Tuesday, August 30, 2016

"Bugs" Found In The Scorecards

For anyone whom have requested for the Triple S Scorecard and any participant of the Sharing Session with T.U.B, you will be receiving some "spam" from me.

This is because, after conducting the 2nd Sharing Session with T.U.B, I have gotten feedback that the dividend payout criteria was hard and subjective to input. Thus, I have made amendments to the Enhanced Triple S Scorecard.

Instead of picking the information from SGX, I had changed to selecting information from annual report to input.


I was also informed by the users of some "bugs" that were in the Triple S Scorecard and the Enhanced Triple S Scorecard.

So this was the 1st "spam" that I sent out.


After that, when users of the Enhanced Triple S Scorecard were asking me other questions, I realize another "bug" in the Enhanced Triple S Scorecard.

Thus, I will be sending out another email "spam" to the participants of the Sharing Session with T.U.B.

I apologize for the inconvenience caused.

Nevertheless, if you encounter further question on any of the scorecard, do contact me.

However, I am very happy that people are using the scorecard to try out on their selected stocks.

These scorecards had worked wonders to my portfolios and for the users, I hope it will helped them too.

Do note that the Dividend Scorecard has already been created - It is made as an add-on to the Enhanced Triple S Scorecard instead of an individual scorecard on its own. Do watch out for the information as I will reveal it within the next few post.

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

Saturday, August 27, 2016

The Search For Dividend Stocks

I have started on my research on past stock data - in order to find the criteria to "sniff" out the Dividend Stocks.

I am not talking about REITs or Business Trust or even Blue Chips. I am talking about finding the pennies that can give you hopefully at least 5% of dividend yield every year.


My initial research shows:

1. A company that constantly gives out 5% of dividend yield, most probably have a price to book ratio of more than 1. A stock that has a price to book ratio of less than 1 and also have a dividend yield of more than 5% per year, MAYBE lacking in other parts of its financials. More due diligence is required.

2. SOME stocks uses leverage to support their high dividend yield. Their debt to equity can be more than 100%. But how long can they continue to do this? The research indicates that some of the highly leverage Stocks, that gave high dividend, eventually encounter other issues.

3. Net Profit is REQUIRED constantly, even when the Stock continuously have negative net cash from operating activities. This meant that there will be a lot of non-cash items that are added to these company's net profit. These companies also seems to run into other issues later on.

4. SGX requirement/Singapore Regulation requirement state that a company REQUIRED to have retain earning to give out dividend. A company that constantly made losses are not allowed to give dividend.

5. It is VERY HARD to find a stock that constantly produce 5% of dividend yield and expects it to be constantly fundamentally strong IF it is not a Blue Chip. You will need to give up on some fundamental beliefs if you expect a penny to provide 5% dividend yield constantly.

6. Management or a subsidiary of another listed firm or a family-ran firm are BONUS contributing factors to providing a high dividend yield.

7. Do note that due to the lack of fundamental checks, any CHANGE in Dividend or Net Profit will result in a great change in the share price. Sometimes it is better to "park and hide" - Treat it like a fixed deposit.

Thus, that is all I have found out about dividend stocks for now. I have yet to know what I will do after finding out the criteria in the search for Dividend Stock. Nevertheless, I may reveal more to the attendees of the next Sharing Session with T.U.B in September 2016. Wait for the announcement!

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

Thursday, August 25, 2016

Why Enhanced Triple S Scorecard has no ROE Criteria?

During the 1st and 2nd Sharing Session with T.U.B, the participants had always asked "Why Enhanced Triple S Scorecard has no ROE Criteria?"

ROE = Return On Equity.

Although I had written about this point before, but I realized it was a wrong conclusion.

After thinking for a long time, I came up with a few reasons:

1. Earnings are manipulated.

ROE requires to include earnings as the numerator of the formula. But for anyone whom has attended my Sharing Session with T.U.B will know that I do not use earnings (in this case, net profit) in my calculation because it can be manipulated.

2. Value Not Return.

Rather than looking at "Return" Ratios (ROE, ROI, ROA, etc), my Scorecard is searching for a "Value" Stock. A stock that is undervalued in terms of assets and cashflow.

Furthermore, "Return" Ratios do not incorporate the share price as a factor in the formula. Therefore, in my opinion, these ratios does not really relates to how share price will react.

3. ROE includes Leverage

ROE can be calculated from Du Pont Analysis Formula. This formula states that ROE requires a certain amount of leverage to be huge. Therefore, a high ROE figure may be a result of a high leverage and this can be manipulative as well.


In addition, I hate leverage as well.

