Portfolio Summary June 2009

A down month for most portfolios, with growth concerns over China, Japan's slowing recovery, and a slower than expected recovery in the United States contributing to dropping indexes. Another point of note was Spain's credit rating which was put under review.

Well on a lighter note, world cup has been keeping me (and everyone else) up. So I wish to apologize for the lack of updates, as juggling world cup, work and sleep isn't a very fun thing to do.

Among my holdings the only news that was announced was for these following companies.

Novo Group - Results

Novo Group's results were released on the 21st of June. The results were disappointing with 4Q revenue decreasing over last year. Recall that the 4Q last year was from the period from Mar to Jun 09 where the global economy was just recovering, and economies in North East Asia being in their recovery phase.

Novo attributed the decrease to a slower growth rate in China and a rein in property development in china, decreasing the demand in steel. Steel has seen excess supply especially for those needed in construction of infrastructure. However, cold rolled steel for the manufacturing of appliances is still in demand. However, with credit reigned in in China, and excess supply in India seems to depress demand and pricing for steel.

I am looking to unload Novo in the near future, with steel pricing forecasted to not pick up before 2012.

The dividend payable for the year is at 0.5 cents per share.

YRC Worldwide - Asset Sale

YRC Worldwide has sold off its logisitics arm to Austin Ventures for $37 million. A quick calculation of the debt remaining after exhausting their loan capacity and repayment of trade payables and loans totalled about 93 million for 2010.

YRC Worldwide needs to generate a positive EBITDA, as well as positive cash flow to ensure liquidity does not dry up. The operational statistics seem to be bottoming out, and the next release of results will be crucial in determining it. The most important thing in the trucking industry is that while there is still excess capacity, the price wars are over and most trucking firms are aiming to reduce capacity.

China Star Entertainment - Bonus Issue

China Star Entertainment issued 1 bonus warrant for every 4 shares held. I made a mistake previously, as I commented that the warrants will be sold off. In fact, my broker has informed me that my warrants are held in my account already, and I had to incur a charge of SGD9.21. I am travelling to Macau and Hong Kong in August, and hopefully I'll have the chance to either meet the management, and visit their hotel in Macau.

Portfolio Summary May 2010

Depends on how you look at it, this month proved either hard to stomach for investors, or provided a good buying opportunity. For me, I saw this month as a buying opportunity as I deployed my remaining cash. I still have the ability to use other cash that I have saved up but have not factored into the cost.

Over the month of May, the S&P500 shed about 100 points off its value (8.4%). The same stories arose this month, with debt being the main focus. This week however, renewed doubt over the recovery, with private hiring not up in the US.

Doubts over China's growth also took place in May, with a slowdown in the manufacturing sector reported.

My porfolio took a hit last month, and as of the end of May, I am 2.9% in the red.

First Resources

No news was reported for First Resources this month. Dividends was received on the 18th of May 2010 for Year End 2009

China Telecom

At the AGM, all motions were duly passed. This includes a HKD0.085 dividend per share to be issued on the 30th of June 2010

Novo Group

Novo disposed of its downstream subsidiary to its partner. The disposal is not expected to have any material impact on its results.

The reason given is as follows,

"In view that the definitive terms and conditions imposed bythe relevant authorities are more stringent than the original understandings of the Company, inparticular, in respect of the investment commitment requirements, the Company has decidednot to participate in the Project at this stage... JV Partner has already signed a legal binding MOU with the Group, offering a first right of refusal to subscribe for up to 60% of the equity in the investment holding company controlled by the JV Partner that will be undertaking the Project."

In my opinion, this is a step back for the company. Firstly, it has underestimated the problems that it may encounter when setting up a subsidiary in China. Next, in my opinion, it is a blow to the company that it has failed to expand its downstream operations.

However, as the project has not started, and as such is not expected to have any material impact, I would still be interested to see where Novo Group heads.

Soilbuild

Soilbuild announced its 1Q2010 results this month. Although sales were down, due to a decrease in revenue from property development, rental income increased by 40% year on year. This is positive for the company as it strives to achieve its 40million revenue from rental income.

