Gold and more gold - its inverse relationship with the stock market

From what I understand, gold is a safe haven to all the money printing by the government, and hedge against inflation.

Read this rather interesting article about gold prices in recent weeks. Good news is, gold prices are coming down!

http://www.scmp.com/business/commodities/article/1136020/quantitative-easing-does-little-boost-gold-prices

Excerpt from the article

"Although gold has had a great run in the past decade, much of it has come in response to the uncertain times unleashed by the global financial crisis, and the liquidity injections and rate cuts in the central bank actions that followed.

The fact that gold did not react positively to QE3 reflects the view that the US economy is recovering. As it picks up, the likelihood of another round of quantitative easing decreases. Already in the minutes of the US Fed meeting held in December last year, discussion has begun about winding down QE3."

Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.

China Minzhong - Finally rid of it

Finally sold my China Minzhong today, after holding on to it for almost 8 months.

Yes, I am one of the unlucky few who bought the shares before the big fall in May 2011. And yes, I was (maybe) one of the few who held onto the shares and not cut loss when I should have. Well, that was because I was overseas during that period of time. I only remembered checking it one day (after a couple of days not being able to login), and saw that it had plummeted to a penny stock (about $0.60) from its normal price of S$1+. Right now, I am still not sure what had happened.

The stock had rallied the past few weeks, and I was hoping that it will go back to about $1. However, given the red signals of the market this week, I decided to get rid of this stock once and for all. On hindsight, I should have averaged down when the stock was $0.60. However, according to the books I have read, this is a big no-no. Who knows if the price will keep getting lower and lower... like Cosco?

On paper, the stock looks great... the company is profitable, low PE and PB ratio, reports saying that there is worldwide food shortage, Temasek backed...it looked like a safe buy for me. Unfortunately, that was not the case. I have since vowed not to buy any more S-chips. Too risky!


Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.

Food Empire Holdings Limited

Food related stock counters have been the new darlings of the Singapore Stock Exchange due to the F&N saga. Food Empire is one of the food related stock counters that have been in the news limelight in recent months.

It is currently trading at S$0.60, with PE ratio at 17.5 and NAV of S$0.364.

The reasons I find this counter attractive is different from those of Global Premium Hotels, which I believe is trading at an attractive price and a substantial discount to its NAV.

Food Empire is a food and beverage company, which manufactures and sells instant beverage products (e.g. instant coffee beverages), frozen convenience food (e.g. tail-on shrimp dumplings, butterfly seafood wantons), and snack food (e.g. potato crisps). Its main markets are in Russia, followed by Eastern Europe and Central Asia. 

12 December 2012: OSK-DMG says Food Empire is the cheapest Singapore-listed 3-in-1 beverage player at 14X P/E vs Super (S10.SG) at 21X and Viz Branz (L5J.SG) at 15X. 

More importantly, Food Empire is setting its eyes on the Chinese and India market which, historically, have always been tea drinkers. However, in recent years, there has been an increase in coffee drinkers in these big markets. So much so that Starbucks has also jumped on the bandwagon and set up operations in these countries.   

Starbucks established cafes in the region have maintained double-digit sales growth over the past couple of months (report in Wall Street Journal on 6 December 2012)

Starbucks opened its first cafe in India in October 2012 (report in Wall Street Journal in October 2012)

Food Empire has incorporated subsidiaries in China and India to bring its products into China and to manufacture instant coffee in India.

I am really excited by these news, and believe that there is tremendous growth opportunities for this company. And, of course I am vested :)

If you are reading this, you may be interested in:-

• Food Empire Holdings post 11.3% rise in net profit in Q1 FY 2013

Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.

Global Premium Hotels

Global Premium Hotels IPOed on 26th April 2012, which is a "spin-off" by its parent the Fragrance Group.

I am vested in this counter having bought some at its low point of 0.24. I hold a long term positive outlook on the shares.

Some of the reasons which I deem it an attractive buy:-
1. Current price at S$0.26 (which is also its IPO price) trading at about 20% discount to its NAV of S$0.3112.
2. Price-Earning ratio is low at 11.3.
3. Distribution of at least 80 % of net profit after tax for FY2012, estimated to be about 6% yield.

Furthermore, it has received good reviews and buy calls from various brokerages and media.

2 July 2012: 
Koh brothers increase stakes in Aspial Corp, Global Premium Hotels http://www.theedgesingapore.com/component/content/38325.html?task=view

5 December 2012: 
This is where Global Premium Hotels juices its lucky charm 
http://sbr.com.sg/hotels-tourism/more-news/where-global-premium-hotels-juices-its-lucky-charm

Buy call by OCBC
http://www.remisiers.org/cms_images/research/Dec03-Dec07_2012/GPH-121205-OIR.pdf

14 December 2012: 
http://www.theedgemalaysia.com/property/226653-global-premium-hotels-upgrades-hotels-and-opens-new-ones-away-from-geylang.html

20 December 2012:
Non-Executive Chairman Koh Wee Meng is once again accumulating Global Premium Hotels shares.
http://www.nextinsight.net/index.php/story-archive-mainmenu-60/916-2012/6236-armarda-global-premium-hotels-ezion-latest-happenings




Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.