4. Scorecard has already about 13 Criteria.

For those, who attended the Sharing Session with T.U.B, will understand that the Enhanced Triple S Scorecard already has 13 Criteria. A stock will need to pass 9 of them to be deem as "value". This already made the Enhanced Triple S Scorecard very hard to pass. An additional Criteria may not be useful.

5. Economic Moat investing Rather than Cigar Butts Investing.

ROE, in my view, is made famous by Warren Buffett in his later years. It was a criteria made by Warren Buffet when he was looking more at "Economic Moat Investing".

For me, my Scorecard is related more towards Warren Buffett's initial Cigar Butts Investing style, which was also made famous by Benjamin Graham, the father of value investing.

 
In Short

My feel about earnings is that it can be manipulative. Moreover, an additional criteria that is not directly linked to the share price may end up being detrimental to the eventual result I am looking for.

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

Tuesday, August 23, 2016

The Future of T.U.B Investing

Sorry for the late post as I have been busy with work.

2nd Sharing Session with T.U.B has just been completed last Saturday and it has been fruitful, even for myself. At the end of each session, I always update the attendees with what T.U.B Investing intends to do in future. So now, I guess it is time for me to update the readers as well.


1. Blogging, Blogging, Blogging.

Yes. Despite the setup of the sharing session, I will still make time to write new posts for the readers. This is the birth place of T.U.B Investing and it will stay this way. Hopefully all my readers will be able to gain new insights to my writings.

2. Sharing Sessions with T.U.B

There will still be at least another 2 more Sharing Session with T.U.B this year. After that, I can't guarantee I will continue to conduct more sessions. So sign up for the next 2 session if you are interested! Or you can even contact me to show your interest now!

The 3rd Sharing Session with T.U.B should be in the 3rd Saturday or the 4th Saturday of September. I will put up the information by end of this month. Watch out for it!

3. Premium Service

I will be putting up a premium service for my readers for future. It will most probably be a database of individual stock's Enhanced Triple S Scorecard and also my detailed portfolio.

If you have anything you like to see in a premium service, do comment or contact me!

4.  The Search For Dividend

A participant of Sharing Session with T.U.B have requested I tweaked the "Enhanced Triple S Scorecard" to find dividend stocks instead. This is something interesting and I am currently intending to work on it.

However, time is limited currently and it may take some time.

5. US Stocks

I have commented on that I intend to start looking at US Stocks and most probably create an Enhanced Triple S Scorecard for US Stocks. As usual, time has limited my progress currently and I will keep this as the lowest priority as of now.


To conclude, I do have many ideas but I lack the time to engage in all the activities. Furthermore, T.U.B Investing is a "one man show".

But do not worry, as I will try to start everything by end of this year, which is still a long time away.

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

Wednesday, August 17, 2016

Reflections After Watching "Money Monster"

I watched the movie “Money Monster” last Saturday. Other than it being a damn good movie, it also relates to investing on numerous occasion, especially an investor’s mindset. I will try to recall the scenes while it is still fresh in my head and explain how it relates back to my mindset of investing.


SPOILERS AHEAD!

Do note that I have already forgotten what are the characters’ name and the scenes explain below are not very accurate. I am just explaining what I recall from the movie that relates back to my investment mindset.

Scene 1

“The intruder explained that he had put all his savings into the stock prior to its share price crash.”

During my Sharing Sessions and maybe some of my previous posts, I have stated that an investor mindset, especially a novice, should have the following:
  1. Invest only using a fixed sum at the start, increase slowly only when you are more experience.
  2. Only invest using your disposable income.
  3. Be prepared to lose all your money.
  4. Have a long term mindset when purchasing a stock
If one has the following mindset while investing, you will not make rash decision and invest riskily, and you will not rush into a decision when the stock price falls significantly.

Scene 2

“When George Clooney saw himself on TV explaining a week earlier, on nation TV, that the stock that has just crash was ‘safer than saving account’. In addition, the stock, at that time, was on an upward trend – Maybe even 52 weeks high.”

There are a few things here that caught my eye.

Firstly, all investment has risk. Nothing is safe, even banks could go bankrupt one day. Keep money under your pillow have its own risk too.

What you should do is to fully understand “what you are getting yourself into”, when you decide to make the investment, even if it is questionable. If you do not understand, ignore it.

Secondly, in my Sharing Session, I shared that if a stock is recommended by an analyst – it is already too late. The share price will have jumped significantly after the recommendation.

Thirdly, as per my Sharing Session, I explained that I preferred to buy stocks near it 52 weeks low price or at least not at its height. This is because “what goes up must come down, what goes down must come up”. You can also see it as the possibility of buying a stock at a LOWER price and selling it at a HIGHER price is much higher than buying a stock at a HIGH price and hope that it goes even HIGHER prior to selling it.

