Was searching for the latest statements for SembMarine and spotted the error in their investor relations page. 2007 instead of 2008. But we digress..this is not impt
See below: Net Profit Margin at 9.6% ( Compare with Cosco's 18%!) See below: Current Asset(CA) greater then Current Liabilities(CL)! (while Cosco's CA is lower than CL) See Below: Since Sembmarine's bulk of its business comes from Rigbuilding, we decided to look at the utilization rates (2nd light blue table below) of rigs world wide to try to infer activity which is related with the demand for rigs. Well Well Well..so far so good, no dip in utilization rates (in fact it has increased, slightly, now at 89% vs 87.5% a month ago, hmm even though the price of oil has gone down!).(Actually we are watching CNBC now seeing the price of oil dipping like a dipstick to 76! Cheap Petrol..Yahoo!) Really, SembMarine to SGDividends is So So..not good not bad..not here not there...but it will definitely be out of our watchlist. Its average fundamentally, we think!
Important: The objective of the articles in this blog is to set you thinking about the company before you invest your hard-earned money. Do not invest solely based on this article. Unlike House or Instituitional Analysts who have to maintain relations with corporations due to investment banking relations, generating commissions,e.t.c, SGDividends say things as it is, factually. Unlike Analyst who have to be "uptight" and "cheem", we make it simplified and cheapskate. -The Vigilante Investor, SGDividends Team
We noted the beating of Cosco today. As of now 12.30pm ...trading between a range 0.94 - 0.76.Wow. We noted that DMG gave a sell call of this counter...stating some reasons and more reasons and much more reasons..qualitatively..which is true actually. We noted also BT had a report on it with Credit Suisse saying something about drifting lower.
But, let's take a step back..clear our heads a bit, relax..and think simply, shall we? Let's look at some quantitative figures....
Net Profit Margin: 18.71 % ( Ok still some room to maneurvure if demand sucks or supply sucks, compare again with Ferrochina.!)
Debt repayment ability (sorry we refuse to use jargon, bear with us ok!): CA less than CL. ( Hmm but its not that much of a shortfall. not like Ferrochina!)
Cash Flow Muscle: Pretty strong. As you see its Cash from Operations has been positive since 2003 and guess what..even after netting off capital expenditure ( the expenditure needed to sustain this business..in simplified terms) its still positive! ( Some people call it free cash flow..a jargon we prefer not to use) . This is a good sign!
SGDividends: Why are we wasting our time on this report? Cos here at SGDiviedends, we refuse to take Analysts reports seriously, Credit Suiise, DMG..blah blah blah... Look at the company's numbers first(MOST IMPT)..take care of its downside first..before using reasons like order book, economy slowdown,risk of order cancellation, delivery delays( which are of cos darn impt too) but kinda fluffy dont you think.
Our recommendation: Your Guess is as good as mine? Decide for yourself!
Important: The objective of the articles in this blog is to set you thinking about the company before you invest your hard-earned money. Do not invest solely based on this article. Unlike House or Instituitional Analysts who have to maintain relations with corporations due to investment banking relations, generating commissions,e.t.c, SGDividends say things as it is, factually. Unlike Analyst who have to be "uptight" and "cheem", we make it simplified and cheapskate. -The Vigilante Investor, SGDividends Team
Thanks to zhuangzi (A reader) she did mention a very good point that since REITS are required to give out a bulk of their income as dividends, this results in a low cash position...resulting in REITS generally having low current assets (CA ). See my previous post.
So good ol' "kaypoh" SGDividends decided to comb the SGX REIT Realm and true enough most indeed have their CA lower than their current liabilities CL. But we did find one REIT which balks the trend. Its Fortune Reit. See chart below! Its CA is higher than its CL.
And guess what my friends..who do you think has some shares in it too? (hint hint..the splendid folks who invested in Merill Lynch)
SGDividends : Eh if you buy then something go awry dont blame us ok....we are just stating facts and being unbiased ..pls read up carefully before investing. Steady Bom pi pi boh..