NAV increased by 5 cents to 1.29, in spite of an increase in number of shares (1,516,000) due to exercise of warrants.

China Star Entertainment

A bonus issue of warrants is slated to be done, pending shareholder approval. The subscription price is HKD0.193. For foreign shareholders, the warrants will be sold at the first possible opportunity, and the proceeds will be credited to the shareholder account

Courage Marine

I purchased Courage Marine at SGD0.185 on the 22nd of May. I previously looked at the Shipping sector, and as the turnaround in container shipping is expected, the dry bulk shipping sector would typically be correlated to the turnaround in container shipping, albeit a little slower.

Courage Marine has a very strong balance sheet, and by purchasing 2nd hand ships, they would obtain a higher return on investment. The fact that Courage charters out ships typically using spot prices, means it would gain the full benefit on the turnaround of container shipping.

Its revenue has increased not only year on year, but also quarter on quarter, and gross margins have been improving. This points to a possible turnaround in shipping.

I did not over BGEM and YRCW, as I am still in the process of redoing my portfolio.

Portfolio Review Apr 2010

For the month of April, the news came fast and furious.

Internationally, Goldman Sachs, Greece along with the rest of the PIGS, and the volcanic ash cloud from Iceland which shut down European airspace were the main focus of this month.

News that Goldman Sachs was facing a criminal probe into its activities with regard to mortgage transactions sent the stock spiralling, losing approximately US$30 (17%) off each share since the news broke. The essence of the story was that Goldman Sachs is accused of failing to notify the investors that Paulson and Co, a hedge fund, helped select mortgages for one of its products, and then bet against it. Paulson and Co has been absolved of any blame in this case. The story is still unravelling. More can be read here.

Greece once again took the focus of investors worldwide, with protests going on in Greece as the unions are against the austerity measures that the government has to introduce in order to receive a bailout from the EU and IMF. The failure of Greece to obtain the bailout has resulted in its debt being downgraded to junk bond status by S&P. In the same day, Spain's debt was downgraded, although not to junk bond status. It was also reported that Spain's unemployment had hit 20%, putting it in the same league as Latvia.

Many jokes were spun about Iceland's volcanic ash eruption. The first country to suffer from the financial crisis in Europe, it yet again became another starter of events. This time, the volcano (don't ask me what's its name, I'm pretty sure even Icelanders are unable to spell it right) spewed ash, forcing a shutdown of European airspace, causing a disaster to airlines worldwide, leaving many stranded. The shutdown of the airspace racked up losses for airlines. The full extent however, is still unable to be determined, as airlines and governments are negotiating on any compensation available.

Locally, news that grabbed the headlines was the opening of the circle line from Tai Seng to Dhoby Ghaut. Although it has not affected me, the feedback thus far was that it has managed to cut short journey times. As the government tries to move away from long distance bus, it would have an effect on SMRT as well as SBS Transit as publicly traded companies.

Housing prices has continued rising (making me look like a fool in the process), and there seems to be no end, with many property owners near the Circle Line trying to cash in on the current property market boom in tandem with the opening of the Circle Line itself.

My portfolio took a huge hit, dropping 2% from the month before. In addition, I sold Transpac Industrial Holdings in order to remain partially in cash, and to take advantage before the dividends were paid out.

First Resources

First Resources had its AGM on the 28th of April. It was my first ever AGM and it was interesting hearing the management comments. Of course there were questions that were posed that seemed out of management control.

The CEO and I had a chat, and he put it across to us that the company's growth, even if they did not have any new plantings or acquisitions, would still be robust. Greenpeace allegations that Golden Agri faced were also a topic. He confidently said that Greenpeace was definitely an issue with plantations, and the main way to resolve it was to talk to them, which in the case of First Resources, they had an open door policy with Greenpeace.

Hearing that was good that the management avoided saying that they would never face the situation, but instead said about what they would do if it happened.

China Telecom

China Telecom reported 1Q results, with net profit down 9% on increased 3G spending. Sales however, rose 3.6%. The results meant analysts expectations. The stock however, has took a tumble over the past two weeks due to broad market factors, as well as it China telecom companies rotational play. However, the story behind China Telecom is still intact, as it added 9.36million subscribers in 1Q, compared to 4.93million subscribers the year before.

