Monday, December 30, 2013

UOL Group Limited

This is a follow up post to the March 2013 post on UOL Group Limited.

I had indicated that UOL is unlikely to run up to 10 and it is most likely to fall by end of year.



Above this is a snap of where it is currently.

It is at 6.17.

At the time of my post it was 6.69.

Broadly, I was right, it has dropped around 8%.


Sunday, November 24, 2013

A Review of the CDW Holding Trading Idea

I had posted a trading idea on CDW Holding on April 25, 2013.


The trading idea was

"14 cents is a fair price to pay for CDW, however, due to momentum, it may head to 16.5 to 19 cents within a year's time.

I expect some yield compression to drive this."

Looking at the chart it took only four months instead of a year.

The stock hit 16.8 on 16th August (nice symmetry there), so, part one has come true.

Ideally, you should have sold it when you get your price target. That is a nice 17% return for 4 months.

The stock has now slipped back to 15 cents.

A second run is not unlikely, but improbable.

Let us wait and watch if the dividend is 0.8 - 0.9 cents

Thursday, September 5, 2013

Sembcorp Industries

Last year I had outlined a trading idea on Sembcorp on 16th April.

The trading idea was

"Assuming the world does not go to hell in a handbasket, buy Sembcorp anywhere from May till November.

The range of fall could be 5.06 or 4.66 or 3.66

My prediction for whatever it is worth, is that it would fall from around 5.4 as on date i.e. 20th April 2012 to around 4.35 by November 2012.

Ideally, buy at a price below 4.5 and sell it anywhere from November 2012 onwards till April 2013 when it hits 5.5.

The return on capital is around 22%, good enough for a year holding period."



Actually, you need not have waited one year, you needed to wait for just one month.

By 11 May 2012, the price had hit 4.67, within a cent of my fall price.

There were two exit opportunities , one in October and one in January both, exceeding the 5.5 target.

Sembcorp is currently at 4.93.

I am currently long the stock. As it hits 5.5, I will exit my position.


Monday, September 2, 2013

Isetan - What Runs up will drip down ?

I am revisiting a post I did on Isetan in August 2012.

http://sgx-stocks-sti.blogspot.sg/2012/08/isetan.html

is the link above to those who missed the original one.

Here is a link to isetan.

https://www.isetan.com.sg/ 

The funny thing is that the stock price was on a tear in August 2012, shooting up 46% in the month



Promptly, it collapsed about a day or two after the query from SGX in August 2012.

However, it went on a longer run from Sep to Nov 2012 reaching the same heights as earlier.

However, there is no query from SGX.

Now, from November 2012, it is slowly dripping down back to its old levels.

No positions in Isetan. Just an observation

Thursday, August 29, 2013

PCI Ltd

I had done a post in June on PCI Ltd.

Here is a link below to the company.

http://www.pciltd.com/

The web-site is quite poor, though

Okay, enough of quibbles, let us get to the heart of this post.

I had predicted that the company will earn 1.74 cents per share.

The prediction was almost 100% accurate, with the company posting earnings of 1.75 cents per share.

So, I get full points for that.

However, instead of shareholders getting a shock, it was me getting a shock as the announced dividend was 3 cents, instead of the predicted 1 cents.

My mistake was to use a payout ratio to estimate it.

Instead, the company is dipping into share capital to pay out dividend.

However, this is not sustainable.

Unless there is a rebound in earnings, they cannot sustain this.

The remaining two predictions are still open.

The share price is between 43 to 46 cents, the range has narrowed from 38 to 50.5.

Here is a link to the old post on PCI.

http://sgx-stocks-sti.blogspot.sg/2013/06/pci-ltd.html



Wednesday, August 28, 2013

Review of August 2012 Predictions

They say that nothing is more humbling than seeing one's confident predictions fail spectacularly.

This is certainly true.

I had predicted twenty prices last year and sat down to review it.

Broadly, the prediction exercise was an utter failure.

In most cases, the direction was wrong, in even more cases the variance was too high.

Moral of the story and lesson learnt is to not use a shortcut

Here is the review below. My rating is zero on 100 for this.