Important: The objective of the articles in this blog is to set you thinking about the company before you invest your hard-earned money. Do not invest solely based on this article. Unlike House or Instituitional Analysts who have to maintain relations with corporations due to investment banking relations, generating commissions,e.t.c, SGDividends say things as it is, factually. Unlike Analyst who have to be "uptight" and "cheem", we make it simplified and cheapskate. -The Vigilante Investor, SGDividends Team
MapleLog (Current Assets lesser than Current Liabilities)
Macarther reit (Current Assets lesser than Current Liabilities) K-reit(Currenct Assets lesser than Current Liabilities)
MPREIT ( This one i dont know why they dont seperate Current from Non Current. Why?Why? Why?Why Reits are faring so badly? Cos its a credit crunch and they need to borrow money and a random pick of some Reits in singapore tells the story. And does anyone know why MPReit doesn't seperate currenct from non current? Hmm
Let's look at Mr YangJiJiang shall we? Let's see if its at the risk of becoming like Sir Ferrochina. ( SGDividends will be using Sir Ferrochina as the benchmark.). So why are we doing this? Cos we are now looking at stocks to put on our radar screen and since we are analysing, why not share it to the world. Fact Facts Facts..thats what SGdividends hanker after...not fluff.
OK. Looking at the above. This company is seems pretty safe in terms of repaying its liabilities. Current Assets: RMB1612,183 VS Current Liabilities: RMB504,321. What's lovely is that it has Cash and its equivalent of RMB852,374. What this means is....it can repay debts which are due within a year easily as it has CURRENT ASSETS more than its CURRENT LIABILITIES. ( Im looking at the 2nd column of the charts above from the right , in case you are looking somewhere else.) In fact using their CASH is enough to pay their CURRENT LIABILITIES already.
Now lets Compare with Sir Ferrochina, shall we? ( This was released when analysts were still issuing buy calls..Lelong ah..they think what..durians ah)
Current Assets : 11,530 VS Current Liabilities 116,790 ( 2nd column from right)See how much they have to repay at the third chart!
Compare and contrast Mr YangJiJiang and Sir Ferrochina....Your Guess is as Good as mine !(The above are the latest financial statements available at this point of time publicly, btw.)
Investing Tip: At such times like this, look at debts of the company..seriously..share value fall never mind...but as long as they dont disappear ...games not over. Take care of the downside!
Important: The objective of the articles in this blog is to set you thinking about the company before you invest your hard-earned money. Do not invest solely based on this article. Unlike House or Instituitional Analysts who have to maintain relations with corporations due to investment banking relations, generating commissions,e.t.c, SGDividends say things as it is, factually. Unlike Analyst who have to be "uptight" and "cheem", we make it simplified and cheapskate. -The Vigilante Investor, SGDividends Team
Given so many people have asked which is the best trading account to have. SGDividends will just say, why not have them all. Seriously, dudes or dudettes.. Opening Stock Trading Accounts is free in Singapore, there is no restriction on how many accounts you can have and no monthly account maintenance fees. And they have their individual strengths and weaknesses.
For SGDividends, we have 3 trading accounts. Citibank Brokerage, DBSV (Online) and POEMS.
Why these 3? See below for the reasons.
Citibank (Dreams neversleeps....Ambition neversleeps) charges the lowest commissions at min of $22 per online trade for local SG shares. The others are min $25. Yes Yes, we know $3 bucks is not much but hey why not, since all local SG shares go to the same custodian CDP account eventually and both takes the same effort to place the trade and if you invest, dollar cost averaging a lot like ..erhem us during this crisis period, it gets quite substantial. SGDividends use this account to buy SG shares for the long term.
DBSVickers Online has no custodian fees for US shares custodised with them. So if you are buying US shares for the long term, this is a good choice, compared to Citibank's minimum $5 semi-annual custody charge and POEM's minimum $2.14 monthly charge per US counter. SGDividends use this account to buy US shares for the long term.
What we like about POEMS is it SBL (Share, Borrowing and Lending )account. SGDividends use this account as a tool for us to predict which shares will be cover shorted, so as to stand ready to scoop them up when they are going down ridiculously.
