Saturday, 22 December 2012

Nera Tel offer - Independent Board's view

I received the circular from Nera Tel's independent board of directors this week.



The view from their appointed advisor was that the $0.49 offer was fair but not compelling. In this regard, it is recommending that the shareholders reject the offer. The independent directors also supported the recommendation for shareholders to reject the offer.



The key shareholder, Eltek, was selling as part of its directive to divest non core assets, hence may not be waiting out for the best value - what crap. Wouldn't they be compromising the value to their shareholders?

The offeror, Northstar Group, is a private equity fund manager based in Indonesia and backed by TPG, a US-based Private Equity firm. US Private Equity firms have been setting up base in Singapore with a view of increasing exposure to the SE Asia region. Obviously they see tons of value at $0.49. Private Equity managers will only invest if they can get an eventual overall return of at least 2x or an IRR of at least 18%-20%. Northstar does not intend to revise the offer price but it is also unlikely a bidding war will happen as Northstar has already gain 'majority control' of the Company.

As Nera Tel has no debts, there are plenty of ways to "extract" value through leveraging. I am just wondering whether they are able to do that without buying out the minority shareholders like me. Probably they will try to increase the debt at the company level and pay out dividends to shareholders if they managed to privatize the company. They will hope to create value by restructuring the company and business, re-incentivised the current/new management (as in Courts Asia or Amtek's case).   In the event that they can't privatize the company, i hope they will continue to pay out the dividends if the company continues to be cash flow positive as it also benefit them.

Let's see how it pans out in the coming days but I will not accept the offer as well as the offer is really not valuing Nera Tel at the fair value. The offer will expire on 8 Jan 2013 at 5pm.

Tuesday, 18 December 2012

Starfish SRS Portfolio update

Finally back from a prolonged period of travelling. I will do a quick update on the Starfish SRS portfolio

Far East Hospitality Trust

Good to see the Trust making hotel acquisition - Hotel Rendevous in Singapore. Hopefully it will add more yield accretive and interesting portfolio hotels in future.



M1



Every time i look at this counter, my heart ache comes back. hahaha... Starhub is still doing very well! I think the lesson learnt will be to add on M1 instead of "switching out" of Starhub! 



Nera Tel

Some readers asked me if they should accept the "offer letter". My view is this, if you intend to accept the offer, you might as well sell into the current market at the same or better price. In this way, you will get the money back faster. You should only "accept the offer" if the current market price is trading below the offer price. You should not accept the offer if you think the offer price is too low and an insult to your intelligence.


The previous buyout ended with a victory for the Minority shareholder. It will be interesting to see if this offer will end up in the same situation. I don't think the minority shareholders are impressed by the offer on the table.

Perennial China Retail Trust

Pleasantly surprised to see the stock finally moved from my entry price! The entry post at 50c on Sep 22 was here.


What should be the "right strategy" for my SRS portfolio?

I know i shouldn't be trading and "rebalancing" this portfolio too actively. I have traded UOB and Keppel Corporation in the post here and cut losses on STXOSV, Cache Logistics and Suntec REIT in the post here.  Frankly i think i shouldn't be 'trading' my passive income portfolio. This portfolio should be to generate passive income for my retirement.


A few interesting stocks previously mentioned.

Courts Asia - has done pretty well from my post here!  




Religare - Hit a high of 89c from my earlier posting

Saturday, 8 December 2012

UOB & Keppel Corporation & Dividends Received in November

UOB

The investment in UOB turned out to be better than expected. My earlier post is here. It closed at $19.73 yesterday. I have decided to exit the position as it has already reached my original target and i am travelling for another week. You may want to do a trailing stop if you have also entered the position. Frankly i shouldn't be trading by SRS portfolio but the price is looking too tempting not to exit and create some "dividends" for myself.


Keppel Corp



I have also decided to exit my position in Keppel Corporation. Not sure if this is a wise decision.

Dividends Received for Nov

The SRS portfolio received the following dividends:

Starhill - $111 
Cache Logistics - $107.20 (already divested) The link is here.
Suntec - $117.50 (already divested). The link is here.
Interest - $1.64

Happy SRSing.


Saturday, 1 December 2012

China Fishery Group - Not again?!

Sorry for the fans of China Fishery. It is one disappointment after another for the company. The latest results created a disappointment among investors and the latest bad news was regarding its illegal fishing rights in Russia. The news article is here.


