QAF- Sound business of bakery, but low barrier of enteries, market leader position for years, maybe close to a decade???
Spin off of company a potential catalyst, expanding into china, bakery business.
Diary farm
NOL, strategic investment singapore, might be nationalised. bottom of cycle?200% return??? Look more into details. When its trading at $4,what is its profits??? no. of years of cycle???
Defensive and big market presence.
1) Telcos
2) Utility- what companies???
Maybe i should really sell my s-chips to raise funds
Wednesday, August 29, 2012
Wednesday, August 22, 2012
factors to consider b4 buying
Remember, patience is key to investment
buy only when score is 7/10
sell to profit, do not take into consideration negative,
Should have sold anchun:4, foreland 5, can still hold
1) Market sentiment,
VIX below 20, means Negative; 20-30, neutral; above 30 positive, above 45 highly positive
More than 10% gainhighly negative ,5-10% gain, negative, No correction from recent peak,/or 0-5% correction,neutral, 5-10% correction neutral, above 10% positive, more than 10% highly positive
2) Sector prospect
Monopoly or very high barrier to entry, positive
Highly defensive/ or at the trough of cyclical, positive (Earnings resilience at the face of crisis)
3) Company credibility
No red flags, positive
Strong cash flow, good valuation- debt ratio, consistent margin and revenue and profits with sector, all factors in highly positive, only 1 missing, positive
execution record, Plans executed without/with minimum delays
management assessment, how often is its forward looking statement fulfilled, are they candid with challenges or overly bullish?
4) Valuation Gap
>50% highly positive, 30-50% positive, 10-30% neutral, 10% or lower, negative
Potential to be around for decades?
Dividends to be collected over investment periods?? minus worst case scenario price. e.g. singpost price during GFC assume 60 cents , potential loss46 cents, assume 6.25 cents for10 yrs,62.5 cents, as compare to UMS, not worth it.... esp china stocks...
buy only when score is 7/10
sell to profit, do not take into consideration negative,
Should have sold anchun:4, foreland 5, can still hold
1) Market sentiment,
VIX below 20, means Negative; 20-30, neutral; above 30 positive, above 45 highly positive
More than 10% gainhighly negative ,5-10% gain, negative, No correction from recent peak,/or 0-5% correction,neutral, 5-10% correction neutral, above 10% positive, more than 10% highly positive
2) Sector prospect
Monopoly or very high barrier to entry, positive
Highly defensive/ or at the trough of cyclical, positive (Earnings resilience at the face of crisis)
3) Company credibility
No red flags, positive
Strong cash flow, good valuation- debt ratio, consistent margin and revenue and profits with sector, all factors in highly positive, only 1 missing, positive
execution record, Plans executed without/with minimum delays
management assessment, how often is its forward looking statement fulfilled, are they candid with challenges or overly bullish?
4) Valuation Gap
>50% highly positive, 30-50% positive, 10-30% neutral, 10% or lower, negative
Potential to be around for decades?
Dividends to be collected over investment periods?? minus worst case scenario price. e.g. singpost price during GFC assume 60 cents , potential loss46 cents, assume 6.25 cents for10 yrs,62.5 cents, as compare to UMS, not worth it.... esp china stocks...
Tuesday, August 14, 2012
foreland
Results is better than expected,
but some burning questions from second quarter results-2012
1) Why is dividend not declared when they are increasing cash hoard, maybe waiting for a long winter? Or is it another fibretech in making??? Worse, why did they claim not to have declare a dividend when they have done so in 2011
but some burning questions from second quarter results-2012
1) Why is dividend not declared when they are increasing cash hoard, maybe waiting for a long winter? Or is it another fibretech in making??? Worse, why did they claim not to have declare a dividend when they have done so in 2011
Wednesday, August 8, 2012
Notes taking from reading- essentials of warren
1) Type of business, franchise and commodity. (Warren choice is company at stage 3 and 4 of their devlopmemt)
i)Franchise,
No regulation
No substitution
Pricing flexibility
ii) Consistent operating history
-> NO makeover of product or change in managment
iii) Managment
Candid assessment
How they deal with extra cash. ROE better than cost of capital, ROE: ROA, the bigger the better Otherwise, return thro dividends or share buyback
Impact of PPE, if >50% of total assets, consider capital intensive
performance,their plan and the execution
i)Franchise,
No regulation
No substitution
Pricing flexibility
ii) Consistent operating history
-> NO makeover of product or change in managment
iii) Managment
Candid assessment
How they deal with extra cash. ROE better than cost of capital, ROE: ROA, the bigger the better Otherwise, return thro dividends or share buyback
Impact of PPE, if >50% of total assets, consider capital intensive
performance,their plan and the execution
Monday, August 6, 2012
Saturday, August 4, 2012
research singpost
Concerns:
Relatively new CEO that is spearheading its tranformation from a mail delivery business to a business of 5 pillars of growth. Although 3 out of the 5 pillar of growth are in areas where synergy with the mail business are evident, its still a venture out of their core business, which is declining due to the the digital age.
4 pillars of growth has no leadership position.
Capital expenditure will be higher than usual
Why would anyone pay for digital mailbox when there are so many free application that can offer up to 50 G free space, those applications mentioned by singtel was unheard of except v-post.
What is this digital business proportion of total revenue?
Logistic business, how successful will it compete against other logistic giant?? Check the trend of this sector
Margin is recovering from Q1, from 4% to about 6%, revenue has continued to increased abeit a slower pace, Q2 will be important results. Sucess in increasing volume, but not margin. Will they continue to throw money in reforming Quantium, when will it stop? Even if results are to improve, unlikely dividend will be raised, since they just have a money raising exercise, they would need to buy more. Aquisitions coming... Potential for growth... Execution not actually fantistic.... 3 yrs have passed with no fruits to bear...