The Fear Index has shot up again wildly! At a high of 76.94!.(See our previous article on The "Fear" Index)
Some of our readers have asked me, what the heck is this?SGdividends will explain it as simplified as possible and just state the things you need to know.
The "Fear Index" is a guage of investor's confidence. The lower it is in value, the more complacent people are. Notice how the boom years of 2005-2007 are marked by low values.The higher it goes, the more panic there is. Notice it again?
Investing Idea: SGdividends believe that the market cycle bottom will be reached when there starts to be a reversal of this index. Clearly, as of now, its not reached! (See our article on Sectoral Investing).
But, don't wait for the bottom. (See Chua Soon Hock's take on catching the bottom)
It's your money - invest it wisely. Learn, understand and execute.
See the similarities? " Bankers begin to collect loans....unable to collect these loans made banks go bankrupt...causing banks to die off by the hundreds!"However, SGDividends do not believe that this current crisis will be as severe as 1929. Why? Cos people are more educated now, simply.
SGDividends came across this interesting article which we think makes sense. This is written by Chua Soon Hock, who in 1999, participated in an international stock picking competition and beating analysts around the world.
This is what he says. Read, digest and internalise it. It makes perfect sense!
Q: what is the appropriate strategy for retail investors?
A: As a general rule, there are two points to consider. Firstly, the strategy must not rely on having an edge in resources of time, knowledge and finance, as retail investors are weakest in these areas when compared to all other players. Secondly, such a strategy must necessarily be based on the patience to buy shares at basement prices on a non-leveraged basis with minimal transactions over an extended period.
Q: How can retail investors know when shares are at basement prices?
A: Shares will be at basement prices when bearish psychology is extreme and liquidity is tight in the following situations: (SGDividends: See our "Fear Index" below, posted on 09 Oct 2008)
-The asset bubble bursts and strong economy tailspins into a recession like the recent Asian crisis
-The economy goes into a period of stagflation
-The economy in a depression with prevailing banking crisis.
-The market crashes due to special events eg Gulf War, 19 Oct 87 (program trading), LTCM debacle, etc
Q: How do I improve my timing in order to buy shares at basement prices?
A: For situations where share prices are low due to a weaker economic cycle it is best to invest over a six to 12 month period. The initial investment should be 50% of capital, with 10% each subsequently over the intended period for the last 50%. The timing of the initial investment of 50% is crucial.Based on my experience it is best to buy on the day following the national government''s admission that the economy is in a recession and gives a negative GDP forecast for the rest of the year. When this announcement is one that makes the front page of the national daily, then almost all the bad news has been discounted by the market.
For a market crash due to a special event it is normally right to commit 50% of capital on the same day of the event and the rest of the 50% within a week. Special event crash tends to be immediate and furious as institutional and retail investors all unload holdings aggressively yet simultaneously, thereby prices reach bottom very quickly.In the case of a banking crisis, the time to buy is when the government''s plan to use public money to re-capitalize the banks, whether directly or indirectly through tax incentives aimed at the disposal of bad loans, is at the final stage.
Q: What type of shares should one buy?
A: Buy the top two of the best-managed institutions from each of the key sectors of banking, media, telecommunications, healthcare and computer software. These sectors tend to be essential and also have inherent oligopoly power.
Q: Is the investing going to be smooth sailing?
A: Absolutely not, especially at the initial phase of your buying spree. All your good friends including your dear spouse will think that you are crazy. They will say, "The market is getting lower, this is too dangerous, you can wait". And likely, in the next few days or weeks after buying, the market may indeed go lower, and you will look like a fool.But to want to buy at the absolute bottom is not possible. But to buy near the bottom is possible and can be made highly probable by this approach. Be prepared for some short-term psychological torture. But you need to buy. If not, you will watch and miss the opportunity altogether. Somehow in most cases, you will later look like the wisest man in town for having the courage to buy those shares. View it as short term pain, long term gain.
Q: When then should one take profits?