Stock Price  Predicted Price Aug 1 2013 Actual Price Aug 1 2013 % Variance from Prediction % Growth in Year
Aug 1 2012
Singtel 3.52 3.09 3.93 27% 12%
GLP 2.33 2.14 2.86 34% 23%
Capitaland 3.03 2.97 3.27 10% 8%
Golden Agri 0.73 0.73 0.525 -28% -28%
Keppel Corp 11.21 11.16 10.41 -7% -7%
Genting 1.29 1.45 1.345 -7% 4%
OCBC 9.58 9.79 10.66 9% 11%
DBS 14.78 15.16 17.24 14% 17%
UOB 19.86 20.33 21.8 7% 10%
Noble Group 1.075 1.54 0.9 -42% -16%
Wilmar 3.26 4.71 3.17 -33% -3%
F&N 8.18 6.46 5.58 -14% -32%
SembMar 4.92 5.27 4.57 -13% -7%
Olam 1.865 2.39 1.655 -31% -11%
Average -5% -1%

Of, course, if you average it out, it does not look that bad

Long Break - Sorry About that

Hi Folks,

Just a short note to apologize for the long break from the posts.

Work has been very hectic and i had to cover for two colleagues for a while.

Things seem to be settling down.

So, you can expect some posts coming up shortly

Cheers

Thursday, June 6, 2013

The Reason for the Sudden Weakness in Stocks in STI

There have been a lot of reports recently that the markets are spooked by Fed funds tapering of QE and some of you have asked me, what the hell is it to do with us ?

Yes, there is a long term bond rate and so on, but it is a bit puzzling to most.

Let me tell you a story.

Let us assume that you are a billionaire in USA and you want to make some money.

You see your currency depreciating against a currency, say the Singapore Dollar, so you start investing in Singapore Dollar Assets.





As you can see, the US dollar has been sliding versus the Singapore Dollar for the last five years.

Because of the influx of US Dollars, the asset markets in Singapore rise.

This is good for everyone, right, SGD assets rise making both foreigners and locals happy.




You are even more happy, as not only is your currency investment making money, but that is magnified by your asset investment.

If however, the Fed stops QE, then, chances are you think, hey let us bring some of our money back home.





The reader will see the sudden strength of the USD, above.

There is a good chance that this is because of funds flow back to the USA.

Now, not coincidentally, there is a sudden weakness in STI, seen below




The dates exactly are after Bernanke's QE speech.

The one chart which shows all this nicely is below

You will see the exact STI gain mirrored by the exact dollar weakness above.


This, my friends, is the reason for the gyrations in the stock markets.

I am sure that after three months or so of this, somebody will explain this in a long newspaper article.



PCI Ltd

This post is to estimate the value of PCI Ltd.

http://www.pciltd.com/financials.html is a link to the company's financials.

I suspect share-holders in this company are going to be in for a rude shock around dividend announcement time.

The last three years have been kind with generous payouts of 3 cents per share.

This is providing a seemingly high yield of 7.5% .

However, if you look at the latest quarterly report, it looks like they will earn only around 1.74 cents a share in 2013.

Using a ratio of 60% of earnings as payout, the dividend per share is likely to be around 1 cents a share.

My estimate is that

a) The earnings per share will be 1.74 cents per share
b) Dividend will be around 1 cent per share.

We can review this after August to see how far this is true.

Having said that, there seems to be intrinsic value in PCI.

My estimate is that the share is worth around 57 cents a share as on date.

The buy - sell spread is very high at 38 cents to 50.5 cents.

If you are looking to buy, please try to put in a bid below 40 cents i.e. 30% below intrinsic value.

Their EPS for the last five years is


2012 2011 2010 2009 2008
4.54
6.42
4.09
2.6
2.74

Their Book value for the last five years is


2012 2011 2010 2009 2008
42.5
40.61
34.37
30.76
29.57
 

 Using these two, I have calculated the intrinsic value as 57 cents a share.



The way this post will be evaluated is

a) The accuracy of the earnings estimate
b) The accuracy of the dividend estimate
c) Will the share price trend below 40 cents by Dec 2013 ?
d) Will the share price rebound above 57 cents by Dec 2014 ?

Monday, June 3, 2013

Equal Weight STI Investment

This post is about Equal Weight investing.

