I came across the following quote today and kind of resonated with it in light of the recent REITs sell-down.
Warren Buffett says: For some reason, people take their cues from price action rather than from values. Price is what you pay. Value is what you get.
S-REITs share prices have taken a beating in the past two weeks in light of Fed talks about easing up on QE. Even though this may imply increase in interest rates, thereby somewhat affecting DPUs of S-REITs due to their borrowings, I feel that the sharp drop in price is overdone, and may be due to shortists affecting the market. The sharp drop in price may also be partly due to the rally S-REITs have sustained in the past year.
If you have decided at some point in time to load up on S-REITs because of their dividend paying policy and yield %, then, the drop in price should be deemed as a good time to accumulate more, rather than to sell them away. Afterall, the drop in price should not change the value of the company and the reasons for buying it, does it?
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.
Saturday, 15 June 2013
Thursday, 23 May 2013
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.
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.
Wednesday, 22 May 2013
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:-
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.
Sunday, 19 May 2013
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.
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:-
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.
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.
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| Sugar Prices (source: http://www.indexmundi.com/) |
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| Crude palm oil prices (Source: palmoilhq.com) |
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| 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:-
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.
My holdings - as of 19 May 2013
Here's a snap shot of my current portfolio. My portfolio is rather REIT heavy, with almost 50% of my holdings in REITs.
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.
| No. | Name | Purchase Date | Purchase Px | Current Px | Gain/Loss |
| 1 | MCT | Apr 27, 2011 | 0.890 | 1.465 | 64.61% |
| 2 | Biosensors | Mar 16, 2012 | 1.450 | 1.215 | -16.21% |
| 3 | Sabana REIT | Jul 26, 2012 | 1.000 | 1.355 | 35.50% |
| 4 | 2nd Chance | Nov 22, 2012 | 0.417 | 0.435 | 4.27% |
| 5 | MGCCT | Mar 7, 2013 | 0.93 | 1.13 | 21.51% |
| 6 | Lum Chang | Tue, Mar 26, 13 | 0.34 | 0.350 | 2.94% |
| 7 | Food Empire | Tue, Apr 9, 13 | 0.68 | 0.685 | 0.74% |
| 8 | Saizen | Tue, Apr 23, 13 | 0.198 | 0.190 | -4.15% |
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 Saizen REIT
While doing research on Saizen REIT, I came across the following company research report by nra capital which was published on 15 May 2013 (post 3Q 2013 results release).
The link to the report is here:- NRA Capital
In summary,
If you are reading this, you may also be interested in:-
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.
The link to the report is here:- NRA Capital
In summary,
- NAV of the REIT has depreciated to S$0.25 from S$0.27 due to depreciation in yen (Note: this is still higher than its current price of S$0.19).
- Japanese economy is showing signs of a pick-up (Note: as I have mentioned in my previous post, the Japan PM is taking bold and concrete steps (i.e. not just talk only) to improve the country's economy.)
- Management is committed to re-gear to expand portfolio (Note: as shown by the increases in DPU over the past years.)
- Forward looking yield of 6.4% (FY14F) and 6.5% (FY15F).
- Fair value deemed as S$0.20 and rated long term BUY.
An earlier report posted in The Edge Singapore may be found here:- The Edge Singapore on Saizen REIT posted on 22 April 2013
If you are reading this, you may also be interested in:-
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.
Monday, 13 May 2013
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:-
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:-
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.
- 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:-
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.
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