Buy and sell actions in August

Lots of action this month. Divested a few counters but bought quite a bit with the $$$ from divestment of Best World.

Out of Favour
Divested Kingsmen Creatives at the same price I bought. This is the turnaround story that is not working out yet. It reported a poor Q2 and I decided to wait for a clearer picture before re-entering again.

Divested half my stake in ISEC at 0.315. Tiny profit. Still an interesting outfit but its growth isn't exciting enough for it to occupy the middle of my portfolio. Hence decided to hold less and watch how the story unfolds.

Sold Capital Mall Trust at 2.10. It has risen more than 10% from my purchased price. Covered 2 years of dividend. Will recycle cash to other counters that offer higher dividend yield. Might re-enter when it offers a better yield.

Sold Mircro-mechanics at 1.41. Bought purely for its track record for dividend but its price has gone up to 7 years of dividend due to its good performance. Decided to divest it as its dividend yield dropped below 5%. Surprised me with a second rise of dividend this year and with a 8 cents dividend, yield gone up to 5.6%. On hind side, should have continued to hold on to it but actually felt pretty neutral about it. Probably am satisfied with the above expectation return from the counter.

Up the Dividend
Bought a lot more counters especially REIT to increase my annual dividend. Also, I like their outlook from next year onward.

Added Fraser Centrepoint Trust at 2.07. With the AEI of North Point completing this year, next year DPU should increase. Assuming a 12 cents DPU next year, it will translate to 5.8% yield and potential upside if DPU is even higher. Possible catalyst could be acquisition of Punggol Waterway Point.

Added Starhill Global Reit at 0.76. While Orchard office occupancy could still pose a problem, AEI at Plaze Arcade in Australia is expected to be completed in 20181Q. China property would have a more stable distribution with the completion of renovation by 20174Q. Expecting a minimal 4.8 cents DPU next year. This translates to a 6.3% yield.

Bought CDL Hospitality Trust at 1.575. I have bought and sold CDLHT a couple of times for the past 4 years. Win some, lose some and overall still negative. Betting on the improvement of its hotels in the next two years. Assuming a 10 cents DPU, dividend yield is approximately 6.3%.

Bought Mapletree Commercial Trust at 1.55. A retail and office reit which I have missed for the longest time. Its DPU has been increasing since its listing. Estimating a 9 cents DPU which will give a 5.8% yield.

Bought VICOM at 5.81 (cd) and 5.65 (xd). A subdue Q2 results but with immediate effect it is paying out at least 90% of its earning as dividend. It gives more certainty that the company can maintain its dividend for the next two to three years even when revenue dropped due to increasing de-registration of cars. From 2020/21 onwards, it should see an increase in its revenue and income again with more vehicles requiring checking.

Buying into the Sell-down
Quite a number of counters were sold down for the past month, for good or questionable reasons. The sell-down provided me an opportunity to buy some shares of the counter which I think could do well in the future.

Bought Dairy Farm at USD7.45. The company has announced a decent Q2 recently and turnaround seems to gathering speed with good progress in China. The price was beaten down by 2% to 3% in one of the trading day and I deem it as an opportunity to add some.

Bought InnoTek at 0.34. The stock is beaten down because it reported a poor Q2. However, 1H is still an improvement. While the remaining year might remain a challenge, effort has been put in by management to turn the company around. Initiated the position with the belief that the turnaround will come in 2018 or 2019.

Bought mm2 Asia at 0.475. The price has dropped sharply after its GV deal did not get through. Nevertheless, it reported a good 1Q results and I decided to take a punt on it.

Bought HKLand at USD 7.46. Read about its cheap P/B and good results. Hence, decided to take a stake when its price has dropped by about 5% from its recent high.

Bought UMS at 0.995. The price has dropped sharply after guidance of moderate performance in 2H. Nimble a bit as I believe it will maintain its dividend which is a tasty 6%.

Bought 800 Super at 1.12. The price has dropped after a poor Q3. The price weakened further just before it announced its full year results. Took the opportunity to re-enter the counter which I have divested at 1.26 in April. 

Bought Singapore O&G at 0.44. The price has dropped sharply after its weak Q2 results. Took a punt on it as company is still profitable and should get better results moving forward.

US Market 
Most of my purchase decision for the US markets come from the recommendation of MF subscription services. Unlike my local counters, I did not do as much homework on them. While I think that the valuations of the counters are high, I like their future stories hence my stake in them. All my purchases are small and will slowly wait for opportunity to accumulate more shares in the future. 

Bought Vail Resort at USD210.51. Luxury ski resorts operator. It has been growing through acquisition and opportunities to grow is still available. Its plan to keep its resort busy all-year round is working out well with Epic Discovery activities coming on more than one location.

Bought Cognex at USD105. Machine-Vision systems are used all around the world. Growth expected to continue. 

Bought Priceline at USD1870. Good Q2 results but market is spooked by its lower Q3 guidance. Taking this opportunity to have one bite on it.

Bought Intuitive Surgical at USD935. Intuitive Surgical have been growing for many years and its recurring income has increased. Decided to buy 2 shares to participate in its growth even though it has a high PE of 44x. 

