Been investing for almost a year now.
Despite setting the goal to increase my dividend income, I don't want to rush into things and risk making mistakes. Good companies are getting more expensive and I really want to evaluate them before "nibbling", a term I caught on from some of my favourite bloggers.
Anyway, I have compiled the essence of what I have learned. Gonna jot them down here:
- Invest for the long term. Don't be afraid of volatility. Volatility works in long term investors favor. The market is a voting machine in the short term, and weighing machine in the long term.
- The easiest way to destroy your portfolio is to think you can time the market with frequent trading. Patience is your greatest asset. The toughest thing about investing is doing nothing.
- Diversify to reduce your risk. Don't pay huge fees to fund mangers. Don't use leverage.
- Cash to a business is like oxygen to a person. You don't think about it when it's present, but you will die when you don't have it. Always have emergency cash to capitalize on opportunities, and act as buffer against bad situations.
I also came across an article on when to sell a stock. Here are some signs:
- A shockingly high P/E (i.e I would classify that as above 50)
- Its economic moat (aka competitive advantage) is in danger.
- A drastic change in leadership, business model, direction.
- A stalling/falling revenue, and profit margin/earnings.
- It recently cuts dividends.
Saturday, March 21, 2015
Sunday, March 15, 2015
Stock Analysis 8: ARA Asset Management
Market Price (2015-3-15) = $1.56
*Based on full year 2014 earnings.
Earnings
Approx. EPS: $0.1035
Approx. DPS: $0.05
Ratios
P/E: 15.07
Yield: 3.2%
Profitability
ROE: 28.87% [Avg for SG blue chips is 11.8%]
Asset Turnover: 0.16178 [Avg for SG blue chips is ~0.5]
Net Income Margin:51.189
Operating Cash Flow ($101M) - Capex ($1.2M) = $101M Free Cash Flow!
Balance Sheet
Current Ratio: 1.88
Debt To Equity: 0.099
NAV: $0.4024
Additional Info
Biannual distributions in Aug/Dec. Management committed to $0.5 dividends every year. (They have done this for the past 3 years)
Personal Opinion:
This stock is in the business of asset management. They manage REITs and private funds. It has been on a downtrend for sometime, despite good earnings.
+ Amazing ROE and net income margin.
+ Proven track records, with steady dividends since 2008.
+ Bulk of revenue (management fees) are recurrent in nature and provide stable base.
+ Relatively solid balance sheet with $64M in cash and $34M borrowings.
+ At its 52 week low...
- Rising interest rates might cause the downtrend to continue.
Not at its current valuation... If the P/E drops to around 14 (in line with STI)...
*Based on full year 2014 earnings.
Earnings
Approx. EPS: $0.1035
Approx. DPS: $0.05
Ratios
P/E: 15.07
Yield: 3.2%
Profitability
ROE: 28.87% [Avg for SG blue chips is 11.8%]
Asset Turnover: 0.16178 [Avg for SG blue chips is ~0.5]
Net Income Margin:51.189
Operating Cash Flow ($101M) - Capex ($1.2M) = $101M Free Cash Flow!
Balance Sheet
Current Ratio: 1.88
Debt To Equity: 0.099
NAV: $0.4024
Additional Info
Biannual distributions in Aug/Dec. Management committed to $0.5 dividends every year. (They have done this for the past 3 years)
Personal Opinion:
This stock is in the business of asset management. They manage REITs and private funds. It has been on a downtrend for sometime, despite good earnings.
+ Amazing ROE and net income margin.
+ Proven track records, with steady dividends since 2008.
+ Bulk of revenue (management fees) are recurrent in nature and provide stable base.
+ Relatively solid balance sheet with $64M in cash and $34M borrowings.
+ At its 52 week low...
- Rising interest rates might cause the downtrend to continue.
Not at its current valuation... If the P/E drops to around 14 (in line with STI)...
Sunday, March 08, 2015
Stock Analysis 7: Boustead Singapore
Market Price (2015-3-06) = $1.67
*As a project-oriented business, I used FY2014 for earnings instead of latest quarter.
Earnings
Approx. EPS: $0.139 (for FY2014)
Approx. DPS: $0.07
Ratios
P/E: 12.1
Yield: 4.2%
Profitability
ROE: 20.7% [Avg for SG blue chips is 11.8%]
Asset Turnover: 0.75 [Avg for SG blue chips is ~0.5]
Net Income Margin: 12.3
Balance Sheet
Current Ratio: 1.79
Debt To Equity: 0.425
NAV: $0.684
Additional Info
Biannual distributions in Aug/Dec. Management committed to paying out at least 50% earnings as dividends
Personal Opinion:
+ Diverse business in Energy (~35%), Real Estate (~40%), Geo-Spatial (~20%) and Water (5%) in 84 countries
+ Long history with 12 consecutive years of dividend payout through crisis periods.
+ Fortress balance sheet: Net cash position of 160+M, Current Assets can cover ALL Liabilities.
+ At its 52 week low...
- Management has expressed "extremely challenging" business climates for oil & gas, real estate sectors.
A stock I learned and read up on over the weekend. I think they will benefit greatly in the future with all the Smart Nation stuff coming up in Singapore. Problem is they are looking to diverse the Real Estate sector into a separate business and I am not sure what is the impact. I will probably wait for that to happen before deciding if I want to jump in.
