I sold off my entire holdings (500 shares) of FCT today at $2.10, for a small 5% gain. Reason was that the price had risen sharply following Brexit (most of the local REITs rose quite ridiculously), and was now beyond what I thought was reasonable.
Firstly, the Price to Book Value is now about 1.12x, which is a bit more than I'm comfortable with. In addition, the upcoming renovations and upgrading at NorthPoint, which is their 2nd highest income contributor at ~28%, will likely affect the yield in the short to mid term. Combining these 2 factors gives me a certain measure of certainty that the price will drop to a more reasonable level.
Unlike other divestments that I've made in the past, the cash I've gotten from selling FCT will be kept in reserve, until a price that will provide a better margin of safety presents itself, likely to be in the $1.9x range.
Friday, 1 July 2016
Friday, 3 June 2016
Portfolio Update May 2016
We have officially reached the halfway mark of the year, and an update for the portfolio is in again! May was quite a busy month for me, making several transactions. Sold off all my holdings in NeraTel due to the announcement that they were selling off their payment solutions business. Also bought Kingsmen Creative shares on 2 seperate occasions, taking the opportunity to average down. Bought more Omega Healthcare Reit for my US stocks as well.
In addition, took dividends in ST Engineering, NeraTel, Hock Lian Seng, LMIRT and First Reit for SGX, and OHI for NYSE.
SGX:
Bought:
300 shares KingsMen Creative
Sold:
1300 NeraTel
Bought:
7 share of Omega Healthcare Reit
Total dividends received: USD$7.17
Dividends received in 2016: USD$7.17
Yield on cost: 0.89%
In addition, took dividends in ST Engineering, NeraTel, Hock Lian Seng, LMIRT and First Reit for SGX, and OHI for NYSE.
SGX:
| Stock Name | Units | Cost | Cost (Per Unit) | Dividends Collected |
| First REIT | 3301 | $4,128.07 | 1.251 | $225.25 |
| Keppel DC REIT | 1000 | $937.00 | 0.937 | $68.40 |
| Saizen REIT | 2000 | $1,724.21 | 0.862 | $2,201.60 |
| iReit | 400 | $225.11 | 0.563 | $11.41 |
| LMIRT | 700 | $244.59 | 0.349 | $23.57 |
| Hock Lian Seng | 2800 | $1,146.67 | 0.410 | $142.00 |
| OCBC | 400 | $3,959.45 | 9.899 | $54.00 |
| ABF Bond Fund | 300 | $343.22 | 1.144 | $7.95 |
| KingsMen Creative | 1200 | $950.00 | 0.792 | $5.00 |
| NeraTel | 0 | $0.00 | 0.000 | $20.50 |
| Accordia Golf Trust | 1500 | $876.58 | 0.584 | $20.88 |
| AIMS AMP Industrial REIT | 500 | $659.65 | 1.319 | $8.55 |
| ST Engg | 200 | $563.35 | 2.817 | $20.00 |
| Singtel | 100 | $378.90 | 3.789 | $6.80 |
| Fraser Centrepoint Trust | 500 | $996.93 | 1.994 | $0.00 |
Bought:
300 shares KingsMen Creative
Sold:
1300 NeraTel
Total dividends received*: $703.91 (excluding special dividend from Saizen)
Dividends received in 2016: $130.97 (excluding special dividend from Saizen)
Yield on cost: 4.21%
*DRIP Shares:
101 First REIT
NYSE:
Dividends received in 2016: $130.97 (excluding special dividend from Saizen)
Yield on cost: 4.21%
*DRIP Shares:
101 First REIT
NYSE:
| Stock Name | Units | Cost /USD | Cost (Per Unit) / USD | Dividends Collected |
| Berkshire Hathaway | 2 | $271.45 | 135.726 | $0.00 |
| BP | 3 | $111.75 | 37.250 | $2.37 |
| Omega Healthcare Reit | 6 | $191.93 | 31.988 | $4.80 |
Bought:
7 share of Omega Healthcare Reit
Total dividends received: USD$7.17
Dividends received in 2016: USD$7.17
Yield on cost: 0.89%
Purchase: Tai Sin Electric
After selling off NeraTel, I shopped around for another company to take its place within my portfolio. Enter Tai Sin Electric.
