Tat Hong Holdings

Established History
Tat Hong has history from the 70s, set up in Singapore as a supplier of cranes and heavy equipment.

Market Dominance
Today, it has become the largest crawler crane company in the world, with operations in Malaysia, Thailand, Indonesia, Hong Kong, China, Vietnam, Dubai and Australia.

Growth and Future Plans
Recently, it has set up two Joint Venture companies:

1. Tat Hong has on 28 August 2013 entered into a joint venture agreement with Intraco and Mr Aung Moe Kyaw, and that the parties have incorporated a joint venture company, Tat Hong Intraco Pte Ltd, in Singapore. The company will carry out the business of distribution of cranes and excavators in Myanmar.

2. Announced on 26 October 2013, Tat Hong Holdings, Boustead Singapore and CSC Holdings (three local firms) have set up a joint venture with AME Group (Johor based) to develop land in Iskandar Malaysia. The joint venture will jointly undertake mixed property development in Iskandar Malaysia.

Financial Ratios

Some financial ratios:

P/E ratio: 8.5

P/B ratio: 0.9

Dividend payout since 2006. Past year yield: 4.2%

Valuations seem reasonable now since price drop from 1Q performance disappointment. Factoring in potential growth from Myanmar and Iskandar, I have taken up a position with this company.

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.

Jump in oil prices - encourage biodiesel demand hence increase Crude Palm Oil (CPO) prices?

Due to my holdings in Indoagri, I have been keeping a look out on the Crude Palm Oil (CPO) prices and associated news that may affect it. Oil prices have been showing an increase due to improvement in economy. Coupled with tension in the Middle East, this triggered fears of supply crunch in oil. As an oil alternative for fuel, this may mean good news for CPO producers since this may encourage biodiesel demand.  

On the flip side, I have holdings in Food Empire as well, which is a direct user of CPO. However, I have read that coffee and sugar prices continued to be depressed, so I will monitor this for now.

=============================

Excerpt of article from Reuters on Friday 5 July 2013

UPDATE 9-Oil jumps $2 on Egypt, US data, biggest weekly gain in a year

NEW YORK, July 5 (Reuters) - Oil prices jumped nearly $2 a barrel on Friday to notch their biggest weekly gain in a year, boosted by concerns over rising tensions in Egypt and better-than-expected U.S. economic data.

Prompt U.S. oil prices initially lagged gains but rallied later in the day, extending this week's abrupt gains in spreads on speculation that U.S. Midwest oil supplies are poised to tighten. The September versus October U.S. West Texas Intermediate spread <CLU3-V3> rose 26 cents to close at a contract high of $1.31 a barrel.

......

U.S. crude oil prices extended their string of 14-month highs. Front-month U.S. crude oil futures settled $1.98 per barrel higher, or 1.96 percent, at $103.22, after touching a high of $103.32. Trading volume was thin due to the Independence Day holiday on July 4.

U.S. oil gained 6.7 percent for the week, the largest weekly percentage gain since October 2011.

Brent crude oil for August delivery traded at a three-month high and ended $2.18 per barrel higher, or up 2.07 percent, at $107.72 after hitting a high of $107.88.

Brent gained more than 5 percent on the week and showed its highest weekly percentage rise since last June.

Oil prices vacillated earlier in the day after data showed that U.S. employers added 195,000 new jobs to their payrolls last month, more than expected.

......

But for oil markets, the potential upside from increased economic activity outweighed risks from the rising dollar and possible policy tightening, said Matt Smith, commodity analyst at Schneider Electric in Louisville, Kentucky.

SUPPLY TIGHTENS, MIDEAST TENSIONS WEIGH

Crude oil extended gains late afternoon after the leader of Egypt's Muslim Brotherhood, Mohamed Badie, told a protest rally that ousted president Mohamed Mursi must be reinstated following his removal by the army - "otherwise its our lives".

......

Other factors are also tightening European oil supplies. Maintenance on the North Sea Forties crude oil field in August will reduce the amount of benchmark oil that underpins the Brent contract.

Libya's largest export terminal was shut late on Thursday. Port guards locked the gate over salary complaints, preventing workers from continuing operations.

The closely watched spread between global benchmark Brent crude oil and U.S. West Texas Intermediate had widened to $5.17 per barrel and settled at $4.50.