*As a project-oriented business, I used FY2014 for earnings instead of latest quarter.
Earnings
Approx. EPS: $0.139 (for FY2014)
Approx. DPS: $0.07
Ratios
P/E: 12.1
Yield: 4.2%
Profitability
ROE: 20.7% [Avg for SG blue chips is 11.8%]
Asset Turnover: 0.75 [Avg for SG blue chips is ~0.5]
Net Income Margin: 12.3
Balance Sheet
Current Ratio: 1.79
Debt To Equity: 0.425
NAV: $0.684
Additional Info
Biannual distributions in Aug/Dec. Management committed to paying out at least 50% earnings as dividends
Personal Opinion:
+ Diverse business in Energy (~35%), Real Estate (~40%), Geo-Spatial (~20%) and Water (5%) in 84 countries
+ Long history with 12 consecutive years of dividend payout through crisis periods.
+ Fortress balance sheet: Net cash position of 160+M, Current Assets can cover ALL Liabilities.
+ At its 52 week low...
- Management has expressed "extremely challenging" business climates for oil & gas, real estate sectors.
A stock I learned and read up on over the weekend. I think they will benefit greatly in the future with all the Smart Nation stuff coming up in Singapore. Problem is they are looking to diverse the Real Estate sector into a separate business and I am not sure what is the impact. I will probably wait for that to happen before deciding if I want to jump in.
Sunday, March 01, 2015
Stock Analysis 6: CMP 2014 Full Year
Market Price (2015-2-27) = $1.06
Converted using $1HKD to $0.18SGD.
Earnings
Approx. EPS: $0.16
Approx. DPS: $0.07 (Plus bonus shares!)
Ratios
P/E: 6.6
Yield: 6.6%
Profitability
ROE: 11.6% [Avg for SG blue chips is 11.8%]
Asset Turnover: 0.139 [Avg for SG blue chips is ~0.5. Not a good measure because asset heavy company]
Net Income Margin: 36.6
Balance Sheet
Current Ratio: 3.2
Debt To Equity: 0.36
NAV: $1.07
Additional Info
Biannual distributions in May/Oct. Management committed to paying out at least 50% earnings as dividends
Personal Opinion: HOLD/BUY
They are giving 1 for every 20 share bonus issue, ON TOP of a 3.5 cents dividends! That means I am going to get 5 lots for 'free'!
Unless any policy change occurs, this will be a very strong income stock for many years to come.
Converted using $1HKD to $0.18SGD.
Earnings
Approx. EPS: $0.16
Approx. DPS: $0.07 (Plus bonus shares!)
Ratios
P/E: 6.6
Yield: 6.6%
Profitability
ROE: 11.6% [Avg for SG blue chips is 11.8%]
Asset Turnover: 0.139 [Avg for SG blue chips is ~0.5. Not a good measure because asset heavy company]
Net Income Margin: 36.6
Balance Sheet
Current Ratio: 3.2
Debt To Equity: 0.36
NAV: $1.07
Additional Info
Biannual distributions in May/Oct. Management committed to paying out at least 50% earnings as dividends
Personal Opinion: HOLD/BUY
They are giving 1 for every 20 share bonus issue, ON TOP of a 3.5 cents dividends! That means I am going to get 5 lots for 'free'!
Unless any policy change occurs, this will be a very strong income stock for many years to come.
Stock Analysis 5: Super Group 2014 Full Year
Market Price (2015-2-27) = $1.195
Earnings
Approx. EPS: $0.0617 (Down from $0.0896)
Approx. DPS: $0.031
Payout Ratio: ~50
Ratios
P/E: 19.4
Yield: 2.6%
Profitability
ROE: 14.2% [Avg for SG blue chips is 11.8%]
Asset Turnover: 0.877 [Avg for SG blue chips is ~0.5]
Net Income Margin: 12.7 [Comparable]
Balance Sheet
Current Ratio: 3.2
Debt To Equity: 0.21
NAV: $0.4462 (Up from $0.4187)
Additional Info
Biannual distributions in May/Aug. Management committed to paying out 50% earnings as dividends
Personal Opinion: HOLD
A growth stock showing signs of recovery. However, I am kind of cautious that its "recovery" is due to one time asset disposal instead of increase in operating income. This is something I need to take note of in the next result.
Overall, I think it's still a solid company with good profitability ratios and good balance sheet. I brought it at too high a price, so it's gonna be a while before it recovers.
Earnings
Approx. EPS: $0.0617 (Down from $0.0896)
Approx. DPS: $0.031
Payout Ratio: ~50
Ratios
P/E: 19.4
Yield: 2.6%
Profitability
ROE: 14.2% [Avg for SG blue chips is 11.8%]
Asset Turnover: 0.877 [Avg for SG blue chips is ~0.5]
Net Income Margin: 12.7 [Comparable]
Balance Sheet
Current Ratio: 3.2
Debt To Equity: 0.21
NAV: $0.4462 (Up from $0.4187)
Additional Info
Biannual distributions in May/Aug. Management committed to paying out 50% earnings as dividends
Personal Opinion: HOLD
A growth stock showing signs of recovery. However, I am kind of cautious that its "recovery" is due to one time asset disposal instead of increase in operating income. This is something I need to take note of in the next result.
Overall, I think it's still a solid company with good profitability ratios and good balance sheet. I brought it at too high a price, so it's gonna be a while before it recovers.
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