There is a theory that Equal Weight investment through ETF provides better returns than investing through regular ETF.

This is because in a regular ETF, one would allocate money in proportion to the weight of the stock in the index, while in Equal Weight investment, one allocates money equally.

In theory, this seems like a great idea. Let us kick the tires a bit and see if this holds true in Singapore.









Code Stock Price Today
BN4.SI Keppel Corp Ltd 10.55
C07.SI Jardine Cycle & Carriage Ltd. 46
C09.SI City Developments Ltd. 10.72
C31.SI CapitaLand Limited 3.46
C38U.SI Capitamall Trust 2.12
C52.SI ComfortDelGro Corporation Limited 1.89
C6L.SI SIA 10.6
CC3.SI StarHub Ltd. 4.03
D05.SI DBS Group Holdings Ltd 16.46
E5H.SI Golden Agri-Resources Ltd. 0.57
F34.SI Wilmar International Ltd 3.23
G13.SI Genting Singapore PLC 1.43
H78.SI Hongkong Land Holdings Ltd. 6.97
J36.SI Jardine Matheson Holdings Ltd. 65.3
J37.SI Jardine Strategic Holdings Limited 40.2
JS8.SI CapitaMalls Asia Ltd. 1.94
MC0.SI GLP 2.74
N21.SI Noble Group Ltd 1.03
NS8U.SI HPH Trust US$ 0.8
O32.SI Olam International Ltd 1.74
O39.SI Oversea-Chinese Banking Corp Ltd 10.35
Q0F.SI IHH 1.6
S51.SI SembCorp Marine Ltd. 4.32
S59.SI SIA Engineering Company Limited 5.03
S63.SI Singapore Technologies Engineering Ltd. 3.99
S68.SI Singapore Exchange Limited 7.34
T39.SI Singapore Press Holdings Limited 4.29
U11.SI United Overseas Bank Ltd. 20.91
U96.SI SEMBCorp Industries Ltd. 4.84
Z74.SI SingTel 3.79

The above are the prices of the STI stocks today.


Code Stock Price Today Price Last Year Gain / Loss (%)
BN4.SI Keppel Corp Ltd 10.55 9.39 12.35%
C07.SI Jardine Cycle & Carriage Ltd. 46 Down
40.38
13.92%
C09.SI City Developments Ltd. 10.72 Down
9.58
11.90%
C31.SI CapitaLand Limited 3.46 Up
2.48
39.52%
C38U.SI Capitamall Trust 2.12 1.785 18.77%
C52.SI ComfortDelGro Corporation Limited 1.89 Down
1.45
30.34%
C6L.SI SIA 10.6 Down
10.25
3.41%
CC3.SI StarHub Ltd. 4.03 Down
3.21
25.55%
D05.SI DBS Group Holdings Ltd 16.46 Down
12.95
27.10%
E5H.SI Golden Agri-Resources Ltd. 0.57 Up
0.635
-10.24%
F34.SI Wilmar International Ltd 3.23 Down
3.51
-7.98%
G13.SI Genting Singapore PLC 1.43 Down
1.465
-2.39%
H78.SI Hongkong Land Holdings Ltd. 6.97 5.41 28.84%
J36.SI Jardine Matheson Holdings Ltd. 65.3 Down
47.45
37.62%
J37.SI Jardine Strategic Holdings Limited 40.2 Up
29.5
36.27%
JS8.SI CapitaMalls Asia Ltd. 1.94 Up
1.375
41.09%
MC0.SI GLP 2.74 Down
2
37.00%
N21.SI Noble Group Ltd 1.03 Up
1.09
-5.50%
NS8U.SI HPH Trust US$ 0.8 0.68 17.65%
O32.SI Olam International Ltd 1.74 Up
1.55
12.26%
O39.SI Oversea-Chinese Banking Corp Ltd 10.35 Down
8.25
25.45%
Q0F.SI IHH 1.6 Down
1.285
24.51%
S51.SI SembCorp Marine Ltd. 4.32 Down
4.27
1.17%
S59.SI SIA Engineering Company Limited 5.03 Down
3.92
28.32%
S63.SI Singapore Technologies Engineering Ltd. 3.99 Down
2.91
37.11%
S68.SI Singapore Exchange Limited 7.34 Up
6.06
21.12%
T39.SI Singapore Press Holdings Limited 4.29 Down
3.78
13.49%
U11.SI United Overseas Bank Ltd. 20.91 Down
16.97
23.22%
U96.SI SEMBCorp Industries Ltd. 4.84 Down
4.74
2.11%
Z74.SI SingTel 3.79 Up
3.05
24.26%

These are the prices and gains / losses over the last one year .

