Saturday, May 20, 2017

"May 17" - SG Transactions & Portfolio Update"

No.
 Counters
No. of Shares
Market Price (SGD)
Total Value (SGD) based on market price
Allocation %
1.
CDL Hospitality Trust
60,000
1.61
96,600.00
16.0%
2.
Fraser Logistic Trust
80,000
0.99
79,200.00
13.0%
3.
M1
35,000
2.25
78,750.00
13.0%
4.
IReit Global
73,000
0.755
55,115.00
9.0%
5.
Fraser Comm Trust
40,000
1.365
54,600.00
9.0%
6.
Singtel
10,000
3.73
37,300.00
6.0%
7.
LippoMall Trust
80,000
0.42
33,600.00
6.0%
8.
Elec & Eltek
15,000
1.37*
28,770.00
5.0%
9.
Comfortdelgro
11,000
2.42
26,620.00
4.0%
10.
Far East Hospitality Trust
40,000
0.615
24,600.00
4.0%
11.
Micro-Mechanics
15,000
1.275
19,125.00
3.0%
12.
Keppel DC Reit
13,000
1.255
16,315.00
2.0%
14.
First Reit
8,134
1.35
10,981.00
1.0%
15.
OCBC
34
10.41
     354.00
1.0%
16.
Warchest*
38,000.00
6.0%
Total SGD
599,930.00
100.00%

It's been a very eventful month of May and I continue to be grateful for what's been given. I'm always a bit wary when things went so well for me. I've got to prepare mentally for rainy times.

The STI market continues to pick up stronger as it moves towards halfway through the year. Banks have been a big beneficiaries of the stronger STI performance and I clearly missed the opportunity by having little to no exposure on banks and have laggard performances in the telcos.

The Reits continue to push much stronger than my expectation and it continues to contribute a lot onto the increase in the portfolio, with CDLHT and FCOT mainly leading the way.

I'll quickly briefed through some portfolio movements from the last update to this one.



First, I accumulated more positions in Singtel as I believe the weakness is largely overdone and it should be a beneficiary should the STI trends higher. As it is, when they announced their full year results, it proves that the share of associates and its investments are paying off to help mitigate some of the local weakness in the ARPU.

I also accumulated a lot more positions in M1 under the same previous thesis that I believe it represents cheap valuation at a price near $2. The share price has since gone up 10% since my accumulation under what they called the "strategic review". I believe this will still happen at a premium higher than today and I think I have a good enough exposure in the company to take advantage of that.

I sold my UOL at a price of $7.19 for some very small profits on the back of their full year results. I like what the company is doing with most of the investment properties and believe the commercial sectors will benefit in the next few years to come though the low yield payout that they are distributing has made me think twice in recent times. 

I also added a new position in Elec & Eltek, a company which I used to own in the past. The share price has been going north strongly since they announced a turnaround in 2016 and a strong Q1 performance in 2017. Still, with the recent acquisitions of Kingsboard, the EV/forward EBITDA valuation of Elec & Eltek does seem to look cheap from that view and the main reason I added a small position to the company to monitor their progress. The company seems to also manage a nice product mix this year so it'll be nice to see if they can continue to hit the momentum for the rest of the 9 months ahead. I also reckon an interim dividend to be restored back this year on the back of a strong first quarter.

I also sold and bought back Comfortdelgro which I wrote a separate article here. When I divested at $2.73, I was expecting them to have a poor quarter and I managed to add them back when it drops after the results. Never did I thought for them to have such a strong reaction to the results which I have elaborated on the post itself. It's a keep for now, I think it easily represents a good long term value.

Last but not least, I also averaged up Fraser Commercial Trust (FCOT) on the back of a stronger commercial play in the next few years. I have also decided to take the dividends for this as a scrip so the intention is to have this as one of my core play in the next few years. The HP tenancy is always going to lead the headlines but I think as Reit managers, they would have expected this and plan for contingency, which I think they did. This applies to all Reits managers as well. 

Dividends

This is a month of a bumper dividends coming in which I have updated here.

I've received about half from cashflow view so far, and will be awaiting for the other half in the next month payout. This will be included in the next month portfolio update.

Other "Investment"

This is the other big one concluding this month.

Back in Jan, I mentioned putting some of my funds in Chelsea as one of my conviction play "punting" for this year.

Not to shy away from the nature of the gambling itself, I did due diligence on my own risk management by writing off the entire amount which I can tolerate.





The result of Chelsea winning the EPL means I manage to add $40,050 back into the portfolio as part of that warchest.

The cost of capital is somewhere in the region of $24,000 with an average return of about 68%. This is high risk (binary decision of winning or losing) and high return.

Net Worth Portfolio

The portfolio has grown from the previous month of $523,890 to $599,930 this month (+14.5% increase month on month; +42.5% year on year). This includes capital injection.


In terms of equity performance (excl. cash), it is running slightly stronger than the STI at 21.7% (TWR) thus far. This will be reviewed once a month just to see where it is heading.

STI seems to be heading towards the selling in recent days so it could well be a good opportunity or a coming correction that's to come.

Stay vigilant. Thanks for reading.

How's May doing for you so far?



22 comments:

  1. Hi B,


    May i know the breakdown of your total capital invested, dividend, and capital appreciation out of the 599k? Thanks!

    ReplyDelete
    Replies
    1. Hi Anonymous

      $230K comes from realized gain and dividends received, the rest is from cost of capital.

      Delete
  2. Hi Brian, you have been wonderful in sharing such confidential information for others to learn and benefit as like you, something very difficult to see in this material world. i read an article in ST a month ago, since then I was curious to your blog to know what you do right for things to happen as you feel like.. kudos and wishing you all the best.. Rai

    ReplyDelete
    Replies
    1. Hi Rai

      Thank you much for your kind words and comments.

      I hope we all can learn together and grow to be better at the things.

      Delete
  3. I wanted to like the post.. but the chelsea champions part.. :(

    ReplyDelete
    Replies
    1. Hi Dan O

      I am a liverpool fan myself :(

      Delete
  4. B - Nice "bonus" from the BPL 🤣

    ReplyDelete
    Replies
    1. Hi Mr. IPO

      haha yes it helps certainly.

      Delete
  5. B,

    Looking at your portolfio, it seems you are moving towards income generation. Are you planning your next move?

    ReplyDelete
    Replies
    1. Hi Blursotong

      Yes, my strategy is to move towards the X + Y article I post not too long ago.

      Delete
  6. Impressive portfolio Bro. You really bet big on Chelsea and you are very lucky

    ReplyDelete
    Replies
    1. Thankfully its a lucky year this year for the blues.

      Delete
  7. Thanks for sharing your EPL bet! Looking forward to more sharing.

    ReplyDelete
  8. Power. Investor cum punter. No horse run

    ReplyDelete
  9. I read that you've accumulated a large position in M1. Any idea how long the deal process will take? And what's your target price in mind?
    Thanks.

    ReplyDelete
    Replies
    1. Hi James

      I am expecting the deal to come not longer than 9 months actually, and given the many suitors I think its not difficult to find a deal that will come nice.

      Delete
    2. Thanks. How would buyers value a telco like M1 to work out the potential buyout price?

      Delete
  10. You seem to go heavy on the reits. Aren't you wary of interest rate hikes?

    ReplyDelete
    Replies
    1. Hi Eyesonretirement

      The interest rates hikes is no longer a fear factor and has largely been priced in.

      Companies including Reits are now taking advantage of the stronger economy to run a stronger rental reversion which contributes more to their bottomline than the increase in interest costs.

      Delete
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