I have not been doing this for a while already. The constant bear rampage in the financial markets has made it very painful to look at stock prices. Many who bought at the Oct peak last year would have been badly burnt by now. With stock prices dropping like stones and negative news hitting the newswires every other day, lofty valuations have finally come down to more realistic prices. For those who have yet to foray into the financial markets, it might be time to wade slowly into uncharted waters. Anyway, I am listing my current holdings to remind myself why I even bought them in the first place.
1. Courts – The mega electronics cum home furniture retailer in Singapore. The company recently underwent major management restructuring as the previous owners sold their shares to the Singapore Retail Group. SRG currently owns close to 85% of the company and they would probably delist the company when they achieve 90% ownership. The company shuttered their loss-making operations in Thailand but the flagstore stores in Singapore continue to generate healthy profits. Last known NAV (Net Asset Value) was 80 cents. I bought this at 62 cents, hoping for the prices to rise to NAV but prices have been subdued since the subprime shit hit. Last price transacted at 46 cents. Have collected 6 cents in special dividends to date. I am still holding on but will divest before the company is delisted.
2. Metro – Homegrown apparels retailer with half a decade of history. Majority owned by the wealthy Ong family. The company has vacated its Century Square premises last August but opened a bigger store in Klang Valley, Malaysia. Despite flagging retail sales, the interesting story behind this company is really the office and retail properties it owns in Asia, most notably in China. I am banking on the consumption story in China when I bought the shares at 96 cents and hoping for property prices in China to elevate further. Last transacted price at 78 cents. Have collected about 5 cents of dividends. Last known NAV was 140 cents. PE ratio is probably at 15 times now. I believe plentiful rewards will abound to the patient.
3. SPH – The century old local broadsheet which owns prime property Paragon and have launched several online projects to capture the online publishing and advertising market. Cases in point: Mocca and ST701 Search, whose successes remain to be seen. A dividend play that gives out around 25 cents a year. Bought at $4.34 and last transacted price was hovering around $4.30s. I am treating this as a bond which issues a fixed coupon every year although I can sense that the classifieds are becoming thinner these days.
4. ComfortDelgro – This was one of the first companies I looked at when I started investing. (My first was NOL, a grandfather stock which has survived the crests and troughs of the cyclical shipping business.) CD commands a substantial share in the local transport industry. The second is of course, the ubiquitious SMRT which only has operations in Singapore but is nimble enough to capitalise on the rental shop business when rental prices were shooting through the roof the last 2 years. Anyway, CD owns substantial stakes in SBS (75%) and Vicom (%??). It is the second largest transport operator in the world and has investments in Australia (Cabcharge), UK (Metroline), China (Szechuan, Chengdu) and others. It operates the North East MRT line in Singapore as well as the Comfort and Yellow Top cabs in Singapore. However, fate has not been kind to the company in 2008. After hitting an all-time high of $2.40 last year, it has since hovered around the $1.60 range when it was hit with 2 major pieces of bad news. The first is the “nationalisation” of the local transport business which LTA would assume the role of route planner and price fixer. This means the heydays of running to the PTC (Public Transport Commitee) to request for fare hikes is over. Good for the consumer but bad for the business. The second piece of negative news is the recent Sichuan earthquake which is sure to cause a dent in their 2Q08 financials. However, I am comforted to know that the company has converted some of its buses in Sichuan into temporary emergency vehicles to transport supplies and the injured to the hospitals. But business is business and I am sure profits would be lower this year. I bought below $1.60 and last transacted price is around $1.60. Received about 3 cents in dividends so far. I like the management’s proposal to raise CD’s global profile to 70% of its revenue as Singapore is a stagnating and highly-controlled market. However, fuel cost is going to burn a deep hole in their pockets. I would buy more if prices come down any further.
5. Creative – A celebrated home-grown IT business renowned for its sound-blaster success during the dotcom days but has since whittled down to a nobody after its bigger rival, APPLE launched competing products. Seems like a US$100M compensation awarded to Creative in 2007 (from APPLE, which allegedly infringed on Creative’s copyrights) did not manage to propel Creative to greater heights. Creative’s main revenue stream is driven from the US and the declining US consumer spending is not helping matters. Revenues continue to plunge with each passing quarter. Bought at $7.35 (its peak was $60) but have since dropped to $6.55. I am hoping for a M&A from a bigger rival to unlock its values.
6. Cerebos Pacific – An interesting company that sells health supplements with Brands essence being its most well-known brand (no pun intended). 90% owned by the powerful Suntory Group in Japan, hence this explains for its trading illiquidity. This company has been distributing 25-cent dividends per share over the last 4 years. Bought at $4.22. Last transacted price at $3.80s. Collected 25 cents this year. I am treating this share as a bond with yearly coupon payouts.
7. Singpost – Bought at $1.16. Last transacted at $1.09. Company pays out a minimum of 80% of its earnings (about 5 cents/year). Boring, staid company with a new CEO in place. Transforming its postal/delivery business and adding other services (GE money “James”, Vpost, tie-ups with loan/remittance companies). Owns Singpost centre near Paya Lebar MRT station. Recently leased its Tanglin branch to premier furniture retailer, Friven. I believe the core postal and delivery business remains intact despite the volatility in the financial markets. And it can always raise postal fees. Quite recession proof so I will keep this.
8. SBS Transit – Same reasons as ComfortDelgro. Bought at $2.82, last transacted at $2.23. Same reasons as CD for the drop in prices. I bought this to hedge against fare hikes but seems like the strategy will not work for long.
9. Keppel – Finally, the silver lining behind the dark clouds. My darling stock in a looong while. Bought this to hedge against rising oil prices and the strategy has proven fruitful. Bought at $11. Last transacted at $11.80, even after collecting 55-cent dividends for FY07. The numero uno oil rig builder in the world. A conglomerate that owns properties (Keppel Land, K Reits), a fledging infrastructure and environmental business, as well as investments (K1 Ventures, SPC etc.) My only regret is not having bought more when its price dropped below the psychologically important $10 mark. One of its directors recently raised his personal holdings through open market purchases. All these bode well for the company. Will keep this for a long time though I am quite tempted to sell if its price hit $13. Who knows when the oil bubble will burst?
A note that some of my holdings are less than 1 lot (1000 shares). Else, I would be typing this on a tropical island sipping exotic juices (and skinny-dipping with even more exotic girls) if I own 1000 lots of SPH, Keppel and ComfortDelgro. My next targets are Singtel (dropped to $3.60~ ever since it was faced with anti-trust issues in Indonesia and the strengthening Sing $ eroding its operating margins). I was also thinking of buying DBS when it was close to hitting $16 a few months back (last transacted at $20~). Besides local stocks, I am keen on H shares (Chinese companies listing on the Hong Kong Stock Exchange) especially China Insurance, China Mobile, Citic Securities and a couple of education, travel & retail stocks. I am banking on the China consumption growth story as well as the appreciating renminbi.
Caveat Emptor: Do your usual research and do not based your buy or sell decisions on my ramblings. However, I am always happy if you buy me dinner when you make some coffee money out of this.