In terms of money, you would have needed 241,375 SGD to construct this portfolio with a 1000 shares in each stock.

That would have grown to 298,240 SGD over the last one year, an appreciation of 23.56%.

In terms of the STI itself, it appreciated from 2,760 to 3,274, an appreciation of 18.65%.

The STI ETF also provided similar gains, growing from 2.78 to 3.31, a gain of 19.06%.

Funnily, the Equal Weighted STI stock assuming one invests equal money gained only 18.94%.

So, in a nutshell, the normal stock investment method works better than the Equal Weighting method, at least in Singapore, in 2012-2013.

This is not to say that this method will not work.

I guess, this method will work in a choppy market, maybe, while it will not work in a momentum driven bull market, which is what we have been in.










Monday, April 29, 2013

Lum Chang Holdings

This post was sparked off by an article in The Edge on Lum Chang Holdings.


Year Dividend Growth(%)
2012 0.02 0%
2011 0.02 0%
2010 0.02 33%
2009 0.015 0%
2008 0.015 -52%
2007 0.031 150%

A look at their dividend record shows that while they have been consistent in the last three years, there have been cuts in the past.


A look above at their all time share price record shows that their share price is slowly recovering from all time highs.



Applying book value growth rate and dividend discounts to this, the fair price one gets for Lum Chang as on date is 34.2 cents.

The share is trading at 34.5-35 cents today i.e. it is priced to perfection.

Having said that, if you want an investment at fair value, which gives you 5.7% yield, this is a good idea.

Thursday, April 25, 2013

CDW Holding Limited

This post is on CDW Holding.

A link to the company is here

http://www.cdw-holding.com.hk/index.htm


I have examined the company over the long term .

The chart is downright ugly






You are seeing a massive destruction of value over the last eight years or so.

However, things are okay when looked at from a five year perspective





Their dividend over the last years is as below



Year Dividend Growth(%)
2012 0.011 42%
2011 0.008 1%
2010 0.008 -8%
2009 0.008 16%
2008 0.007 66%
2007 0.004 -65%
2006 0.012 -27%
2005 0.017 24%
2005 0.014



Now, you may say, okay, that is nice from a historical perspective, all good, so, what is next?

Short answer is that the value of CDW seems to be around 14 cents per share, which is what it is trading at currently.

The dividends are in USD, so, if you want some USD exposure in terms of future income at a 7.8% yield.

14 cents is a fair price to pay for CDW, however, due to momentum, it may head to 16.5 to 19 cents within a year's time.

I expect some yield compression to drive this.

I also expect them to declare a dividend of 0.8-0.9 US Cents for the year

The way I will look at evaluating this call is

a) Does the share price reach 16.5 to 19 cents from now till April, 25, 2014 ?
b) Does the company declare a dividend of 0.8 - 0.9 cents for the year ?

The returns expected are between 17-35% if you get in at 14 cents and liquidate at 16.5 or 19 cents respectively

Sunday, March 31, 2013

AEI Corporation

This is a post on AEI Corporation.

Have a look at the very latest one year trend on AEI Corporation

This is a very positive chart, looks good, does it not, almost 20% returns from a year back.

However, if you go back a year, you would have lost 26%.


This is from 2011 to 2012.

Going further back, one would have got phenomenal 150% returns






One does not know what the future holds, however, for what it is worth, their dividend payout is quite steady.

As on date, that is a 6.7% yield. my advice for now would be to wait till the stock goes ex-dividend, at which point it is likely to slump to around12 cents and then pick it up for a steady 8% payout regularly.

The ex dividend date is around May 2013.

The metric for evaluation is whether

a) The stock falls to around 12 cents from May to December 2013.
b) Does the company declare a 1 cent dividend in its next financial year ?

My estimate is that both will occur.