A: For shares bought resulting from a market crash due to special events (ie it is a one-off situation), one can take profits when profits are between 30% to 70% within a six months period.However, for shares bought as a result of an economic crisis or economic downturn one should keep them for years. Liquidation should only begin when the bull market is so obvious and in such a great rage that it sucks in all kinds of new retail players. The greater fool theory, unfortunately, always comes into play near the end of a new bull market cycle. Shares should be disposed gradually over a 24-month period as bull markets normally last much longer than expected.
Q: After taking profits, what should the investor do with the money?
A: Stay in cash until shares are at basement prices again. This strategy implies that when not invested one must hold cash and be patient even if the waiting period is long. In fact, one of the unprofitable "myths" that is frequently encouraged and practiced is that of continued deployment of capital to enhance returns.This approach usually means that when the opportunity comes for acquiring bargain basement shares you will not have the money. Instead you will be among those hurt by lower share prices. Rather, you should build up liquidity for deployment when market liquidity is tightest in order to make big money.
Q: How often can a retail investor reasonably be expected to participate in such an investment strategy?
A: Assuming a 35-year investment life, one can expect to participate in three to four complete economic cycles, with each cycle of about eight to 10 years, yielding returns of at least 100% over capital. With this approach, transaction costs will be at the barest minimum and any disruption to one''s job will be almost non-existent, as the investor will be doing nothing most of the time.
During this period of 35 years, one who is patient and courageous will in addition be rewarded with about five event market crashes, which should yield at least 30% for each event. Therefore this strategy though on a day to day basis does not seem to bear anything, can be very profitable and consistent over the 35 years horizon.Be patient and be prepared, and you will come out tops in the investment arena. If you are not patient and prepared, the stock market will be an expensive place to find out who you are.
Spot any opportunities lately?
Investing idea:If you believe in the article above, your investment of your 50% should be around this time!
Sector Investing philosophy is that different sectors are stronger at different points in the economic cycle. The Market Cycle preceeds the Economic Cycle. (What this means is that, the local Singapore Property Market is going to slump next. The local stock market is the precursor)
Based on the current economic climate, SGDividends see we are 1/2 - 3/4 way towards the bottom (trough) of the market cycle (Red). Utilities counters should fair the best now.
Investing Idea: Based on this philosophy, the following should be the way one invests in this climate:
Now - Mar 09 - Buy Utilities/Infrastructure counters. Eg, CitySpring, Macquarie IIF, SP Ausnet, Singtel,SMRT, Reits
Feb 09 - June 09 - Buy Financial Stocks. Eg, DBS, OCBC, UOB, SGX
June 09 - Sep 09 - Buy Cyclical Stocks . Eg, like SIA, NOL
Sep 09 - Dec 09 - Technology Stocks . Eg, Venture
Dec 09 - Feb 10 - Industrials Stocks . Eg Keppel Corp, Semb Corp, Tat Hong
Feb 10 - June 10 - Basic Industry Stocks. Eg Golden Agri, Wilmar, Indo Agri, Straits Asia
Mar 10 - July 10 - Energy Stock . Eg KS Energy, Keppel Corp, Semb Corp
July 10 - and Beyond - Staples. Eg Sing Food, Raffles Medical
And the cycle goes on again. The dates are based on pure GUT feeling and i have no empirical data to support it. Stocks given are not recommendations but mentioned as they fall within the Sector category. Please take note though that this is an unprecedented crisis and not just a pure play recession and therefore the above might not work. Research smart and hard before investing!
See below: Net Profit Margin at 9.6% ( Compare with Cosco's 18%!)
See below: Current Asset(CA) greater then Current Liabilities(CL)! (while Cosco's CA is lower than CL)
Macarther reit (Current Assets lesser than Current Liabilities)
Why Reits are faring so badly? Cos its a credit crunch and they need to borrow money and a random pick of some Reits in singapore tells the story. And does anyone know why MPReit doesn't seperate currenct from non current? Hmm 
Current Assets : 11,530 VS Current Liabilities 116,790 ( 2nd column from right) See how much they have to repay at the third chart!
This is what he says. Read, digest and internalise it. It makes perfect sense!