A company selling cable and wire products, Tai Sin operated mainly in the South East Asia region. Looking at the financial report, Tai Sin shows remarkably consistent performances in the past 5 years, with revenue, Return of Assets, Return on Capital and EBITDA staying within a narrow band. While this might not be appealing to a growth investor, it shows a stable, matured company which allows for a stable dividend yield, ideal for an income investor like me. indeed, for the past 4 years the dividend has been a steady 2.1 to 2.2 cents per year, translating to a dividend yield of 6.92%. However one thing to take note of would be that the payout ratio has increased quite dramatically, from 22% in 2012 to 57% in 2015.
At the price of $0.33, Tai Sin shares are selling at a P/B and P/E ratio of 0.931 and 7.851 respectively, which are relatively cheap valuations for a stable matured company. Tai Sin also has no long term debt, which adds a margin of safety a la Ben Graham.
Business outlook for the company looks good, with the opening up of the Myanmar economy (new buildings etc), as well as projected increase in government spending on infrastructure and construction in Singapore. Buildings need electricity, and electricity requires cables and wires, positioning Tai Sin to make a good profit, should they secure projects.
In buying Tai Sin, I have loaded up on a company which in the near to mid term is likely to experience some growth, a dividend yield that is reliable, and a certain margin of safety. Doesn't hurt that the dividend yield in this case is higher than NeraTel's. Will be keeping an eye out for the stock prices and accumulate as and when weaknesses strike.
Vested with 2000 shares.
A company selling cable and wire products, Tai Sin operated mainly in the South East Asia region. Looking at the financial report, Tai Sin shows remarkably consistent performances in the past 5 years, with revenue, Return of Assets, Return on Capital and EBITDA staying within a narrow band. While this might not be appealing to a growth investor, it shows a stable, matured company which allows for a stable dividend yield, ideal for an income investor like me. indeed, for the past 4 years the dividend has been a steady 2.1 to 2.2 cents per year, translating to a dividend yield of 6.92%. However one thing to take note of would be that the payout ratio has increased quite dramatically, from 22% in 2012 to 57% in 2015.
At the price of $0.33, Tai Sin shares are selling at a P/B and P/E ratio of 0.931 and 7.851 respectively, which are relatively cheap valuations for a stable matured company. Tai Sin also has no long term debt, which adds a margin of safety a la Ben Graham.
Business outlook for the company looks good, with the opening up of the Myanmar economy (new buildings etc), as well as projected increase in government spending on infrastructure and construction in Singapore. Buildings need electricity, and electricity requires cables and wires, positioning Tai Sin to make a good profit, should they secure projects.
In buying Tai Sin, I have loaded up on a company which in the near to mid term is likely to experience some growth, a dividend yield that is reliable, and a certain margin of safety. Doesn't hurt that the dividend yield in this case is higher than NeraTel's. Will be keeping an eye out for the stock prices and accumulate as and when weaknesses strike.
Vested with 2000 shares.
Tuesday, 31 May 2016
Cash or DRIP?
Readers have asked me how is it that I have odd lots (<100 shares) in my holdings of First REIT. That, my dear readers, is the result of Dividend Reinvestment Program (DRIP). As the name suggests, instead of taking cash payments for your dividend payouts, you choose to pump in the money back into the stock in exchange for shares. Not all companies have this dividend policy in the Singapore Exchange, in my holdings I have First REIT and OCBC as examples.
The advantage to companies with DRIP policies is that they won't have to give out cold hard cash to shareholders, conserving the cash for other uses. The disadvantage would be that the amount of outstanding shares increases, which might lead to dilution in Earnings-per-Share (EPS), lower dividend payouts in future (assuming no earnings growth) etc.
Advantages to the shareholders on the other hand, are that the shares offered in such programs are discounted from those in the open market, from around 3% for First REIT, to a whopping 10% discount for OCBC! This means that, assuming there's no change in the share price on the open market, you would have reaped a gain more than the cash payment would have been. In addition. this would also allow shareholders to accumulate stocks at a cheaper and faster rate. Faster, as the shares thus accumulated would entitle you to more dividends the next time round. For example, 1000 shares of OCBC would entitle you to 25 DRIP shares, giving you a total of 1025 shares. Future dividend rates would then be based on your 1025 shares instead. Assuming this continues on and on, the compounding rate would ensure high growth before long.
So now the question is, do we go for DRIP? Or would cash be a better option? I would say that it depends on the time frame in question. Personally, as I'm still working, and not financially burdened (kids, housing loan etc), and thus having no need of any excess cash, I would much prefer to participate in as many DRIP as I can, to take advantage of the cheaper prices offered, maximise the growth of my portfolio, and to shorten the time till my financial independence. Likely to continue with this strategy for as long as possible (5-10 years maybe?).
