Tuesday, March 31, 2015

Portfolio inches up 1.0% month-on-month

The portfolio ended the quarter on a positive note. The end-March value was SGD125,567 of which SGD 6,000 was in cash. The portfolio was 1.0% higher month on month and 4% higher on a year-to-date basis.

For the month of March, GMG Global and Super Group were the top performers adding 18.6% and 24.7% in share price respectively. Both companies reported poor results that were within expectations. Perhaps the worst is over for the two erstwhile battered down companies.
I added 20,000 shares of KrisEnergy to my portfolio. The oil company’s share took a big hit initially but with the airstrikes in Yemen, fears prompted the price of crude to rally and in turn boosting KrisEnergy’s share price.

I think this market still has some momentum. There has yet been an increase in IPO activity nor has there been market euphoria. Therefore, I think I will stay invested in the market and pickup any dividends that is being proposed.

Friday, March 20, 2015

Don't buy shipbuilders, oil and gas services companies!

If someone were to ask me, whether do I think it is a good time now to pickup shares in Nam Cheong or Ezion, I would definitely say no. Let me explain.

Firstly, demand for their products and services has almost become non-existent. The was a boom in new offshore supply vessels and Nam Cheong probably benefited over the last five years leading to its public listing. However, with deliveries still taking place globally amidst the low oil price, there has been no new orders. For Ezion, the demand for its offshore maintenance services is recurring but I believe several of the oil and gas companies have announced budget cuts and will try to manage their operating expenses by either changing their maintenance regimes or asking for lower dayrates.

Secondly, there has been an oversupply situation in both the products and services markets. All the vessels that have been ordered over the last five years are coming online and this will depress the charter rates these vessels can obtain. When charter rates are lower, there is less incentive to order new vessels as the rate of return on these vessels have fallen. The same would apply to Ezion. There is an increase in the number of vessels, the lift boats, which can support offshore maintenance work.

Saturday, March 14, 2015

The SGD10,000 bet on KrisEnergy

A trade becomes an investment. On Tuesday, I had keyed in two trades of 10 lots for KrisEnergy at 54 cents each, one after the other. The first ten lots was to be settled and the next ten lots, contra-ed off. However, the market for KrisEnergy shares on Friday (T+3) were less liquid than usual and bids had sank to 50 cents. Contra-ing the ten lots would result in a SGD 500+ immediate loss. I have settled the trade and it now goes to my investment portfolio which is worth SGD 118,100 as of Friday closing.

Buying KrisEnergy was always on the cards for at least three reasons. Firstly, I think crude oil (Brent) prices have reached a floor and a rebound is inevitable. The full effects of the current low oil price on earnings will be seen by the second quarter of 2015 but lower

Tuesday, March 10, 2015

10 lots of KrisEnergy and SGD 100,000 capital injection mark

To simplify my portfolio calculation for the rest of the year, I have assumed that I will inject capital of SGD 20,000 for 2015 and this will be factored into my performance calculations. This would mean topping up SGD 5,000 which I have yet to have. This would allow me to reach the round number of SGD 100,000 as well as calculated my yield-to cost. YTC would be calculated by dividing the dividends received in a calendar year over the accumulated capital at the start of the calendar year. 

I have also today, pulled the trigger and acquired 10 lots of KrisEnergy shares. The interesting point of this purchase is that I received from some of the counter parties of 100-600 shares. Why would any one key in such a small number of shares on offer? Will update accordingly over the next few days. 

Sunday, March 8, 2015

HLFinance, Petra and Super Group financial results

Hong Leong Finance

Interest on loans increased 7.7% to SGD 197 million but earnings to shareholder fell 10.4% to SGD 63 million. This is due to an increase in general provision made on its loan portfolio. 

PE ratio remains stable year-on-year at around 17-18.5 times. PB fell slightly to 0.7 times from 0.72 times in 2013. Yield has however fallen to 1.9% from about 3.0% a year ago.

The softening Singapore property market as well as the Singapore economy will weigh heavily on the future prospects of the company. While the stock is priced right, I am placing Hong Leong Finance on my watchlist of stocks to dispose.

Petra Foods

Revenue fell 0.9% to USD 504 million due largely to weaker sales in the regional markets (ex Indonesia). earnings and profit from continuing operations fell 17.8% due to the weakness of local currencies against the US dollar.

PE ratio improved to 38 times from an astronomical 87 in 2013. PB remained almost unchanged at 6.2 times. Yield fell from 2.2% to 1.9%.

The sale of its ingredients division has entered into arbitration as the buyer has sought price reductions. I like the company because it is in the basic foods segment with exposure to the Indonesian market. I will hold on to this stock until there is a big special dividend.

Saturday, March 7, 2015

Financial results out for Colex, GMG Global, Hong Leong Finance, Petra Foods and Super Group

Collected my first dividend worth SGD 210 from F&N in February.

By the end of February, most of the Singapore listed-company's 2014 full-year results were out and I will review two of them quickly below.

Colex Holdings

Revenue for this waste disposal and cleaning services company increased 11.5% to SGD 58.7 million due to rollover effects of existing contracts at a higher value and new contracts secured. As a result, earnings less minority interest increased 56% to SGD 4.3 million. The improvement in net profit margins. 

Working on the recent last done price as well as a year ago, PE ratio remains stable year-on-year at around 8.2-8.3 times. PB increased to 1.4 times from 1.1 times in 2013. Yield has however fallen to 1.9% from about 3.0% a year ago.

The company cited manpower costs as the main challenge going forward. I will need to do more research how the various government incentives will impact the compact. Based on the results and ratios, I will say that the company is priced with almost no further upside unless dividend payout increases. 

Thursday, March 5, 2015

Soliciting for Singapore listed company research ideas

I am looking at dedicating some time to research on listed Singapore companies you think need more research on. These should be companies that you think have potential and are not the STI constituents or actively traded counters. Feel free to drop your ideas in the comments section or to my sgxstockpicker gmail account.