......

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

Partial divestment in Second Chance - Hello Indoagri!

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.

Bought more Saizen REIT today after its 3Q2013 results release

Saizen REIT must be the one of the least favored REITS listed on SGX. And it is hard to blame anyone for not favoring this REIT, given its rather turbulent history:-

• Listed in Nov 2007 @ IPO price of $1 (discount to its NAV of $1.05)
• Seems like the REIT has trouble servicing its loans (which are all commercial mortgage backed securities (CMBS) loans (read What is a CMBS loan and More on CMBS financing), and the market for such loans have more or less died during financial crisis in 2008) + Japan recession = no income distribution to unit holders in 2009-2010. And Saizen is allowed to do that, reason being it is not mandated by Singapore law to pay out dividends as all of its properties are in Japan.
• To add salt to this, there was the March 2011 massive earthquake. It has 22 of its 146 properties in Sendai, the hardest hit area.
• Things for this REIT started to take a turn in end 2012, after it made a series of attempts to repay its loan and made some good property buys.
• Current price is at $0.20 vs its NAV of $0.2716. 
• Yield is about 5.1 % based on current price. Income distribution for this REIT resumed in 2H2010. It has been in an increasing trend since, as shown below:-

There were some sell down activities these few days following its 3Q2013 results. Seems like there was a 70.5% decline in quarterly net income from operations - which was largely due to one off expenses as a result of early termination of loans and refinancing activities. Furthermore, due to recent depreciation in yen, there is worry that DPU will be affected.

Well, for me, I think that based on past performance, Saizen has taken positive steps to get itself out of the woods. And this shows a lot for the tenacity of the management. The fact that income distribution has resumed in 2010 and shows an increasing trend over the years gives me confidence that the REIT is in good hands.

Even though there was a decline in quarterly income for 3Q2013, this is due to a one off payment for refinancing of loans. The more favorable refinanced loan terms at lower interests means that benefits will be felt in later quarters. Furthermore, the REIT is now given more time to repay its loan, and in the meantime, is able to secure more loans to fund its future acquisitions.

As for the depreciation in yen affecting DPU, this is something that probably comes off as a tradeoff to  reviving the Japanese economy. From my impressions, the current Japan PM and his cabinet are taking big steps to shake Japan out of its decades of recession slumber. With a better economy comes a more vibrant real estate market in Japan, as more people work or invest in Japan, resulting in increase in demand for houses, and hopefully that means prices of Saizen assets appreciate in time. I'm sure this formed some of the considerations by investors when they participated in the recent Croesus Retail IPO.

Therefore, it was based on the above analysis that, instead of selling off my Saizen REIT when prices went down to S$0.189 on bad news, I loaded more on Saizen REIT today.

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

• Analyst report on Saizen REIT

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.

Lum Chang won the case on April 24, 2013...

While doing research on Lum Chang, I came across the following piece of information on Singapore Law Watch listed 24 April 2013. Apparently, Lum Chang was involved in a law suit. Based on my understanding, Lum Chang (1st Defendant) won the case.

Case details and judgement here:- Singapore Law Watch

Excerpt from the judgement -

Ryobi-Kiso (S) Pte Ltd v Lum Chang Building Contractors Pte Ltd and another
[2013] SGHC 86

The case before me concerned an application by way of originating summons for an injunction against a call on a performance bond under a construction contract. After the hearing on 1 October 2012, I dismissed the application with the usual consequential costs orders. As the plaintiff applicant has appealed against my decision, I set out the grounds for my decision.

......

Having regard to the overall tenor and context of the entire conduct of the parties, I am unable to conclude that the 1 st Defendant’s conduct was “so lacking in bona fides” (see BS Mount Sophia at  [45]). I therefore dismissed the Plaintiff’s application with costs.

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.

Book review - The Intelligent Investor by Benjamin Graham (Part I)

I started my stock investing journey on April 2011, and one of the first books I read on the topic is "The Intelligent Investor" by Benjamin Graham. At that time, I felt the need to learn from the best and Warren Buffett being an obvious choice, I read up on his investing philosophy (value investing) and got to know about Benjamin Graham.

