Tuesday, February 23, 2016

Brief Review of Q4 results of companies under my portfolio

The companies in my/ my wife's portfolio are APTT, FSL and Lee metals. 

I won't go into details or numbers, but what I am looking out for in their report.

1) APTT
Hope to see:
a) Tai Chung contributing, and/ or 
b) Better cross selling, with prenium TV ARPU and Rev improving
c) The above happening leading to a sustainable dividend payout

In reality:
None of the above happened. In fact, more bad news in the form of lower basic cable rate. Although the drop of 10-15 NT dollars is a small of 2-3% of ARPU, it's still a bad thing.

Capex will intensify due to new NCC ruling. I don't buy the management's statement it will lead to better bundling of products. 

Last straw is Taichung Execution is again dragging, this time due to negotiation with content providers. In their prospectus, they mention there is no killer content where there is a need to bid excessively. Yawn... 

Action: Cut Loss (Break even if dividends included)

2) FSL
Hope to see:
a) Resume of dividends
b) More tankers on fixed charters

In reality:
Both did not happen. Numbers are good and if they pay out all distributable income, it would be 3 cents. 

So, there could only be 1 reason, another acquistion in on the cards. 

Action:
1-2 quarters of review. If no acquistions and no payout/ clarity of payout, it is bye bye. Containers are expiring soon, which is scary 

3) Lee metals (lower expectations)
Hope to see:
a) no impairment to inventory
b) 1 cent dividend (excluding special dividend) to be maintained.

In reality:
Both happened. Earnings are weakened but balance sheet is stronger, FCF and NP both are able to support a yearly dividend of 2 cents, which is what I expected of management to deliver in the  down market.

Merchandising arm is almost non-existent now. Hopefully when steel recover, this arm will either contribute to bottom line or offset weakness in fabrication

Action: Hold. 

5 comments:

  1. Hi SI,

    I thought u sold APTT. Tks to u who reminded me on APTT n I sold it in my big cash out last yr.

    Lesson about APTT for me is investment in a country with uncertain politics is a dangerous thing! Esp even worst, we do not stay in Taiwan!

    ReplyDelete
    Replies
    1. Hi Rolf,

      I sold. My wife still has it. I also told her to sell, and she sold.

      She ask me why lose $1000 plus still want to sell. Lol

      I say plus dividends u not loss, throw in the towel ba.

      Delete
    2. Actually in their prospectus they did mentioned NcC lowering of rate as one of the risk.

      But the problem is, Taichung and broadband and cross selling did not work out ... At least not yet

      Delete
  2. Buy what we know and can observe performance.
    Used to be I bought mainly shares of companies I knew the people working inside and could have an idea of their culture/work performance or they were my organisation's supplier and I can see how they work.
    Also, I buy REITS where I can see how well the properties are doing and whether the management does a good job of renewing the properties.

    ReplyDelete
    Replies
    1. Hi Anon,

      I actually doubt how much info can be gleaned from workers and people working in a industry that is not available online.

      Of course, the scuttlebutt method, I have heard of it and I see the value of industry insider.

      I however, think it is overrated, because at the end of the day, I need not know how to run the business, I just need to assess if the business is understandable and making headways

      Delete