Scene 3

“When George Clooney asked the public, that was watching the show at that time, to invest in this particular stock and push the price up. He will be expecting the algorithm system to pick it up and eventually pushes the price even further upwards. However, the stock went south eventually.”

Basically, I see this scene as a simple reminder that Mr Market is unpredictable – Change is the only constant in the stock market.

Scene 4

“When the algorithm system designer explains that the system will not fail and push the stock price down. But it is the act of men who makes the system to fail.”

This relates deeply to my Enhanced Triple S Scorecard, as well as all other checklists or tools out there. Anyone using system based/tools based investing must be able to understand how these systems and tools work.

Without actual knowledge, one should not anyhow use a system or tools to invest. If there is any wrong input, you may invest using the wrong result and suffer losses.

This is also one of the reason I started my sharing session. It is to explain clearly to users how and what to input into the Enhanced Triple S Scorecard, so that a correct result will be given to the users.

Scene 5

“When the CEO of the company was found to have misused the money for other investment.”

After the Swiber and Singpost saga, it made me realise the importance of having good management. Good management will lead to better profit for the company, which in turn will cause the share price to rise.

It will be added bonus if the management is shareholder friendly – by giving out high dividend or doing share buyback. These actions will allow the share price to rise significantly or at least hold during a downturn.

So that's the end of this post. Quickly go watch the movie if you have yet to do it.

For those who are interested to find out more about Enhanced Triple S Scorecard, you can come to my 2nd Sharing Session with T.U.B! I will only be sharing how to use and input data into my Enhanced Triple S Scorecard with the attendees of the Sharing Session. 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.

Sunday, August 14, 2016

Sing Holdings Limited - A Review of Latest Financials

After posting on Sing Holdings Limited recently, the company released its latest quarterly financials on 12 August 2016.

As usual, I did my analysis using the Enhanced Triple S Scorecard and here are the results:

Yes, it is still a Enhanced Triple S Scorecard Stock, but...

After looking at the financials within such a short period, you will notice the differences in the financials. So here are some of the questions and hopefully are the answers I am looking for.

Changes In Classification of Current Assets - My view is I am wondering why was there a change in the companies' classification in the Current Assets between the 2 quarters. "Trading Properties" were removed in the 2nd quarter financial report.
1st Quarter Current Asset Listing
2nd Quarter Current Asset Listing

My guess was that the Trading Properties stated in the 1st quarter financial statement were the strata units in the BizTech Centre and it is combined into "Completed Properties for Sales".

This is further supported by evidence in the commentary.

In 1st Quarter Commentary, it stated "With regard to BizTech Centre, the Group currently owns 48 strata units with a saleable area of 50,227 square feet in the industrial building. Of this, approximately 92% is tenanted."

In the 2nd Quarter Commentary, it stated "With regard to BizTech Centre, the Group currently owns 47 strata units with a saleable area of 48,957 square feet in the industrial building.  Of this, approximately 94% is tenanted."

This meant that firstly, if ever there were good offers for BizTech Centre units, Sing Holdings Limited were ready to sell them. Secondly, Sing Holdings Limited were actually selling the strata units that were untenanted out.

Therefore, I doubt this is a bad thing for Sing Holdings Limited and I will not deem them to be buffering shareholders. In my view, Sing Holdings Limited is just trying to extract as much benefits for the shareholders as possible during this period of that they do not really have much activities.

Lower Equity Stated - Although the company made money during this quarter, why did the equity decrease?
1st Quarter Equity
2nd Quarter Equity
Upon a closer look at the "Changes of Equity" for the 2 quarters, it was due to payment of dividend and a $5 million attributed to "Distribution to non-controlling shareholder of a subsidiary upon winding-up". These were not recorded in the 1st quarter report.

In Short

Even though there were some changes in the numbers and report for the 2nd quarter, but Sing Holdings Limited continues to be an Enhanced Triple S Scorecard Stock. Furthermore, the changes in the report will not make much fundamental changes to my analysis that I written in the 1st post. Thus, I will continue to hold on to this stock and hopefully it will be a multi-bagger (hopefully I am not dreaming).

Current Price: $0.295 as of 12 August 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.

For those who are interested to find similar quality under-valued stock, you can come to my 2nd Sharing Session with T.U.B! I will only be sharing my Enhanced Triple S Scorecard with the attendees of the Sharing Session. If you are interested to attend the 2nd Sharing Session with T.U.B., do not hesitate to contact me directly.