After two years into my investing journey, I decided to re-read the book. And I find that I have a greater appreciation of the book after having real life, hands on experience in studying companies, choosing stocks, and buying/selling. Nothing beats trading with your hard earned $.

"The Intelligent Investor" is a classic investment book and I am sure that many people will agree with me that it is a must read for people who are intending to or who are already into stocks as an investment medium.

I have re-read about a quarter of the book and so far I have highlighted the following five points for sharing:-


1. To invest successfully over a lifetime does not require a high IQ, unusual business insights or inside information - what is needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework. By developing your discipline and courage, you can refuse to let other people's mood swings govern your financial destiny. It means being patient, disciplined and eager to learn, you must also be able to harness your emotions and think for yourself.

- Agree. Emotions are a no-no in investment. You must develop your own investment philosophy which is unique and tailored according to your risk appetite, your commitments and your temperament.


2. A stock is not just a ticker symbol - it is an ownership interest in an actual business, with an underlying value that does not depend on its share price. The market swings between unsustainable optimism (making stocks too expensive) and unjustified pessimism (making stocks too cheap). An intelligent investor is one who sells to optimists and buys from pessimists.  

- Agree. Always look for value or bargains in businesses, while considering the broad economic climate, before buying a stock. You must be happy to be part of the business, and do not mind holding on to it (in case market trends downwards).


3. Future value of every investment is a function of its present price - higher the price, lower the returns. Benjamin Graham emphasizes on Margin of Safety - never overpaying, no matter how exciting an investment seems to be. This is because the chance of being wrong is always there (never know how Mr. Market behaves the next minute). 

- Somewhat agree. It's a cross between buying at a bargain and riding the wave. I do agree on the margin of safety - it is important to avoid overpaying for a stock, as I know from my early stock buys in 2011 (such as ECS, Keppel Land, NOL...). Always know what you are buying.


4. The intelligent investor realizes that stocks become more risky as their prices rise, and less risky as their prices fall. He dreads a bulls market which makes stocks more costly to buy, and welcomes a bear market since it puts stocks back on sale. Even though investors know they are supposed to buy low and sell high, in practice they often end up getting it backwards.

- Agree. The best moment to buy is when market starts to turn around. Prices of stocks look high now.


5. The art of successful investment lies first in the choice of those industries that are most likely to grow in the future and then in identifying the most promising companies in these industries. The search for a stock to buy is not worth the investor's efforts unless he could hope to add 5% before tax to the average annual return from the stock portion of his portfolio. It is important to measure your investing success by how much you keep after inflation and not just by what you make.  

- In theory yes, but difficult to put into practice. I need to work on the 5% increase to portfolio stocks, and not spend too much time on those 1-2% ones.

You can read the reviews from others and/or get the book from Amazon here:-
The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition)

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.

Lum Chang coverage in The Edge on 29 April 2013

Excerpts from coverage in The Edge on 29 April 2013:-
(source: The Edge Singapore)

Family-controlled Lum Chang Holdings does not attract much attention in the market. Yet, the decades-old contractor is an interesting play on Singapore’s property and infrastructure boom. And, its dividend of two cents per share provides investors with a steady dividend yield of about 6%. Its market value of just $123.8 million is currently a 28% discount to its book value of $173.2 million. The company also has a liquid balance sheet, with a net cash position of $33 million as at end-2012.

Much like other contractors, Lum Chang has taken stakes in property development projects. For instance, it has a 30% stake in Twin Fountains, an executive condominium (EC) development in Woodlands. The remaining stake is held by Frasers Centrepoint. The project was sold out swiftly earlier this month. The company also has a 20% stake in another joint venture with Frasers Centrepoint to develop Esparina Residences, an EC located in Sengkang that is due to receive its temporary occupation permit (TOP) at end-2013.

..... Lum Chang’s construction order book stood at about $600 million as at Dec 31. Its ongoing property development-related construction work comprises six projects. Two of these projects are for Ascendas: Nucleos in Biopolis Road and a business park development in Science Park Drive. Lum Chang is also building The Metropolis for Ho Bee Investment at Biopolis, Ripple Bay Condominium forMCL Land in Pasir Ris, and Esparina Residences.

...

Lum Chang also has a foothold in Malaysia, where it develops property.


