Thursday, November 17, 2016

"Nov 16" - SG Transactions & Portfolio Update"‏

No.
 Counters
No. of Shares
Market Price (SGD)
Total Value (SGD) based on market price
Allocation %
1.
IReit Global
73,000
0.73
53,290.00
12.0%
2.
ST Engineering
15,000
3.20
48,000.00
11.0%
3.
Kingsmen
45,000
0.62
27,900.00
6.0%
4.
Fraser Logistic Trust
20,000
0.92
18,400.00
4.0%
5.
FCL
10,000
1.51
15,100.00
3.0%
6.
Micro-Mechanics
15,000
0.84
12,600.00
2.0%
7.
Singtel
3,000
3.67
11,010.00
2.0%
8.
Ascott Reit
10,000
1.13
11,300.00
2.0%
9.
M1
5,000
2.00
10,000.00
2.0%
10.
First Reit
8,000
1.30
10,400.00
2.0%
11.
OCBC
1,134
8.83
10,010.00
2.0%
12.
CDL Hospitality Trust
7,000
1.32
  9,240.00
2.0%
13.
UMS
15,000
0.61
  9,150.00
2.0%
14.
Warchest*
210,000.00
46.0%
Total SGD
456,400.00
100.00%

This has been a very eventful month as we witness a rather surprising event in the US Presidential election earlier in the month. When we have such an important macro event, it means that there are volatility in the markets which translates into opportunities.

Who would have known that the markets would surge higher as Trump is elected the new President. It also appears that interest rates are finally moving into the territory that everyone is waiting for.

From a personal lifestyle front, I didn't lose sleep onto all the events taking place. In fact, I'm taking advantage of the cheap Ringgit by heading into a 3D2N Weekend Staycation at the KSL Resort & Hotel. It was a really nice, refreshing and cheap short holidays given that my wife is unable to travel due to her pregnancy.

Meanwhile, back on the portfolio, I have added a couple of new additions into the portfolio on some of these opportunities I have identified for this month.




First, I added 15,000 shares of UMS at a price of $0.605. This is a company which I have always been rather skeptical off in the past despite yielding very good dividend yield and a clean state balance sheet. There is a concentration risk in the form of their main customer, AMAT, and this is probably one of the main reason the company has been shun for many years. Still, year after year, they are proving its worth and everyone's wrong. AMAT has recorded their biggest order book to date and this has somewhat been reflected in their performance, though I am secretly hoping that UMS get a pie of that share. The main thesis comes from the prediction that semiconductor demand will be growing in the next 1-2 years at least and that means it'll be relatively safe for UMS to retain their current earnings and cashflow and pay out their 5-6 cents dividends to shareholders. That translates to almost 10% yield at current price.

I have also similarly added 15,000 shares of Micro-Mech at a price of $0.84 on the same thesis. I had the luck of adding them right before they went ex-dividend so I am entitled to that 4 cents dividend (that's $600 in absolute amount!!!). The difference between this and UMS is that Micro-Mech covers different segmentation of the semiconductor in a separate segment, e.g Medical, trans-robotic. Should they remain their 6 cents total dividend, that still translates into 7.1% yield, so it's another solid dividend yield play for the portfolio.

I also added 7,000 shares of CDL Hospitality Trust at a price of $1.31 which I blogged here in more detail. This is one which I am still keen to add on to my position, be it now at current price or if it goes lower.

I have also used the recent result weakness to add onto ST Engineering by buying additional 2,000 shares more at a price of $3.13. The recent result was weakened mainly due to the impairment impact and a rather lackluster Land and Aerospace division. I doubt things are going to move fast from here but I have conviction in their long term prospects. It is also currently trading at their lower end of the valuation. The USD is also getting stronger as compared to the SGD and this should also translates into stronger earnings for STE.