The above chart is the weekly chart of China Fishery Group. Here are my original entry and exit postings and my afterthoughts. It is always heartening to have some "anonymous" reader who warned me about the Russian fishing rights even before the news broke out. (Read the comments section in the entry posting). The link to that particular comment is here. Don't know who you are but thanks :)

Lesson 1 - Analysts

The incident also brought to mind another lesson which i shared previously. The analysts don't get it. (Maybe most analysts don't get it, to give credit to the better ones). At the time of my purchase, i think many analysts were shouting for a Buy. (not sure why the previous picture on the analysts targets are missing from my earlier post.). You have to make your own decisions and not rely too heavily on analysts.

Lesson 2 - Cutting Loss

It also demonstrate the importance of cutting loss quickly when deep in your heart you know you have made a mistake. My loss would have snowballed from a few hundred to a few thousands if i have stayed on in that position. Ouch. So my sympathy with those who still holding on. Hope the Company will repay your faith in them and that the dividends they paid are not robbing Peter to pay Paul

Lesson 3 - Learning how to short

If we open our horizon a bit further, actually this is not a bad stock after all. It is actually trending downwards and we can take a short positions on it when it broke the critical support at 84c. So instead of saving a few thousands by cutting loss early, the question i should ask is perhaps, why didn't i earn that few thousands dollar by shorting the stocks through CFDs? If you want to trade for a living (sorry this comment should fit better in my trading blog), then learning how to short a position is perhaps another skill set to be picked up so that you won't go hungry during periods where stocks are trending down.

I will leave these thoughts with you. It is a great weekend and have a good rest. :)

Thursday, 29 November 2012

Religare Health Trust

It is sheer amazing to see the number of initiation reports being issued on Religare this week.


There are 4 initiation reports!

CIMB - long term outperform with a price target of 95c. The report is here.

DBS - Buy for 10% yield and 97c target. The report is here. To give it due credit, i think it was the first to issue the initiation report.

Nomura - Buy with a target price of 93c. The report is here.

Standard Chartered - Buy with a target price of 96c.  


Share Chart


I spotted this counter yesterday but somehow just couldn't bring myself to invest in this company for the SRS portfolio. I do think downside is probably limited for now.  A break above 85 will be bullish.

Frustrating Week?

It was a frustrating week for the Starfish SRS account as i missed out on a few counters that i wanted to add on but the stocks left the train station before i could react.

The only consolation was that i added UOB and Keppel Corporation last week at the low. The post was here.

The stocks that i was eyeing to add to my SRS portfolio included:

  • Singtel at 3.15
  • AIMS Reit at 1.40
  • Kep REIT at 1.18

I guess part of the 'inertia' to add on to my SRS portfolio was because i have open trading positions in Sembcorp and Noble and that i am leaving Singapore soon for an extended break. 
It is still a tough act sometimes to act 'independently' for each account. hahaha.

STI

STI has reversed its bearish bias and turned neutral by closing above the neckline of 2,980 and then trending higher above the 3,000 level. It is too early to tell if the correction is over and whether it is heading towards 3,050 to form a triple top?


Happy investing and have a good season-ending break. :)

Thursday, 22 November 2012

UOB & Keppel Corp

UOB Ltd

Added one lot of UOB in my SRS account today at around $18 today.


The first target is around $19.00 but i think this counter will take a while to recover. 

Keppel Corp

Keppel Corporation has moved up since my initial purchase. The initial post is here.

Tuesday, 20 November 2012

Nera Tel & Keppel Corporation


Nera Tel



Nera Tel announced that its major shareholder, Eltek ASA has decided to sell its 50.5% stake in Nera Tel to Northstar at $0.49 each, thereby triggering a mandatory takeover offer. The announcement is here. I have purchased my shares in Nera back in August 6 at 41cents. The post is here.

This is the second time which Eltek ASA is trying to offload its stake in recent years. The previous offer by STE of 39c ended in a failure. I am not sure if there is any difference this time but the offer is better this time at 49c but it is still below the current trading price of 50c. The recent research report is here.

Keppel Corporation


I added 1 lot of Kep Corp at 10.17 today.


At the current price, the yield is more than 4% but the PE is below 10x. The analysts recommendations are below for your reference. My target is to sell this above $11 and receive the dividends during the interim if declared. Happy investing.


Thursday, 15 November 2012

Capital Preservation Mode

It turned out that November is an active month. I have previously shared with you my bearish view on STI and the fact that i would have cut my positions inCache, Suntec and STXOSV some time back. It turned out that i should have "stuck" to my initial instincts. With the benefit of hindsight, the decision to switch from Starhub to STXOSV and M1 turned out to be a foolish one as it created more volatility to my portfolio without adding value and created a loss.