... In February, it said it had bought property located at 42-60 Kensington High Street, London for £40.19 million ($76.8 million). “Our income will be mainly from the ground floor, achieving rental income from shops such as Zara, Topshop and Miss Sixty. The leases there are very long, 10-year leases and these will provide a good steady income,” Fong says.

The yield of the London property works out to 4.5%, giving an annual income of $3.4 million, according to a report by UOB Kay Hian. That is about 15% of the company’s earnings for FY2012. 

Lum Chang has paid a dividend of two cents per share for the last three financial years ...

Lum Chang does not have much of a following among analysts, though. However, UOB Kay Hian notes that the stock appears to be inexpensive. “Trading at 0.8 times price to book looks reasonable when compared with peers’ average of one time,” the brokerage states in a report. “Since FY2010, Lum Chang has maintained a net cash position. Its stock price is underpinned by cash reserves of $77 million as at Dec 31, which accounts for 62% of its market cap.”

Amid the hunt for yield, Lum Chang seems a good alternative to real estate investment trusts and consumer-oriented stocks that have run up sharply over the last couple of years.

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

• Lum Chang - Analyst Coverage in April 2013
• Lum Chang - A hidden gem?

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.

Lum Chang - Analyst Coverage

After I blogged about Lum Chang a few days ago, there is analyst coverage of the same by UOB KH. Great minds think alike??

Here is an excerpt from their analyst report:-

Lum Chang Holdings (LCH) is trading at 4.9x FY12 PE and 0.8x P/B.

Potential share price catalysts include new contract wins and an attractive forecast dividend yield of 6% in FY13. 

Investment Highlights
Good track record.  
As a  BCA grade ranked A1 contractor,  Lum Chang Holdings has an impressive portfolio of past projects, which included Changi Water Reclamation Plant, UOB Plaza I and National University of Singapore. LCH’s established record in civil engineering projects is also evident, being the only local contractor to clinch a MRT Downtown Line project (contract 912 worth over S$450m) on its own. LCH’s recognised construction quality and established track record make it a serious contender for upcoming public construction projects, such as the MRT Thomson Line.

Consistently attractive dividend yield.  
LCH has been paying a consistent dividend of 2 cents for the past three years, which translates to an attractive dividend yield of 6.0%. The dividend of 2 cents equates to a payout of 35.6% in FY12. In FY12, LCH generated a free cash flow (FCF)/share of 2.4 cents and a FCF yield of 7.3%.

Steady rental income.
LCH’s recent acquisition of a  freehold mixed-use property at 42-60 Kensington High Street in London  provides a steady recurring income for the group. Kensington High Street is identified in the London Plan as one of the 35 major centres in London. The prime location of the property allows it to enjoy a 100% occupancy rate and an annual rental income of £1.8m (S$3.4m), that translates to a rental yield of 4.5%. The S$3.4m rental income is about 15% of its FY12 net profit.

Strong balance sheet.
Trading at  0.8x P/B, valuation looks reasonable when compared with peers’ average of 1x P/B. Since FY10, LCH has maintained a net cash position. Its stock price is underpinned by cash reserves of S$77m (as at 31 Dec 12) that represents 62% of its market cap.

Future plans.  
With a  strong construction orderbook of S$600m  and its new executive condominium project at Woodlands (a JV with Fraser Centrepoint) to be launched in Apr 13, LCH’s construction arm is likely to be kept busy till 2016. For its property development business, LCH is looking forward to continue developing its two residential projects in Malaysia where only 50% has been launched todate. LCH is also on the lookout for promising property investment in Asia and London to create additional steady recurring income. Associate LC Development’s hotel operation in London is likely to help LCH in optimising its selection of property investment in the London market.


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

• Lum Chang coverage in The Edge Singapore on 29 April 2013
• Lum Chang - A Hidden Gem?

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.

Lum Chang - a hidden gem?

Vested with a few lots of Lum Chang today.... after discovering it yesterday night.

Lum Chang's construction portfolio dates back to the 70s, and include buildings like National Library, Circle Line Stage 1, AMK Hub, Causeway Point, Paragon, Audi Terminal etc etc. It has branched into property development and investment, and holds buildings in Singapore and Malaysia for rents.