I will do a follow up next year on this.




Year Dividend Growth(%)
2013 0.01 0%
2012 0.01 0%
2011 0.01 -67%
2010 0.03 300%
2009 0.008 -25%
2008 0.01 67%
2007 0.006 -60%
2006 0.015 11%
 
The dividend y























Tuesday, March 26, 2013

Eu Yan Sang

This is a post to determine the value of Eu Yan Sang.

The website of Eu Yan Sang is http://www.euyansang.com

Stripping out working capital changes, the basic numbers look like this


Parameter 2009 2010 2011 2012
Net Income 13.1 19.2 25.3 16.4
Depreciation 7.2 7.2 6.5 7
Capital Expenditures -6.8 -4.7 -7.3 -12.9
FCF 13.5 21.7 24.5 10.5
Total Current Liabilities 55.9 62 62.1 91.1
Total Equity 93.4 107.9 121.8 135.2
Total Liabilities 61.1 68.5 79.2 133
Common Shares Outstanding 445.44 445.44 445.44 445.44
Capital Employed 98.6 114.4 138.9 177.1





FCF Return on Invested Capital 0.136917 0.189685 0.176386 0.059289
FCF Return on Equity 0.13286 0.167832 0.182145 0.092603
FCF / Share 0.030307 0.048716 0.055002 0.023572
Equity Growth 13.12%


Shares Growth 0.00%


Book Value 0.209682 0.242235 0.27344 0.303521
20 Year AAA Bond Rating 4.76%


Risk Free SGD Interest 4%


BV Growth
16% 13% 11%

Using  these numbers, the estimated value of EYS as on date is between 90 to 97 cents per share, if you have a holding period of 20 years in mind.

The shares are priced at 62 cents as on date.

Full Disclosure : I am neither long nor short this share.




Monday, March 25, 2013

Datapulse : A Review of the trading idea

I had done a post on August 12, 2012 to outline a trading idea on Datapulse.

The trading idea was this.
"Datapulse is currently trading at 19 cents a share.
They are not likely to post a loss for the 2H of 2012 (From their 9 month report).
I expect Datapulse to declare a dividend of 1.8 cents for the year.
Once the results is announced, or leading up to the announcement, the share price will appreciate to around 22.5 cents.
You can buy in at 19 cents and get out around 22.5 cents to generate a return of 18% for a three month holding period."
 
 
To cut a long story short, the stock appreciated to 22.5 cents from 19 cents.
 
Assuming you had followed the trading idea, you would have made around 18%, not for three months, but for  around one month.

The stock is currently priced at around 20.5 cent.
 
The old trading idea still holds valid.

You can look to nibble at this stock at prices below 19 cents (I am pretty sure that it will hit those levels sometime before August).

Once it crosses 22.5 cents, look to get rid of your holding.

Sunday, March 10, 2013

UOL Group Limited

A friend of mine had asked me about UOL Group limited.

I took a cursory look at its charts and it looks like there has been a stupendous rise in the last four years.


One has to go all the way back to 2008-2009 to see a steep drop of 43% in share value


In fact, the stock recouped its losses and more than made up in 2009 to 2010.
 





So, does this mean that UOL is set for another big run to $10?

Short answer is no.

Long answer is unlikely.

The trend shows that in a matter of a month or so, it can lose upto 40% of its value, we saw that in the 2011 to 2012 chart.

My suggestion would be to stay clear of this stock.


Sunday, February 17, 2013

Vicom

My apologies for the long gap in writing, have been terribly busy and blog posts had taken a back seat.

SGX has a new tool on its site which allows you as an investor to calculate the dividend discount pricing for a stock.

http://www.sgx.com/wps/portal/sgxweb/home/investor_tools/dividend_discount_calculator

This above is the URL for the tool.

Applying this tool to Vicom, we can see

a) Current earnings is 29.89 cents per share
b) Annual dividend is 18.2 cents per share
c) Earnings is growing at 4.2%

Assuming one wants 8% return for investments, then using a five year window, the price is 5.1 for Vicom.

Using a 1 year window is 5.06 and a twenty year window it is worth 5.2 as on date.

The share is priced at 5.06.

No great discount available, so, if you buy at this price, you are paying fair value.