Picked up some Sabana REIT today in the sea of red

The eve before Vesak Day was not peaceful at all. Well, I was expecting some kind of flat or slight negative market as it so often happens before a long weekend. However, today was kind of "bloody" in the sense that there was a sea of red in the stock market...

I was mindful of a possible correction due to the "up up and away" stock market the past few weeks. Therefore, I had taken profit on a few occasions, like selling off my Global Premium Hotel and Marco Polo after their results release recently. Therefore, I had a small war chest ready for deployment when needed.

I bought some lots of Sabana REIT today when it dipped >5% from yesterday's closing price. The price was hovering at about 1.25 - 1.285. Yield at this price range was > 7%, which still rank one of the highest amongst the REITS and a decent number at that.

I feel that Sabana's performance has been good the past few quarters. Even though there is an overhanging cloud regarding some of the master leases expiring this year, talks are underway to renew these leases. Should that happen, the stock price is very likely to increase further from the 20+ % it has increased the past year.

With this potential upside, the above yield % and REITs being a defensive stock in mind, I took the chance to get a few more lots today. I also took profit on Lum Chang, thereby filling up my war chest again ready for another deployment if so required.

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.

Analyst Report on Food Empire - 21 May 2013

Share price of Food Empire increased from S$0.685 to S$0.725 today, a rise of almost 6 % in a day. Volume is high too, at about 10 x higher volume than average. Naturally, I was happy since I feel that the stock has good prospects and I am vested.

I tried to search online to see if there are any news, and came across an analyst coverage in the NextInsight that came out today. Coincidentally, I wrote about Food Empire a few days ago.

Link here: The NextInsight

Excerpt of the report below:

OSK-DMG maintains 'BUY" with 84 cents target for Food Empire.

Food Empire reported an 11% growth in 1Q13 earnings of USD5.6m. Results are in-line with expectations, accounting for 25% of our full year estimates. 

Sales in Russia grew at a stronger pace of 18% y-o-y vs our forecast of 15% due to a change in business model.

...

Sales for the quarter were also boosted by a raising of average selling prices (ASPs) for products last year. We also note an expansion in gross margins by 5ppt for the quarter. 

We maintain our estimates and BUY call with TP of SGD0.84, pegged to 16x FY13F P/E. 

Food Empire trades at a sharply lower valuation than Super Group (PE ratio of 13.9 for Food Empire vs 32 for Super Group).


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

• Food Empire posts 11.3% rise in net profit to $7mil in Q1-FY2013

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 - 11.3% rise in net profit to $7mil in Q1-FY2013

Having bought and sold Food Empire a few times since October 2012 when it was still S$0.45, to take profit (amidst uncertainty in the global economy), I have again taken a position on Food Empire in April this year. After its XD date, it was trading at about 0.655-0.67 range. As of last Friday 17 May 2013, it was trading at S$0.685.

Since my last post in January 2013, prices of commodities such as sugar, crude palm oil (where it is used to make non-dairy creamer of 3-in-1 beverages) and coffee, are in a downward trend or are depressed. Being a direct user of these commodities to make the 3-in-1 beverages, this surely means good news for Food Empire since raw material costs are lower.

Sugar Prices (source: http://www.indexmundi.com/)

Crude palm oil prices (Source: palmoilhq.com)

Coffee prices (source: nasdaq.com)

Furthermore, group revenue grew by 13.5% from last year due to strong revenue growth in Russia, Eastern Europe and Central Asia (Russia and Eastern Europe being their largest market).

This is definitely one stock that I will continue to keep in my portfolio.

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

• Food Empire Holdings Ltd
• Analyst report on Food Empire on 21 May 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.