Today i am in a capital preservation mode and decided to liquidate my positions in SRS for the 3 stocks this morning. Not too sure if it will be a good or lousy decision but i had no time to watch the market. I may progressively cut my remaining positions should my 'trailing' stops be triggered. The only problem with this strategy is that i may forget to buy back the counters ...

Cache Logistics



STXOSV 



Suntec


Wednesday, 14 November 2012

QAF Limited & Courts Asia

QAF Limited

It was a disappointing set of Q3 results released by QAF and the profit plunged by 51% for the same period last year.



Chart wise, it has been pretty disappointing as the share price closed at $0.735 today. I don't like what i am seeing from the fundamental aspect and sold my 8,000 shares this morning, achieving only a small profit. My original entry was here, way back in August. On hindsight, should i have gotten out around 84 cents and achieve a capital gain of around 19% instead of holding till now only to be let down by a set of disappointing results?



Courts Asia

I missed the boat for this one. Courts Asia announced a pretty nice set of Q2 results! My IPO write up was here.



Q2 Profit increased by 49% while 1H2012 profit improved by 28%. I always like companies that announce improving quarterly results. Perhaps the market wasn't expecting a set of robust results and traders and investors are all rushing in to buy the stocks, perhaps aided by short sellers covering this as well.



It can be a nice trading position if you get in this morning. A possible trade this morning would have been to buy at 72-73 with a cut loss at 65. Unfortunately my reflexes was pretty slow this morning. Was too busy with cutting my position in QAF. hahaha.. perhaps i should have switched from QAF to Courts instead. :-P

Tuesday, 13 November 2012

Cache Logistics and Suntec REIT

Cache Logistics


My "sell" alerts went off at 1.20 while i was travelling. I have mentioned about the burst of the yield bubble a few weeks back in this post.  I am still holding on to the stock in my SRS portfolio as it is not a trading portfolio but frankly the urge to take profits is there. 

Suntec REIT


Similarly, the sell alerts on Suntec also went off at 1.55. While I have not sold my positions yet, sometimes i do wonder if it is a good idea to sell first and buy back again when the prices have dropped. The only problem i have with such a strategy is that i always forget to buy back due to my busy schedule. hahaha.

I am unlikely to add on new positions to my SRS portfolio until i see clearer buy signals or when the share prices of the stocks i like have reached the support zone. Happy SRSing.

Sunday, 11 November 2012

SRS Portfolio as at 31 Oct 2012

Here is the update for the month of October.

Transactions in Oct

There were 3 transactions on 22 Oct 2012 as mentioned in my earlier post.

Bought 2 lots of M1 and 3 lots of STXOSV but sold my 2 lots of Starhub. The capital gains from Starhub was $3,024.10. This series of transactions actually brought more volatility to my SRS portfolio which wasn't my intention. It was quite ironic that Starhub reported quite a good set of Q3 results and analysts start to upgrade the counter to a buy!  After going XD, Starhub was last traded at $3.63, the price which i sold it on 22 Oct and I have effectively lost 5 cents per share worth of dividends. 

Dividends in Oct

Received my first distribution of UMS Holdings of $100! Excellent. 

My dividends from 1 Jan 2012 to 31 Oct 2012 is $1,539.10. This translate to a lowly $128 per month and still a long way from building up a passive income for my retirement. My short term target is to reach $500 per month. Let's see where 2012 will end at as a lot of stocks will announce dividends only after the final year ended. I will continue to add more REITs, Telco, and dividend paying stocks when the opportunity arises.


Portfolio as of 31 Oct 2012


Performance since inception till 31 Oct 2012

Total Capital since inception = $82,875.
Total Value since inception (include gains and losses, dividends and interest) = $98,111.99 
Return on Investment = 1.18x

The unrealised value have dropped given the recent fall in share prices and the portfolio breakdown will look like that as of 11 Nov 2012 share prices.

OCBC SRS Pamphlet

photo.JPG

OCBC has a pamphlet together with my OCBC credit card bill and is offering $50 Robinson voucher for an initial deposit of at least $10,000. Hmmm... why not you take up the offer with OCBC to open a SRS account and start investing for your retirement today? :)

Happy SRSing.



Tuesday, 30 October 2012

The burst of the Yield Bubble?

CDL HT reported a worst than expected results and dragged down the some of the REITs such as the Far East Hospitality REIT and the Ascott REIT. Not sure if this will be the "burst" of the yield bubble?


STXOSV


If this has been my trading position, I would have cut loss at 1.55. On hindsight, i have been to eager to buy shares for my SRS portfolio and has not bought a a good support level :( As mentioned earlier, this is a volatile stock and it has proven to be soon in recent days.

M1


Again, i have not been very "prudent" in that i have not waited till the price fall to a nice support level before buying :( A strong support will be between 245-255 area.