The advantage to companies with DRIP policies is that they won't have to give out cold hard cash to shareholders, conserving the cash for other uses. The disadvantage would be that the amount of outstanding shares increases, which might lead to dilution in Earnings-per-Share (EPS), lower dividend payouts in future (assuming no earnings growth) etc.
Advantages to the shareholders on the other hand, are that the shares offered in such programs are discounted from those in the open market, from around 3% for First REIT, to a whopping 10% discount for OCBC! This means that, assuming there's no change in the share price on the open market, you would have reaped a gain more than the cash payment would have been. In addition. this would also allow shareholders to accumulate stocks at a cheaper and faster rate. Faster, as the shares thus accumulated would entitle you to more dividends the next time round. For example, 1000 shares of OCBC would entitle you to 25 DRIP shares, giving you a total of 1025 shares. Future dividend rates would then be based on your 1025 shares instead. Assuming this continues on and on, the compounding rate would ensure high growth before long.
So now the question is, do we go for DRIP? Or would cash be a better option? I would say that it depends on the time frame in question. Personally, as I'm still working, and not financially burdened (kids, housing loan etc), and thus having no need of any excess cash, I would much prefer to participate in as many DRIP as I can, to take advantage of the cheaper prices offered, maximise the growth of my portfolio, and to shorten the time till my financial independence. Likely to continue with this strategy for as long as possible (5-10 years maybe?).
Friday, 20 May 2016
Sell: NeraTel
Neratel recently announced that they have come to an agreement with Ingenico Group S.A. to sell off their payments solution assets. This deal makes no sense to me given that their payments solutions wing is quite well established, and enjoys certain monopolies in neighbouring countries. Its also growing as a proportion of their overall revenues and profits, and part of the reason why Neratel was a compelling investment choice for me, with its stable income stream enabling the company to give a steady dividend to its shareholders. The other parts of Neratel's business in contrast have unpredictable income streams as they are largely based on projects, not ideal for an income investor like me. Sure, shareholders will be rewarded by the disposal of the asset, but its akin to killing the goose that lays the golden eggs.
It is likely that I would be disposing my shares, barring any further news between now and Monday. Thankfully, a recent price correction enabled me to reduce my average price to below 60 cents. With Neratel's price fluctuating between 69 - 70 cents, I am looking at capital gains of more than 20%. Not a bad investment if I could say so myself. Sadly I wasn't able to get more of their dividends though.
Now...what do I do with the spare cash....
It is likely that I would be disposing my shares, barring any further news between now and Monday. Thankfully, a recent price correction enabled me to reduce my average price to below 60 cents. With Neratel's price fluctuating between 69 - 70 cents, I am looking at capital gains of more than 20%. Not a bad investment if I could say so myself. Sadly I wasn't able to get more of their dividends though.
Now...what do I do with the spare cash....
Thursday, 5 May 2016
Portfolio Update April 2016
Another month passed again. Nothing much happened, made some small purchases in Fraser Centrepoint Trust after shopping at Waterway Point in Punggol, as well as doing some research on the company. A defensive stock which I feel comfortable keeping through the likely recession coming soon. Also purchased shares in NeraTel and Hock Lian Seng to average down.