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

Thursday, August 11, 2016

Sing Holdings Limited - Property Developer That Pass Enhanced Triple S Scorecard

This is really an interesting stock. I shall not be "naggy" and start straight away.

Profile in Short
Founded in 1964, Sing Holdings Limited and its subsidiaries (the “Group”) is a property development and investment group listed on the Mainboard of the Singapore Exchange.

Some of the Group’s recent developments include residential projects such as BelleRive in Bukit Timah area, The Laurels at Cairnhill, Waterwoods in Punggol and Robin Residences at Robin Drive.

The Group also developed industrial and commercial buildings such as BizTech Centre along Aljunied Road, EastGate in the East Coast area and Ocean Towers, an award-winning Grade-A office building in Shanghai, the People’s Republic of China.

The Group will continue to focus on its core business of property development and investment. It endeavours to deliver dream homes to its homebuyers, in its bid to realise its vision of becoming A Developer of Premier Living.

Based on Enhanced Triple S Scorecard (Present Price of $0.295):


 Why So Good?

No Debt - This is another amazing property developer that do not hold any debts. This also meant that the company has the ability to use leverage to buy land bank or build property.

Passed Enhanced Triple S Scorecard - At last I found a property developer that passed the Enhanced Triple S Scorecard!

Future Revenue - There are currently 3 developments that Sing Holdings are working now.
  1. The EC development, Waterwoods, is a 70:30 joint venture. As of 6 May 2016, approximately 98% of the units have been issued an option to purchase. The project obtained TOP in December 2015. Revenue of about 95% of all sold units have been recorded.  
  2. Sing Holdings Ltd’s other development property, Robin Residences is a 100%-owned private condominium development. As of 6 May 2016, approximately 69% of the units have been issued an option to purchase. Revenue was recognised progressively based on the stage of construction. The project obtained TOP in December 2015.  Thereafter, revenue was recognised fully upon execution of sale and purchase agreement. 
  3. The 3rd development is BizTech Centre, a freehold property. The company currently owns 48 strata units with a saleable area of 50,227 square feet in the industrial building. Of this, approximately 92% has been tenanted. 
Although development 1 has almost recorded all its revenue, but there are still about 30% of the units in development 2 that has yet to be sold and recorded. In my opinion, Cost of goods of these development should have already been recorded. Thus, any future revenue that is recorded will be at almost no cost.

Furthermore, if we based on a rental of $2 psf per month for the 3rd development, Sing Holdings Ltd will added about $1.2 M of rental income per year at almost no cost. Do note that this is a freehold property and the company can keep earning this "free" revenue for a long time.

Future "Cash and Cash Equivalent" -
Based on the Current Asset listing, Trade Receivables and Development Properties are the top 2 contributors. However, if you understand their business model (shown below), you will be able to see that the company will add at least another $200 Million of Cash and Cash Equivalent over the next few quarters.

Development Properties sold to Buyer > Buyer get bank loan to pay for the mortgage > Development Properties transfer to Trade Receivables > Since development has been TOP, bank will release money after the loan has been approved > Trade Receivables will then transfer to Cash and Cash Equivalent.

Thus, with so much cash, the company may give out more dividend in future!

*Do note that once a bank has approved a mortgage loan for a buyer, they will definitely release the funds accordingly to the schedule of the agreement. Even if the buyer defaults halfway or even before TOP, the bank will still continues to pay the developer. Thus, once a unit has been sold, the developer will definitely stand to gain!

Why So Bad?

No Future Plans - As stated in the latest quarterly report, it said "In the absence of new projects and with significantly lower revenue to be recognised from its existing development properties, the Group expects to report substantially lower profit, or loss, for the next few quarters." This also meant that the company do not have much plans now and the share price may go lower in future as the revenue and profit goes lower.

In Short
 
By understanding the business model, you will be able to see how the company will definitely gain in future. This will also definitely benefit the shareholders eventually (if you hold for the long term). Moreover, this is a property developer that pass the Enhanced Triple S Scorecard at its current price! What more should we bargain for?

As summarized by sgmystique in Valuebuddies:

Current Price: $0.295 as of 11 August 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.

For those who are interested to find similar quality under-valued stock, you can come to my 2nd Sharing Session with T.U.B! I will only be sharing my Enhanced Triple S Scorecard with the attendees of the Sharing Session. If you are interested to attend the 2nd Sharing Session with T.U.B., do not hesitate to contact me directly.

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

Wednesday, August 10, 2016

2nd Sharing Session with T.U.B

With the positive feedback received from the participants of the "1st Sharing Session with T.U.B", I have decided to conduct the “2nd Sharing Session with T.U.B” to help you to choose good fundamental stocks for the future.