Tried to do some research on the stock, but apparently it is like a submarine stock.. hardly any news may be found for it. Which is a good thing for me, cos this means that I get to buy it at a good price without all the hype!

Here are the things I found...

1. At its last closing price of $0.34, it is trading at about 22% discount to its NAV of $0.4368.

2. It has been consistently giving dividends for the past years (my records date back to 2006).

3. Yield for last 3 years about 6% (based on $0.34).

4. Compared to its peers, Swee Hong (PB ratio 1.87 and PE ratio 18.7) and Yongnam (PB ratio 1.15 and PE ratio 8.7), its ratios of PB ratio 0.78 and PE ratio 6.0 seem much more attractive.

Hence the reason I bought today.


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

• Lum Chang - Analyst coverage April 2013
• Lum Chang coverage in The Edge Singapore on 29 April 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.

Book Review: How to Make Money in Stocks by William J. O'Neil

William O'Neil's philosophy revolves around the following

C Current Quarterly Earnings per Share: The Higher, the Better 

A Annual Earnings Increases: Look for Significant Growth 

N New Products, New Management, New Highs: Buying at the Right Time 

S Supply and Demand: Shares Outstanding Plus Big Volume Demand 

L Leader or Laggard: Which Is Your Stock? 

I Institutional Sponsorship: Follow the Leaders 

M Market Direction: How to Determine It

The goal of the strategy is to discover leading stocks before they make major price advances. The system matches fundamental and technical analysis, and identifies companies with strong fundamentals, . It encourages buying their stock when they emerge from price consolidation periods and before they advance dramatically in price.

What To Do:-
1) You should buy stocks when they’re on the way up in price, not on the way down. And when you buy more, you do it only after the stock has risen from your purchase price, not after it has fallen below it.
(I agree. Even though a stock may look cheap, the fall may not have ended. Don't catch a falling knife!)

2) You buy stocks when they’re nearer to their highs for the year, not when they’ve sunk so low that they look cheap. You buy higher-priced stocks rather than the lowest-priced stocks.
(This bit would be the technical analysis portion, where volume and price action comes into play.)

3) You pay far less attention to a company’s book value, dividends, or PE ratio—which for the last 100 years have had little predictive value in spotting America’s most successful companies—and focus instead on more important proven factors such as profit growth, price and volume action, and whether the company is the number one profit leader in its field with a superior product.
(Same as Point 2) above. It's relevant if you are trading based on price and volume action.)

4) You learn to always sell stocks quickly when you have a small loss rather than waiting and hoping they’ll come back.
(True for all cases. Ok, maybe not for the hard core value investor. Learn the 8% cut loss rule, especially when you are on CFD.)

5) You also have to acquaint yourself with charts—an invaluable tool most professionals wouldn’t do without but amateurs tend to dismiss as complicated or irrelevant.

(This (TA) I've got to learn. It seems so so hard.)


6) Today it’s not enough for you to just work and earn a salary. To do the things you want to do, go the places you want to go, and have the things you want to have in your life, you absolutely must save and invest intelligently.
(I agree. Start early!)

7) It is the unique combination of your finding stocks with big increases in sales, earnings and return on equity plus strong chart patterns revealing institutional buying that together will materially improve your stock selection and timing.
(Very true.)

8) A stock’s chart must always be checked to determine whether the stock is in a proper position to buy, or whether it is the stock of a sound, leading company but is too far extended in price above a solid basing area and thus should temporarily be avoided.

What NOT To Do:
1) You don’t subscribe to a bunch of market newsletters or advisory services, and you don’t let yourself be influenced by recommendations from analysts, who, after all, are just expressing personal opinions that can frequently be wrong.
(I agree. Always do your known research. Analysts may have their own hidden agenda!)

This book has 4 stars based on 228 reviews on Amazon.

You can read the reviews from others and/or get the book from Amazon here:-

How to Make Money in Stocks by William J. O'Neil

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.

Book Review: Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School by Andrew Hallam

I read the book Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School by Andrew Hallam a couple of months ago.

It was a rather interesting read, sentiments shared by 92 other customers on the Amazon website, with an average rating of 4.5 stars.