Looking Ahead

Having achieved a good first half results, the question is how to improve or sustain it? Best World, Food Empire and Valuetronics were the key drivers of my first half performance. Will they continue to do well in the next few years? Will other counters take over the driver seat?

I decided to make a prediction on the above questions base on my current, limited knowledge of their business and gut feel. Of course, this is speculative in nature but it provides a rough idea how my portfolio might continue to grow in the next few years.

I must say I am quite satisfied after the exercise as there seem to be sufficient stories to keep my portfolio going. What about the other counters that did not even appear once in this post? I will write about them in the next post.

20172H
Food Empire - Turnaround should continue with positive results.

Valuetronics - Both CE and ICE segments will continue their growth momentum.

Best World - China story is in tact and should continue to power its growth.

SingTel - Launch of Netlink IPO should have a positive impact.

Micromechanics - Continue to benefit from its strategic decision to focus on semiconductor.

ISEC? Improvement in results, partly contributed by the acquisition of JLM clinics in 2016?

2018
Food Empire - Growth rate should be lower as compared to 2017. Expect growth from other markets, especially from the ingredient segment.

Valuetronics - At least for first half of the year with their automotive segment continues to gain traction.

Best World - This year should see more conversion of China export model to direct sales. Margin should improve.

Frasers Centrepoint Trust - DPU boosted by Northpoint AEI in 2017.

Starhill Global REIT - DPU boosted by completion of Plaza Arcade redevelopment by 20181Q. 

Straco? Will it increase its dividend?

Kingsmen Creatives? Will this be the turnaround year?

Raffles Medical Group? Unlikely, but will the new extension start to make a difference?

Duty Free International? Expansion or increase dividend from their cash hoard?

2019
Straco - Either acquisition or increase dividend if it did not do so in 2018.

Capital Mall Trust - DPU boosted from re-opening of Funan in 2018.

Raffles Medical Group? Contribution from Extension and Raffles Chongqing but may face start-up cost pressure from Raffles Shanghai.

Best World? Will it continue to grow?

Frasers Centrepoint Trust? Acquisition of Waterway Point? or in 2020 or 2021?

Starhill Global REIT? Orchard office turnaround?

Kingsmen Creatives? Continue its turnaround?

Frasers Logistic and Industries Trust? More acquisition?

2020/2021
Raffles Medical Group - Reaping the fruit of its expansion.

Straco - Further increase in dividend.

2017 1H Performance

Half a year has passed and it's time to report on portfolio performance again. Happy to report a good half yearly performance with a good second quarter riding on an exceptional first quarter.

Performance

NAV of portfolio grew from $3.78 (30 Dec 2016) to $5.17 (30 Jun 2017), providing a return of 36.6% for 6 months. This is above my stretched target of 12% and also beats my benchmark STI ETF which returned 14.6% inclusive of dividend over the same period. The charts below show the past 6 quarters and past 3 half-yearly performances. The drop in prices of a few counters in the past few weeks have weakened Q2 results but nonetheless a 9.0% return is a good one which I will take for any other year. The exception Q1 performance has also led to the best half yearly performance.

The strong performance is attributed to a combination of positive sentiment in the local market and good results reported from my top ten counters over the past two quarters. A summary of my top ten counters' last quarter performance can be found here.

The top performers continues to be Best World. After stock split and dividend, it has returned 127% this year. This is supported by core stock such as Valuetronics (47%), Food Empire (35%), Micro-Mechanics (32%), Straco (19%), Parkway Life Reit (15%), and Frasers Centrepoint Trust (14%).

ISEC which is not in the top ten also did well with an increase of 10%.

Allocation

While there were some changes in the counter, portfolio allocation has more or less stayed similar to what was planned. Current dividend yield of portfolio based on cost is about 4.7%.

	Planned	Actual
Dividend	~ 60%	58.0%
REIT/ Business Trust	<= 30%	25.8%
Growth	~ 40%	40.1%
Punt	<=10%	9.4%
Cash	0%	1.9%

Earlier in the month, I have also wrote about asset allocation in which I have written that I am going for 30% cash and 70% stock allocation. A check on my spreadsheet shows that it is at this allocation. So no action will be taken to put in or take out cash from the portfolio.

Action

For the month of June, 

I have divested

• A-REIT at $2.65 for a gain of 19%. Bought last December for a tantalising 7% yield for industry leader. With the recent gain, I have received more that 2 years of distribution and yield has dropped below 6%. 
• Techwah at $0.515 for a gain of 10%. Reason for sale is to raise cash for other counters.

I have added

• more Frasers Logistic and Industrial Trust at $1.03 after news of its latest acquisition. I take this as sign of how things will be like in the years to come.
• Japan Food at $0.46 for its consistent dividend. If it can maintain its dividend, it will give me a return of 4.3%. Not fantastic, so hope it will be higher in future.
• Duty Free International at $0.35 for its increase cash hoard and possible expansion in the next few years.
• Valuetronics at $0.77 to round up my holdings. Also, I am satisfied with the 4.7% dividend yield it is giving me.