Starhub


Urrggh... such strong stock!! :( why did i even let it go!?.........

Friday, 26 October 2012

SRS Portfolio Weekly Review

This is a short week with 4 trading days. I am lazy and will not do a full scale update. Still trying to figure out why i sold Starhub and bought M1. urggh...hahaha :) Happy Holidays.

Cache Logistics

Announced its Q3 results this week.

The Q3 presentation slides is here.


The Trust will distribute 100% of the taxable income till 31 Dec 2012 but drop to 90% thereafter. The trust will distribute 2.144 cents per unit for this quarter and the payment will be made on 29 Nov 2012. 

The Starfish SRS portfolio will receive about $107.20 on that day. The yield is still pretty decent at current price.

Perennial China Retail Trust

PCRT will announce its results before market opens on 6 Nov.

QAF

QAF will announce its results after market close on 12 Nov.

Suntec REIT

The Q3 presentation slides is here.


The Q3 distribution per unit is 2.35c. Starfish SRS portfolio will get about $117.50 on 29 Nov 2012. The 3Q 12 results is not 'nice' and showed a 19.5% decline but this is likely due to its asset enhancement exercise. Let's see how the market will view this set of results on Monday.

Saturday, 20 October 2012

SRS Portfolio Weekly Review

Cache Logistics


A long tail appeared and 1.27 will be a resistance to overcome. No major news released this week but watch out for the yield bubble burst.

Far East Hospitality Trust


Showing signs of weakness as mentioned in my previous weekly review. One interesting news emerged yesterday that APG Pension has become a 5% substantial shareholder. The announcement is here. APG is the Dutch fund manager managing its pension fund. It is indeed good to see some real long term investors buying into FEHT. I would rate this as positive news.

M1


This is my new addition this week. The post is here. Frankly, i am not sure if this is a 'wise move' to switch from Starhub to M1, but we shall see. The company announced its Q3 results and the presentation slides is here. One thing I miss may be the quarterly distribution of Starhub of 5c each. Perhaps i should add M1 to Starhub instead of replacing M1 with Starhub. hahaha. Let see if i can buy Starhub back in future and maybe i will "hello Starhub" again. Not sure what i was thinking this week but perhaps i was 'misled' by the analysts?


It's a weak set of Q3 results and earnings decline 14.3% on a 9 month basis although M1 said Q4 likely to be better. Starhub will release its Q3 results on 2 Nov although it may still have that EPL capital expenditure hanging over its head. I definitely prefer Starhub's business model of "hubbing" broadband, TV and mobile. I think eventually M1 may be acquired by Starhub or Singtel or some foreign player as it is the smallest player here.

Nera Tel


Nice chart and a nice set of results. This is one company which i will consider adding on if there is any correction. I have a recent post this week on Nera Tel after its Q3 results.

Perennial China Retail Trust


Really require a lot of patience and it is not helping when i see Capita Retail China flying up like a rocket as you know that i was deciding between the two. My post was here. Capita Retail China has moved up by more than 10% whereas PCRT is still sleeping... urrghhh... This is one example of how one's life is being impacted by such this 'little decisions' we made? hahaha.



QAF



No major news released but i hate to see long tail. The tail becomes a resistance to overcome in the future but the bullish thing is that the counter is at 52 weeks high and there will probably be further upside.

SPH


Again what i like about SPH is that it is trading at 52 week high. Hopefully we can see it making new highs.No major news released.

Starhill


This is under the yield bubble stock and will watch it closely. The company will announce its Q3 results on 29 Oct.

STXOSV


This is my new addition this week. The post is here. This stock is pretty volatile and you must have the appetite for it. The Company will announce its Q3 results on 14 Nov. A major fund managed by Och-ziff has been selling out big time from this counter but the good thing is that the selling has been pretty well absorbed. OZ Funds now hold about 11.92% and i believe they will continue to sell down their shareholding. OZ Master Fund is a hedge fund, something similar to my Ninja Master Fund :-P 

The stock will not move up until they are completely out of the picture, so i think you will have time to buy this company slow although i can't remember why they are selling out of STXOSV. Perhaps some readers can enlighten me.

Suntec REIT


I like what i am seeing :) The Company will release its Q3 results on 25 Oct 2012.

UMS


The Company recently went "X-dividend" and came under selling pressure. I hope the correction in the US tech sector will not affect this counter badly. No major news released.

Happy SRSing and drop me investment ideas if you have any. The key criteria will be:

  • Fundamentally sound.
  • Annualized yield of at least 5%.
  • Long term holding.
  • Preferably with decent valuations.
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