You can build financial security by using the nine rules outlined in this book: 

1. Spend like a millionaire (or less) if you want to become rich. 

(I agree. Many books/websites on financial management advocate spending within your means, or delayed gratification i.e. to use the money on income generation, instead of shopping or buying a flashy new car for example.) 

2. Start investing as early as possible—after paying off credit card debt and any other high-interest loans. 

(I agree. Rules of compounding work miracles. The earlier you start, the better it is, cos it allows more time for $ to grow.) 

3. Invest in low-cost index funds instead of actively managed funds. Nobody can consistently pick “winning” actively managed funds ahead of time. 

(Hmm, this one I am not sure as I do not have experience in buying funds. However, if you are a 'lazy, busy or risk adverse' investor, you should look at exchange traded funds instead of doing your own stock picking, since studies have shown that exchange traded funds grow despite downturns or market fluctuations, given a sufficient timeframe of 5-10 years.)

4. Understand stock market history and psychology so you don’t fall victim to the craziness that infects every investing generation (often more than once). 

(I agree. Read as widely and as much as you can. Do research into the companies that you are investing in - know what you are buying and not jump into the next (over)hyped stock.)

5. Learn to build a complete, balanced portfolio with stock and bond index funds that will easily beat most of the pros. 

(I agree. It is important to know your investment philosophy and your appetite for risk. I have a mix of insurance, REITs and growth stocks, and depending on the market conditions, I balance my portfolio accordingly. I am interested to know more about bonds and gold/silver investment. Still learning though.) 

6. Create indexed accounts no matter where you live. 

(I am not too sure what this means. Need to find out more.)

7. Learn to fight an adviser’s sales rhetoric. 

(I agree. You need to be responsible for your $ and do your own thorough research, instead of relying on another person's advice.)

8. Avoid investment schemes and scams that tickle your greed button. 

(Same as Point 7 above. If something looks too good to be true, it probably is.)

9. If you must buy common stocks, do it with a small percentage of your portfolio and pick a mentor such as Warren Buffett.

(I think that value investing knowledge armed with some technical analysis works best. Value investing to know if the company is doing well, and technical analysis to know the best entry points.)

You can read the reviews from others and/or get the book from Amazon here:-
Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School

Kindle version is also available: Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School

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.

Book Review: Come Into My Trading Room: A Complete Guide to Trading by Alexander Elder

I have been reading constantly in order to improve on my trading/investing knowledge since my first trade about 2 years ago.

Recently, I came across my notes on the book Come Into My Trading Room: A Complete Guide to Trading by Alexander Elder.

This book is more for the day/intra-day trader, who looks at market signals/TA, timings of entries/exits etc. Not so much for the value investor.

Here are some excerpts from the book which I highlighted:-

1) To succeed in trading you need several innate traits without which you shouldn’t even start. They include discipline, risk tolerance, and facility with numbers.

2) A good signal jumps at you from the chart and grabs you by the face—you can’t miss it! It pays to wait for such signals instead of forcing trades when the market offers you none. Amateurs look for challenges; professionals look for easy trades. Losers get high from the action; the pros look for the best odds.

3) Bullish fundamentals must be confirmed by rising technical indicators; otherwise they are suspect. Bearish fundamentals must be confirmed by falling technical indicators. When fundamentals and technicals are in gear, a savvy trader can have a field day.

4) Win or lose, you have to gain knowledge from a trade in order to be a better trader tomorrow. Scan your fundamental information, read technical signals, implement your rules of money management and risk control.

5) A professional waits for familiar patterns to emerge from the market. Technical analysis tools will work for you only if you have the discipline to wait for patterns to emerge. Professionals trade only when markets offer them special advantages.

6) Most company news is released on a regular schedule. If you trade a certain stock, you should know well in advance when that company releases its earnings and be prepared for any market reaction to the news. Lighten up on your position if unsure about the impact of a coming announcement.

7) Rallies top out after enough wealthy bulls take their profits, while the money from new bulls is not enough to replace what was taken out.

8) Three essential pieces of information—the direction of price movement, its extent, and volume. Price represents the consensus of value among market participants. Volume reflects their level of commitment, financial as well as emotional. Price reflects what people think, and volume what they feel.

One important thing to note: this book has a 4.5 star rating based on 136 customers review on the Amazon website. This means that quite a number of people have read the book and found it to be useful.