You can click on April and May for my actions taken in those two months.

Core holdings

Based on initial cost, the top 10 holdings take up 74.9% of the portfolio. With the purchase of Food Empire and Valuetronics, they have moved up in positions. The rest has remains pretty stable.

1. Food Empire (9.7%) @ $0.43
2. Raffles Medical (9.5%) @ $1.48
3. Parkwaylife REIT (8.9%) @ $2.32
4. Valuetronics (8.6%) @ $0.54
5. Straco (8.1%) @ $0.84
6. Best World (7.7%) @ $0.30
7. Fraser Centrepoint Trust (6.4%) @ $2.01
8. SingTel (6.1%) @ $3.82
9. Micro-Mechanics (5.8%) @ $0.91
10. Starhill Global (4.3%) @ $0.67

Looking Ahead

It has been a wonderful ride so far this year. Not sure how long the good time is going to last but enjoying it while it lasts. Looking forward to the release of next round of quarterly results from my holdings and am confident of good results from most of my holdings.

Similar to first half, I do not think there will be much action on my core holdings. However, I might tingle a bit more with my none-core. 

Up next, I will post on a short visibility report of my various holdings for the next few years.

Buy and Sell actions in April

Taken 4 actions in the past month.

1. Sold SPH @ 3.48 due to continued declining business and reduced dividend. Do not turnaround will be any time soon. Loss in trading cost.

2. Sold 800 Super @ 1.26 as intention of original purchase last December was for dividend. The price as jumped up by 36% this year and gain covers 10 years of dividend. So decided to let it go as still a bit uncomfortable with its debt.

3. Added more ISEC @ 0.305 after reading its AR and think that it will do well this year due to its acquisition of JL Medical Group last year. Average purchased price of 0.31.

4. Added more Food Empire @ 0.58 after attending AGM. While business is in a competitive field, I am confident of the management. As what the CEO has commended during AGM, "Food Empire today is different from the Food Empire 5 years ago".

Portfolio November 2016

November is a month of punting. Lots of trading with small purchases based on others' reviews and a short read-up on latest results and last year AR.

The purchases are:

1. Dairy Farm - One of the recommendations by MF Singapore. I don't always buy their recommendations. The other 2 stocks that I have bought due to their recommendation are SGX and RMG. Still holding on to RMG but have divested SGX. Dairy Farm was recommended somewhere in August but I only bought this month as I realized that all 3 analysts have a stake in it and hence I am more convinced of their recommendation. Classifying under punt due to the nature I bought it but probably would go under growth category if their investment in Yonghui and IKEA franchise in HK, Taiwan and Indonesia continue to perform.

2. ISEC - International Specialist Eye Centre. Read about its 3Q results in MF Singapore free site and its jump in earning caught my attention. Further reading tells me that it just IPO in 2014 and earning has not been consistent after listing. Decided to take a small stake as I think it has a potential to grow; it is increasing its dividend; and a high number of employees are holding its shares.

3. Thai Beverage - This was a miss then. I was looking at it when it was going at 20 plus cents and the rest is history when it acquired F&N. I finally took a small stake in it after its price has drifted down from a high of $1.06 to $0.90. Its latest results is good but due to the acquisition and change of financial year, it is confusing to me. In any case, this is another company which has potential for further growth. Will start to follow it more closely in the coming year.

4. 800 Super  - Another stock which I missed the run up. Came into my radar when it is at 40 plus cents but its huge debt put me off. Thanks to a value buddy who posted on the company's development of its Waste to Energy plant and with its completion next year, the debt does not seem as scary as before if the new plant can generate a new stream of revenue and profit for them. Just took a small stake as an impetus to monitor how this development will plan out.

5. LHN - Get to know this business from another fellow investor. Just IPO in 2014 and latest results has improved quite a bit from 2015. Took a small bite and will sell in growth is not sustainable.

Other trades in Novemeber.

6. Added to RMG after reading through the past decade's annual reports and am convinced of its potential growth after the completion of its Hospital extension next year.

7. Added to Food Empire after an improvement of its latest results and purchase by its CEO.

8. Divested Old Chang Kee after making a gain of about 3 years dividend. Will continue to monitor its performance and might re-entered at a good price.

9. Divested FJ Benjamin after continued poor performance for 1Q and its price gained by about 30%.

10. Took a small stake in SingTel for a dividend yield of 4.6%.

Current dividend yield (based on purchase price) is 3.9% after putting in the cash withdrawn earlier this year.

For Income (52.2%)

REIT (27.8%)

Parkway Life REIT

Starhill Global REIT

Fraser Centrepoint Trust
CDL Hospitality REIT

Dividend Stocks (24.3%)

Straco

ST Engineering

Valuetronics

QAF

Micromechanics
SingTel

For Growth, Turnaround and Punting (39.9%)

Growth Stocks (26.8%)

Best World

Raffles Medical
ISO Team

Turnaround (4.6%)

Food Empire

Punt (8.5%)

ISEC

Dairy Farm

Thai Beverage

800 Super

LHN