Friday, August 23, 2013

The different classfication of businesses by Peterlych

Interesting to learn he classify companies into different groups and develop different valuation to them.

1) Growers

2) Asset Plays

3) Stalwart

4) Turnarounds

5) Cyclical

Looking at my own portfolio,  SPH will fit into the stalwart category, as with the various GLC in SIngapore.

Cyclical could include YZJ, Golden agri

Asset plays?

Turnarounds? I stay away from this 

Perhaps its time to look at growers, Trek used to fit the bill, but turn out to be a lemon, others that might have the potential does not have strong balance sheet, perhaps its time to dig deeper. 

I wonder what are the reits call?

Namlee pressed metals actually fit into nothing, although it pay nice dividends, but dividend play should be at least 7% for those with leader position and maybe 8% for smaller ones, NamLee does not fit into both, It is bought for the NAV and cash generating story, which had soured.


Tuesday, August 20, 2013

Review : Chapter 13, 1 up on wall street

PE should equate to growth rate, PE = 5 means you expect a 5% growth, so if a company is trading at PE 5 and you expect a 10% growth, then you have a deal.

Next is Long term growth+yield divide by PE, the higher the better, 1.5 is neutral, 2 is good, 3 is a steal.

Ways to gauge growth, order book and projects sold under development. Also take 10 years earnings, take av of last 3 years and the latest 3 years, there should be a growth and no losses in any year. Check also gearing level

* the closer you get to the finished products, the greater the "discount" you assigned to it, if you are commodity, CPO, the NAV is relative conservative, the inventories might need less discounting.

Effect on capex, monitor capex plans over a long period of time.

True growth, are growth that outpaced the receivables and  inventories


Monday, August 19, 2013

NDP rally




Heard a lot of complaints about the NDP rally.

Seriously, I think there is too much cynicism

Why would one even dream of thinking all the social spending will come free, there is no free lunch in this world, and SIngapore is a aging country, you do not want immigrants to top up the population, but you want better social spending? Does it mean sense to you?

I think its good to talk about future development, even if it is just a projection. The Paya Lebar development can be twisted into wasting tax payer money, backyard for the rich, magnet for overcrowding. Come on...

I think Singapore deserve better 

Sunday, August 18, 2013

All that I have learned about reits

I learned quite a lot about reits from valuebuddies, many points which I might have missed earlier, and will use this post to recap:

1) Importance of sponsor during crisis does matter, but only if sponsor is also a large stakeholder.

2) Prudence capital management, means spreading out the loans and stretch them as many as possible, when interest rate are still low, those that also depend on short term loans, or worse use short term loans to increase gearing, are not prudent.

3) If the loan repayment is lower than 1 year of distributable income, it speaks volume of their prudence in capital management.

4) Different sources of capital, MTN, no concentration with a single bank.

5) Properties valuation and NPI yield offer little protection when crisis hit, although they offer insights to operation effectiveness and strength.

At such, Sabana is really an unknown, the CMF, who offer CMF? What is the counterparty risk of CMF? They did spread out their loans when opportunity comes, and got a better yield, but its only over 3-4 years, and the annual income could not cover any single year.

Cambridge is worse, will not touch cambridge, in my opinion, they are gearing up for more AEIs etc, they are proactive, but not prudent, many of their loans are short terms, which exposed them to risks, and their performance rewards structure reward them to do such aggressive expansion