You can read the reviews from others and/or get the book from Amazon here:-
Come Into My Trading Room: A Complete Guide to Trading


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.

KSH Holdings - my reasons for buying this stock

KSH Holdings first caught my attention after I read that it had obtained a Letter of Acceptance (LOA) for Qbay. Its order book now stands at more than $460 million, so there is visibility on its performance for the next 1-2 years. It has also been constantly paying dividends over the years to shareholders, with yield of 3.4% at closing price of S$0.44. PE ratio is relatively low at 8.5, which means that the stock is not overpriced. I also noted that its earnings over the years have been pretty consistent.

Initially, I was a little skeptical of construction stocks, as I feared that construction activities in Singapore is getting rather saturated due to boom in construction activities in recent years, and I had the impression that population growth in Singapore was going to be carefully controlled/curbed due to public sentiments post-General Elections. However, that changed after the White Paper came out, which projected that Singapore would have a population of 6.9 million in 2030. My feelings on this aside, I saw this information as an indicator that construction in Singapore is going to flourish for some years.

My entry price was S$0.38, which was still below its NAV of S$0.39. It's last closing price is S$0.44, which means a gain of 15% in less than a month.

There's a buy call from OCBC, revising its TP from S$0.50 to S$0.62.

Excerpt here (from http://sgx.i3investor.com/servlets/ptres/3848.jsp):

KSH Holdings: Another quarter of strong growth

KSH reported 3Q FY13 PATMI of S$8.1m, which surged 179% YoY mostly due to contributions from its property development segment as the group recognized earnings from The Boutiq, Cityscape@Farrer Park and Rezi 26. 9M FY13 earnings now cumulate to S$22.3m, up 108.3% YoY and forming 73% of our FY13 forecast. The group has sold a significant portion of launched projects, and we expect progress billings from already sold projects to underpin earnings growth ahead. Maintain BUYwith an increased fair value estimate of S$0.62, versus S$0.50 previously, as we lower the RNAV discount for its property segment from 50% to 40% to reflect a lower risk profile given a larger percentage of projects sold, and raise our PE multiple for its construction segment from 3.0x to 4.0x - a level closer in line with that of its peers. (Eli Lee)

The full report can be obtained from here: http://kshholdings.listedcompany.com/misc/KSH-130208-OIR.pdf

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.

Tool - SharesInv

To be able to know what stocks to buy, it is important to carry out research on the companies on your own. By this, I do not mean reading analyst reports or gather views from internet from others. This is because one cannot be sure if these analysts or others have "hidden agendas", in that they may be vested in these stocks, and are therefore inclined to persuade others to take up these stocks as well in order to drive up prices.

Of course, by the above statement, I do not mean that all analyst reports or views of others have hidden agendas. Nor do I mean that you should not read any analyst reports or not consider another's views. I just think that it is dangerous to rely only on these information sources and base only on them for your decision to buy or sell.

Thankfully, with technology, information is readily available on the internet. Some may be obtained freely, for example, on the company's own website. However, I think that it is worthwhile to pay a subscription fee, especially if you are actively trading, to subscribe to a portal that is able to provide the information to you of all the listed companies, available to you when you require it (instead of going through the hassle of searching for it, or tabulating the data).

One such portal I have used is Share Investment (www.shareinv.com). Its online subscription fee per month is SGD$7, and a yearly subscription costs $70. Information such as articles, charts, share price performance, financial ratios such as Price Earning ratio (PE ratio), Earnings per Share (EPS), Price to Book ratio (PB ratio), Yield, net asset value (NAV), dividend payout history, company announcements, quarterly performance, analysts reports are provided. There is also the possibility to customise your own watchlist, or to do stock screening, for example, to select companies based on lowest PE or PB ratios, or highest yields.

Of course, there are other possibly better portals out there, for example, those that provide you with ticker tapes, or which is able to give indication of whether the big boys are buying (through buying/selling lot sizes). However, I think that these information are not really necessary if you are not doing day trading. Furthermore, subscriptions for these portals are much more expensive.

Therefore, at present, I am quite happy with the above-mentioned portal. Their app ShareInv is available for download through the ITunes store.
Link here: Shares Investment - Pioneers & Leaders (Publishers)

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.