I will be showing the participants my Enhanced Triple S Scorecard method which is quite different from other methods and looks at picking good fundamental stocks for the long term.

In addition, with Swiber Limited's liquidation news which has caused a ripple effect in the Singapore Stock Market, one should understand that in these difficult times, we have to choose good fundamental stocks that can withstand future unpredictable events.
Even thought it is a paid session, I still hope that you can support me and participate in this session as I believe there is much to gain from this sharing session.

Basically I will be sharing on:
  1. My Value Investing Method
  2. How do I screen for stocks?
  3. Sharing of Enhanced Triple S Scorecard and how it works/has improved?
  4. A try-out of using the Enhance Triple S Scorecard on a selected stock
  5. My Portfolio Details (I have not fully disclose my portfolio details before... other than to those that have attended my session)
  6. My Good and Bad Investment Stock Picks – The lessons learnt
  7. My Watchlist of Stocks/Future picks
Participants of this sharing session will definitely be having a soft-copy of the Enhanced Triple S Scorecard, which I only pass to the attendees of the Sharing Session with T.U.B.


Details of the Sharing Session:
 
Target Pax: 10
 
Location: 73 Ayer Rajah Cresent, #01-11/12, Singapore (139952). (Walkable distance from One-North Circle Line MRT Station)
 
Date: 20 August 2016 (Saturday)
 
Timing: 10am to 3pm.
 
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.

Do read up on my latest blog posts, Ellipsiz Ltd, NSL Ltd and TTJ Holdings Ltd., which I use the Enhanced Triple S Scorecard to evaluate the company's financials.

Ellipsiz Ltd and TTJ Holdings Ltd are some of the special ones that passed Triple S Scorecard and Enhanced Triple S Scorecard!

If you are thinking of looking at stocks for the long term, do also 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!

Thursday, August 4, 2016

Ellipsiz Ltd - A Review of Full Year 2016 Financials

Not long ago, I wrote about a low-ball offer by the substantial shareholder, Bevrian Pte Ltd.

Recently, the company released its full year unaudited financial report on 2 August 2016.

Based on its new financial report, I did a review of Enhanced Triple S Scorecard (Based on Share Price of $0.375):

The new financial numbers in 2016 Full Year Financial Report still passed the Enhanced Triple S Scorecard!

Wow...so I am already "In the money", but I am still not selling because:

Increasing Dividend - The company has been increasing its full year dividend amount from 1.8 cents in 2014 to 2.5 cents in 2016. Dividend yield at the current price of $0.375 is still at 6.67%!

Passed Enhanced Triple S Scorecard - Yes, even at the current price of $0.375, the company continues to pass the Enhanced Triple S Scorecard. Psst...my purchase price is at $0.300.

Very Low Debt to Equity - Debt to Equity ratio remains very very very low at 0.04 only. This meant that in the event the company decides to expand, it can take on debt to grow. Although I am against this...

Decreasing Capex - Capital Expenditure has been decreasing from $5.4 Million in 2014 to $2.6 Million in 2016. This meant that the company has the ability to produce similar amount of products without significant investment in machinery. Furthermore, this also meant that the company will be able to use the excess money saved to invest in other areas or even give them out as dividends.

Good Management - Despite having a slowdown in the general economy and a supply glut in the Semi Conductor industry, the management is still able to produce net profit without much debt and investment. Furthermore, from other evidences (such as higher dividend), it seems the management also takes good care of its minority shareholders.

But I still have concerns...

The slowdown of the economy and increasing competition - Although we do not know how the slowdown of the economy will continue to affect the company, but we can see there was a huge fall in revenue from 2014 to 2015. Furthermore, with all the cheaper sources recently (esp from China), switching suppliers may not be as hard as before for its customers.

Huge Intangibles - The company has about $40 Million of intangibles in its non-current assets. If these intangibles are deem worthless one day, the write-down will cancel away all the good work the company has done these years.

In Short

It is hard to find a stock that could pass the Enhanced Triple S Scorecard. It is even harder to find one that continue to pass the Enhanced Triple S Scorecard at an even higher price. This actually meant that the company has grown stronger as the share price rises. I look forward to receiving the announced dividend in November and will continue to hold on to it or even add to it after XD.

As stated before, I will only be willingly to sell this stock at a price closer to the discounted net asset value price of at least $0.500.

Current Price: $0.375 as of 4 August 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 read about My 1st Sharing Session with T.U.B. Details of the 2nd Sharing Session with T.U.B is located in the post as well.
 

I will only be sharing my Enhanced Triple S Scorecard with the attendees of the Sharing Session. If you are interested to attend the 2nd Sharing Session with T.U.B., do not hesitate to contact me directly.

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