I have been thinking of selling Noble Group and Wilmar International for a very long time. FJ Benjamin and Action Asia have been added to this list because they just sank into the red in my portfolio, while at the same time not showing uplift possibility.
Noble Group has seen increases in revenue without a corresponding increase in net profit. The same goes for Wilmar International, although Wilmar has had a relatively stronger showing in the third quarter of 2013. The weakness of the result further confirms the end of the commodity super cycle but Wilmar's exposure to the food market puts it in a slightly better position going forward.
For FJ Benjamin, perhaps the lesson to be learnt here is that fashion retailing is a very difficult business. At the superficial level, FJ Benjamin has no peers in the Singapore stock market and would justify some premium. But when you realise that it has to compete with the likes of Zara, Uniqlo and H&M, the outlook gets bleaker. There was some wishful thinking on my part that the stock may someday go to the 40 cents level in 2010.
Action Asia could well be the victim of trends moving too fast in the sector. The scenario that everyone in China who has a car and have a display monitor made by Action Asia excited me. However, just look around now and everyone is using a tablet PC, be it a Samsung or an IPad.
Selling a share is never an easy job since we have to admit that we made a mistake and incur the pain of a loss. At the same time, I guess to be successful in the longer term, I would have to accept the changing business reality as well as the system that I put in place to trigger a sale.
No comments:
Post a Comment