Mail sector is expect to continue to dimish
Relatively new CEO that is spearheading its tranformation from a mail delivery business to a business of 5 pillars of growth. Although 3 out of the 5 pillar of growth are in areas where synergy with the mail business are evident, its still a venture out of their core business, which is declining due to the the digital age.
4 pillars of growth has no leadership position.
Capital expenditure will be higher than usual
Why would anyone pay for digital mailbox when there are so many free application that can offer up to 50 G free space, those applications mentioned by singtel was unheard of except v-post.
What is this digital business proportion of total revenue?
Logistic business, how successful will it compete against other logistic giant?? Check the trend of this sector
Margin is recovering from Q1, from 4% to about 6%, revenue has continued to increased abeit a slower pace, Q2 will be important results. Sucess in increasing volume, but not margin. Will they continue to throw money in reforming Quantium, when will it stop? Even if results are to improve, unlikely dividend will be raised, since they just have a money raising exercise, they would need to buy more. Aquisitions coming... Potential for growth... Execution not actually fantistic.... 3 yrs have passed with no fruits to bear...
Mail sector is expect to continue to dimish
Stock radar
Mistakes made:
Hoping for quick turnaround stories.It does happen, but the risk involved might not be worth it.
Over weight age on penny and speculative stocks. The problem will correct itself in the next 5 years when no more money is plough into such counters even if i do nothing.
Getting stock ideas from forums, investor reports. The focus of reading such reports should be understanding the business, and not what are the flavor of the month.
What should be under my radar:
Companies with long term prospects, would be around in the next decade. With a yield of 5% and assume price does not improve, its still a 50% gain in 10 years.
What are companies with long term prospects:
1) Unshakable leader position - e.g. PSA, SPH, singpost, transport
2) Management stability and execution
3) Near monopoly of market, e.g. Singtel, Singpost, SPH, transport
4) High barrier of entry for competitors. SPH, singpost, SMRT
5) Need no frequent high capital expenditure to grow. PSA, road toll companies, SPH,
6) Has a focus for its core business.
7) Track record. 10 yrs at least
Great business need a fair price, what is a fair price?
1) Price during a bear market
2) Solvable barriers /problems
3) Valuation metric, yield >6% fair if all conditions, >7% if just some conditions on business robustness meet. (see above)
4) Projected future growth, taking worst case scenario
5) Understand the business.
Hoping for quick turnaround stories.It does happen, but the risk involved might not be worth it.
Over weight age on penny and speculative stocks. The problem will correct itself in the next 5 years when no more money is plough into such counters even if i do nothing.
Getting stock ideas from forums, investor reports. The focus of reading such reports should be understanding the business, and not what are the flavor of the month.
What should be under my radar:
Companies with long term prospects, would be around in the next decade. With a yield of 5% and assume price does not improve, its still a 50% gain in 10 years.
What are companies with long term prospects:
1) Unshakable leader position - e.g. PSA, SPH, singpost, transport
2) Management stability and execution
3) Near monopoly of market, e.g. Singtel, Singpost, SPH, transport
4) High barrier of entry for competitors. SPH, singpost, SMRT
5) Need no frequent high capital expenditure to grow. PSA, road toll companies, SPH,
6) Has a focus for its core business.
7) Track record. 10 yrs at least
Great business need a fair price, what is a fair price?
1) Price during a bear market
2) Solvable barriers /problems
3) Valuation metric, yield >6% fair if all conditions, >7% if just some conditions on business robustness meet. (see above)
4) Projected future growth, taking worst case scenario
5) Understand the business.
Friday, August 3, 2012
investment strategy
What is my investment strategy
1) Enough cash set aside for a bear market
2) Invest in high yield instrument that can give a sustainable yield of 7%
3) What is my problem?
20% - speculative penny or mid-size counters to seize market opportunity (Anchun + foreland)
50% reits or trusts or high dividend companies of high dividend yield for at least 2 years. (HpH + UMS)
30% Blue chip companies that have yield above 5% (None) (Banks, mid-size property, SPH, telecom, utility?)
Be patient, take baby steps to correct mistakes, keep a log of why you buy or sell a company.
1) Enough cash set aside for a bear market
- How much cash is enough?
- There must beat least 2 months cash set aside for emergency
- At least 30% of investment money should be in cash unless all definition of bear market is fulfilled
- How do you know its a bear market?
- A correction of more than 20% has taken place
- VIX hits above 35
- Counter hit historical low in terms of price.
- What to invest in a bear market?
- blue chip companies that give a yield of above 6%
2) Invest in high yield instrument that can give a sustainable yield of 7%
- How to measure sustainability?
- check company performance over multiple business cycles. Where is the company at now? Has company seen worse time and survive?
- Peer comparison, how did company do compare to others.
- What is its financial status? debt level, brand name, pass red flag test??
3) What is my problem?
- Lack of cash
- stock up on cash instead. Bear market definition not fulfilled
- Poor cash flow
- Increase cash flow by $50 per month, and then by $200 2013 onwards
- Money already tied up in the stock market
- Exit profitable counter that doesn't fill your portfolio
- Poor portfolio management. What is the composition of your portfolio?
20% - speculative penny or mid-size counters to seize market opportunity (Anchun + foreland)
50% reits or trusts or high dividend companies of high dividend yield for at least 2 years. (HpH + UMS)
30% Blue chip companies that have yield above 5% (None) (Banks, mid-size property, SPH, telecom, utility?)
Be patient, take baby steps to correct mistakes, keep a log of why you buy or sell a company.
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