Tuesday, 1 January 2008

2007 in Review

Cash Portfolio
2007 has been a good year for my cash portfolio. NAV of my cash portfolio has increased by 49.4% from $1.44 to $2.15.  I have no confidence that I will repeat this performance in 2008 but I believe that in long term (10 to 15 years), getting a compounded return of 10% from stock can be quite easily done.  With this record-breaking performance, my compounded return over the 8 years is 10.1%.
The best move of the years must be the selling of People’s Food.  PFood was sold at an average price of $2 after it announced shortage of pigs.  Since then, the price has retracted to $1.11, which translates to a PE of 10 but I will continue to monitor the situation before getting back to the counter.
The mistake of the year must be the series of transaction near end July.  Instead of holding on to the build up in cash position, I hurried to purchase a couple of counters which does not offer really good values and results in a loss of $2.2 k in a month.
Currently, I am still positive of long term prospect of Celestial, Pacific Andes despite sitting on paper loss.  I am confident of performance of Hour Glass, Pokka, Kingsmen Creative and Inter Roller going into 2008.  As for Mid-south, Lantrovision and Koda, I am neutral on them.
Companies that are within my radar are FSL (for its high dividend yield), Apex Pal (bold expansion plan), Pan United (benefiting from construction boom), Beauty China (re-entry if valuation becomes attractive again)
CPF Portfolio
NAV increased by 10.3% from $2.19 to $2.41.  This is the lowest YTY increase for the past 5 years but it is still much better than CPF return of 2.5%.   Compounded return for the 5 years now stand at 19.3%.
The portfolio would have better showing if I had not sold off Sincere to raise cash for Jardine C&C and this mistake is compounded by the subsequent selling of Jardine in September.  Again, I need to be discipline in holding to a winning counter instead of realizing the gain!
For the currentlportfolio, I am confident of a steady return in terms of dividend at an average yield of 6.22%.  Any positive move in price will come from market revaluating the counters due to NAV (Metro, Singlan).  Food Junction remains a wild card which I might dispose of if there are better buying opportunities.

December Update

Cash Portfolio
In December, I have added 3 new positions to my portfolio, Hour Glass, Inter Roller and Pokka. 
Hour Glass is the second luxury watch counter that am investing in.  The first being Sincere (CPF) which I have sold off after making a 60% return.  The counter continued to rise and I would have a 3-bagger if I still hold on to Sincere.  After comparing both business and valuation, I decide to purchase 5 lots at $1.64 (I miss the $1.44 price earlier in the year) and luck was on my side as news on acquisition of Sincere causes the price of Hour Glass which was trading at a discount to Sincere to spike up.  I am positive of Hour Glass FY2007 performance and expect an even better showing for FY 2008.
Inter Roller’s main business is handling of cargo in airport.  I knew the company since 2006 and am positive about the management and their business.  However, I have not bought the counter before as its valuation is steep.  The company reported a large drop in profits in 20071H and this causes its share price to plummet too.  The steep drop in profit is attributed to slow in getting contract for the year.  I expect this to be a one-off event and view the present price of $0.625 a good one to hold a very small stake of 5 lots.  If the price slides further on announcement of final year results, I will pick up another 5 lots of this well managed company.
I have got to know about Pokka from a forumer dydx from Wallstraits this year.  Of course, I know and have drunk Pokka drinks (especially green tea) before this year.  The company’s results has not been consistent but has done exceptionally well in 2007.  It final results should be impressive which makes current price of $0.47 valuing the company only at a PE of 6.1 (or 4.2 after deducting cash).  I THINK the company might have found the correct strategy in its expansion plan and if this is true, future is bright.
CPF Portfolio
Received dividend of $328 from Metro.  Thank you.