I have also recently jumped on the crowded bandwagon of M1 trade by nibbling 5,000 shares at a price of $2.05. My thesis for M1 is more blended towards because I find the recent selling way too oversold given that they still have strong operating cashflow and are able to pay a dividend, which will seemingly be cut but still decent yield at current share price. The 4th telco news have also recently been confirmed and while M1 will be affected, the impact will not be as immediate and severe as what many people would think. Not at least in the initial 2 to 3 years impact. Data center is also on the go which I think M1 would strategize into these area more.

Last but not least, I also added my position in Fraser Logistics Trust by purchasing 20,000 shares at a price of $0.935. I identified this as one of the stronger (top 3) industrial reits around that we have (the other two being AReit and MINT) and it is not difficult to look at why. The Australian market is a huge market which most industrial reits are fighting to go into at the moment to get a piece of the pie. My fellow blogger, Kyith has written an extensive detailed analysis of the company here which you can study in more detail.

The Reits boast a 6.9 years WALE, a decent dividend yield of 7% and a rental reversion built in at 2.8%. Their gearing is also low at 28% and it paves the way for more acquisitions in the future. In addition, the forex seems to also favor the AUD against the SGD.



The portfolio is tracking back in the right direction again this month after a slight dip last month.

The portfolio has increased from the previous month of $441,867 to $456,400 this month (+3.3% month on month; +28% year on year).

In terms of cashflow, I have got to start saving up as there are a few big expenses are coming up - mainly the hospital and caesarian fees (which I will blog more in further details) and also the cost of hiring the nanny. The school fees is also starting to come, so it'll be a hell lot harder to maintain a positive cashflow in the next 3 to 4 months. Still, I'm making sure my working capital works decently fine. Luckily, the dividends are coming in the next few months ahead, so it helps alleviate and mitigate the higher expenses.

With only a month left to go, let's see how we are faring as we prepare to close the year. This year has been a very successful year in terms of how the portfolio fares in the difficult market and I hope it'll keep to be the same for many more years to come.

Thanks for reading.

How is everyone positioning their portfolio allocation these days? More cash on the sidelines than before and waiting for the crash? Or followed the trajectory Trump leads in the stock market?


15 comments:

  1. Crazy portfolio got crazier! Now it is looking like mine HAHA!

    ReplyDelete
    Replies
    1. Hi Kyith

      I know right!!! you are the source of the detailed analysis and we keep talking about the same companies in our chat group, so naturally most of our companies look the same. Ha!!!

      Delete
  2. Everyone most probably got very busy after trump won. I too added M1, Comfortdelgrow and Chuan Hup.

    ReplyDelete
    Replies
    1. Hi TUB

      You are as busy making transactions!!! Looking forward to seeing your updated portfolio (if you still publish this). Seems like your warchest is also recycled and replenished now ;)

      Delete
  3. Yah ! , I was thinking whether to add SIN Tel or Capital Land recently ,,, finally bought more M1 and SIN Tel in last two weeks ,,, now TEL Co is about 5% of my total portfolio ,,,, if mean reversion not happen soon ,,, will just happily collecting the dividend ,,
    Cheers :-)

    ReplyDelete
    Replies
    1. Hi STE

      That's also my plan.

      With telcos, the dividend should be able to mitigate the losses and it's still not a bad yield even though it has dropped. Like you, I do hope that i wont have to eat panadol for a long time though :)

      Delete
  4. Hi,do you mind to tell what is the ireit entry price u bought?

    ReplyDelete
    Replies
    1. Hi Wilson

      I bought a few batches at around 72 cents then more when they went to as low as 62 cents and then even more when they go up to 68 cents and then 71 cents and then 73 cents.

      I can't exactly recall what's my average price for this counter also.

      Delete
    2. Ireit dividend yield not bad.. im still consider or top up UMS..

      Delete
    3. Yea the yield is still not bad though the strategy they are moving around more of Europe. I wonder which cities would they go to outside Germany.

      Delete
  5. hi B,

    good entry points on those counters.

    Starhub is quite oversold too.
    whats the rationale for choosing m1 over SH?

    ReplyDelete
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