. If you are interested to attend, do not hesitate to contact me directly.

Oh... and do remember, please like our Facebook page - T.U.B Investing.

Thursday, July 7, 2016

Ellipsiz Ltd - A Low Ball Offer From CEO

Updated on 8/7/16: As pointed out by respective valuebuddies (sgpunter), "...the Offer is not made by the CEO but the substantial shareholder Bevrian Pte Ltd which is an entity linked to the Lum family...This Offer was only triggered as it is mandatory to do so according to the Code of Takeovers and Mergers given that Bevrian has crossed the 30% threshold...Hence, the explanation for the seemingly "lowball" Offer. Bevrian already indicated that they intend to maintain the listing status of Ellipsiz so nobody is expecting for this Offer to go through..."

I just like to give a short update on Ellipsiz Ltd.


As of today, there was a low ball offer of $0.380 from the CEO.

I have seem low ball offers of my watchlist stock, such as Zagro Asia Ltd, happened before and succeed. But this is my first opportunity of receiving a general offer and I am still excited (even if it is a low ball one).

Anyway I have written about Ellipsiz Ltd previously, which you can read about it.

So now I have 3 choices:

1. Yes, I will sell.
2. No and I will ignore.
3. Wait and see, hope for a higher offer.

To decide, I will based my decision on the Enhanced Triple S Scorecard (Do note that Ellipsiz Ltd remains one of the stocks that pass the Enhanced Triple S Scorecard):

Based on 3rd Quarter of FY 2016 results, we note that:

1. Net Current Asset Value is about $0.325 per share.
2. Discounted Net Asset Value is about $0.531 per share.
3. 80% of Equity is $0.589 per share.
4. Graham Number is $0.691 per share.

In Short

As per my above findings, I will be more willingly to release my shareholdings if the offer was closer to the discounted net asset value price, such as $0.500. Therefore, my decision is to wait and see. Hopefully, the CEO will release a much higher offer.


In addition, do note that full year financials of 2016 will be released soon, around 18 August 2016, and I am expecting a large dividend to be given out. The reason behind my view of a large dividend is to compensate the CEO in spending his money for this general offer. Let's hope my guess is correct on this!

Current Price: $0.380 as of 7 July 2016.

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

Do note the author is vested in this stock/company at $0.300.

If you are thinking of looking at stocks for the long term, do give my initial Triple S Scorecard a try. It's still a good tool!

For those who are interested to find similar quality under-valued stock, you can come and attend My 1st Sharing Session with T.U.B. I will only be sharing my Enhanced Triple S Scorecard then. If you are interested to attend, do not hesitate to contact me directly.

Oh... and do remember, please like our Facebook page - T.U.B Investing.

Saturday, July 2, 2016

Vibrant Group Limited - Full Year Results Are Out

Vibrant Group Limited just released their results a few days ago.

I got excited about the dividend and commented on valuebuddies thinking that it was a great announcement and got "slapped" with the reality. The dividend is actually much lower since it was a post consolidation dividend. If based on previous year dividend announcement, after share consolidation, it should be 2.75 cents (as compared to 1.80 cents declared for FY 2016).

The Conversation In Valuebuddies

Anyway you can read about my previous detailed write up about Vibrant Group Limited here. Thus, I am not going into details for the FY 2016 financial statement.

Currently, this stock is in the money for me but I am still not selling because...

1. Price is Still Significantly Lower than Net Asset Value - Net Asset Value still remains close to the figure I stated previously, at $0.6702. The current share price of $0.350 is still about 47% discount off the Net Asset Value.

2. Dividend of $0.018 - Although this is still much lower than the previous year dividend (Should be $0.0275 if based on last year dividend after 5 to 1 share consolidation), but for me who only bought Vibrant Group Limited after share consolidation, this is a piece of good news since the dividend yield is at 5.1%.

3. Proposed Disposal by Shentoncil Pte Ltd of 60% of the Shares in Eceil Pte Ltd for $75M - This announcement caught me by surprise. However, this is a very good piece of news.

As per previous announcement, Cecil House is valued at $110 Million.

Then, as per current announcement, Vibrant Group Limited sold 60% of Cecil House for $75 Million. This meant that 100% of Cecil House, currently, is valued at $125 Million.

Without doing anything much, Vibrant Group Limited has made a steady gain of about 10%.

What are the question marks?

1. Still Highly Geared - The company has increased its bank borrowings to over $448 Million. This is a significant amount and will have a toll on its cash standing.

2. Much More Associated within China - With the sale of the Cecil House to another China Company, the company is associating itself much more with China Firms. This is a worrying trend for me due to all the past scandals of these China Firms.

In Short
I bought Vibrant Group Limited based on deep value investing basis and that has not changed. The dividend is the icing on top of the cake. In addition, the partial sale of the ownership of Cecil House for the purpose of reducing their debt amount gave me some relief that at least the management is not only focus on increasing its asset, but also managing a "balanced" balance sheet.

Current Price: $0.350 as of 2 July 2016.

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

Do note the author is vested in this stock/company at $0.305.


If you are thinking of looking at stocks for the long term, do give my initial Triple S Scorecard a try. It's still a good tool!

I will only be releasing the Enhanced Version of the Triple S Scorecard for those that attend My 1st Sharing Session with T.U.B. If you are interested to attend, do not hesitate to contact me directly.

Oh... and do remember, please like our Facebook page - T.U.B Investing.