SGX:
Bought:
1000 shares Hock Lian Seng
600 shares NeraTel
500 shares Fraser Centrepoint Trust
Bought:
1 share of Omega Healthcare Reit
Total dividends received: USD$4.74
Dividends received in 2016: USD$4.74
Yield on cost: 0.78%
SGX:
| Stock Name | Units | Cost | Cost (Per Unit) | Dividends Collected |
| First REIT | 3267 | $4,128.07 | 1.264 | $198.92 |
| Keppel DC REIT | 1000 | $937.00 | 0.937 | $68.40 |
| Saizen REIT | 2000 | $1,724.21 | 0.862 | $2,201.60 |
| iReit | 400 | $225.11 | 0.563 | $11.41 |
| LMIRT | 700 | $244.59 | 0.349 | $17.76 |
| Hock Lian Seng | 2800 | $1,146.67 | 0.410 | $72.00 |
| OCBC | 400 | $3,959.45 | 9.899 | $54.00 |
| ABF Bond Fund | 300 | $343.22 | 1.144 | $7.95 |
| KingsMen Creative | 900 | $754.80 | 0.839 | $5.00 |
| NeraTel | 1300 | $743.98 | 0.572 | $7.50 |
| Accordia Golf Trust | 1500 | $876.58 | 0.584 | $20.88 |
| AIMS AMP Industrial REIT | 500 | $659.65 | 1.319 | $8.55 |
| ST Engg | 200 | $563.35 | 2.817 | $0.00 |
| Singtel | 100 | $378.90 | 3.789 | $6.80 |
| Fraser Centrepoint Trust | 500 | $996.93 | 1.994 | $0.00 |
Bought:
1000 shares Hock Lian Seng
600 shares NeraTel
500 shares Fraser Centrepoint Trust
Total dividends received: $572.94 (excluding special dividend from Saizen)
Dividends received in 2016: $98.97 (excluding special dividend from Saizen)
Yield on cost: 3.21%
NYSE:
Dividends received in 2016: $98.97 (excluding special dividend from Saizen)
Yield on cost: 3.21%
NYSE:
| Stock Name | Units | Cost /USD | Cost (Per Unit) / USD | Dividends Collected |
| Berkshire Hathaway | 2 | $271.45 | 135.726 | $0.00 |
| BP | 3 | $111.75 | 37.250 | $2.37 |
| Omega Healthcare Reit | 6 | $191.93 | 31.988 | $2.37 |
Bought:
1 share of Omega Healthcare Reit
Total dividends received: USD$4.74
Dividends received in 2016: USD$4.74
Yield on cost: 0.78%
Friday, 1 April 2016
Portfolio Update Mar 2016
Portfolio update!!! Received the special dividend from Saizen REIT, still coming to grips on the loss of a great cashflow stock. Having said that however, some of the money was put to good use in purchasing some stocks to replenish the loss of cashflow. Will be keeping the unspent cash on hand for better opportunities should the market correct itself again.
SGX:
Took out the market value column, since my goal isn't based on capital gains anyway.
Bought:
100 shares OCBC
200 shares Kingsmen
Total dividends received: $572.94 (excluding special dividend from Saizen)
Dividends received in 2016: $98.97 (excluding special dividend from Saizen)
Yield on cost: 3.59%
NYSE:
Total dividends received: USD$4.74
Dividends received in 2016: USD$4.74
Yield on cost: 1.0%
SGX:
| Stock Name | Units | Cost | Cost (Per Unit) | Dividends Collected |
| First REIT | 3267 | $4,128.07 | 1.264 | $198.92 |
| Keppel DC REIT | 1000 | $937.00 | 0.937 | $68.40 |
| Saizen REIT | 2000 | $1,724.21 | 0.862 | $2,201.60 |
| iReit | 400 | $225.11 | 0.563 | $11.41 |
| LMIRT | 700 | $244.59 | 0.349 | $17.76 |
| Hock Lian Seng | 1800 | $750.74 | 0.417 | $72.00 |
| OCBC | 400 | $3,959.45 | 9.899 | $54.00 |
| ABF Bond Fund | 300 | $343.22 | 1.144 | $7.95 |
| KingsMen Creative | 900 | $754.80 | 0.839 | $5.00 |
| NeraTel | 700 | $419.08 | 0.599 | $7.50 |
| Accordia Golf Trust | 1500 | $876.58 | 0.584 | $20.88 |
| AIMS AMP Industrial REIT | 500 | $659.65 | 1.319 | $8.55 |
| ST Engg | 200 | $563.35 | 2.817 | $0.00 |
| Singtel | 100 | $378.90 | 3.789 | $6.80 |
Took out the market value column, since my goal isn't based on capital gains anyway.
Bought:
100 shares OCBC
200 shares Kingsmen
Total dividends received: $572.94 (excluding special dividend from Saizen)
Dividends received in 2016: $98.97 (excluding special dividend from Saizen)
Yield on cost: 3.59%
NYSE:
| Stock Name | Units | Cost /USD | Cost (Per Unit) / USD | Dividends Collected |
| Berkshire Hathaway | 2 | $271.45 | 135.726 | $0.00 |
| BP | 3 | $111.75 | 37.250 | $2.37 |
| Omega Healthcare Reit | 6 | $191.93 | 31.988 | $2.37 |
Total dividends received: USD$4.74
Dividends received in 2016: USD$4.74
Yield on cost: 1.0%
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