Novo Group

Little news came out of Novo Group, besides the selling of the remaining 10million treasury shares. There are no treasury shares remaining in Novo after the sale.

Blue Gem Enterprise

Blue Gem Enterprise has expanded into the Refrigerated Direct Store Delivery Division, and thus is able to diversify into the distribution of dairy products on top of beverages. More news can be found here.

Soilbuild

Soilbuild announce that it has won an industrial site bid at Yishun Ave 6 for $29.3million. It is slated to be for SMEs and supporting businesses of MNCs in Singapore. At the EGM, it also approved of the 2 for 1 stock split on the 25th of May.

YRC Worldwide

YRC results are slated to be at 930ET today. Just before the end of the month, YRC Worldwide's stocks dropped like a rock, without any reasons. More can be found here. However, I did not add to my positions, preferring to remain in cash to explore other opportunities, as well as waiting for the results announcement before deciding.

Portfolio Review

In the month of March, many indexes rallied, hitting new highs. One surprising thing that I noted over the releases in March is that the British economy is recovering very well, posting strong manufacturing data. However, there was still debt fears over Greece, and US and China are still at loggerheads over the failure of China to revalue its currency.

In Singapore, property prices soared yet again (looks like that has been the story for the past months). HDB prices rose 2.7% over the first 3 months compared to the 3 months before that. Private home prices are also through the roof, breaking its 2007 high by 6% for non landed private homes and landed homes are 15.6% ahead. More interestingly, private home prices are above their 1996 peak, meaning that home prices are their highest ever.

I am still neutral, tending to the underweight side on residential property. I do not think that high prices are here to stay because

1. Government restrictions on new foreigners in Singapore will not increase the demand of property
2. The effect of the IR is still unclear, with reports of it being frequented more by foreign workers instead of gamblers
3. The government has been releasing land for developers to bid, in an attempt to increase the supply of housing

My portfolio recovered in the month of March from the 0% returns posted to date in February.

Transpac

The dividend ex date was announced to be 3rd May, and upon announcement, the share price went up by 10cents, factoring in the dividend payout

First Resources

Company results were announced on 1st March, and can be found here.

Industry wide, Nestle has announced that it will not source palm oil from Sinar Mas Group in a victory for Greenpeace. Sinar Mas Group has been accused of deforesting while carrying out of its agricultural activities. Nestle has sourced from Sinar Mas only for its Indonesian businesses, and has announced that it will change suppliers. This is good for the industry as it seeks to produce palm oil while reducing damage to the environment. It also gives other companies in the industry to attract new customers.

Palm oil prices are well supported by energy prices, says James Fry, as the agri business and the energy business becomes more intertwined. The article can be found here.

China Telecom

China Telecom FY2009 results were announced, and the results were positive. The news article can be found here. As for the detailed analysis, it will be out before the end of April, hopefully by the end of next week.

Novo Group

Novo Group released its 3Q results, achieving tremendous improvement. It has also started preparing for its scrap metal business, which is scheduled to come online is 2011. The analysis can be found here. Operating Profit was up by 186%, and Net Profit up by 816% for 9M2010 as compared to 9M2009.

I am looking forward to Novo to increase the long term debt of the company as an indicator of expansion plans.

Blue Gem

Products have gone on sale at more Walgreens stores in Florida. I am looking forward to the release of the financial statements

Soilbuild

Soilbuild announced that the stock split has been approved in principle, in an attempt to increase liquidity. Many shareholders have been converting their warrants in an anticipation of the 6cents dividend payout, with the ex date on 7th May

YRC Worldwide

YRC Worldwide has announced that shipping trends over the 1st quarter has shown signs of improvement, and that its customers have been returning. I look for its cost cutting targets to be hit by mid year.

YRC Worldwide's independent auditors have announced that it has doubts on YRC Worldwide's ability to act as a going concern. It has seeked a court ruling to prevent a 20 million bond payment to its bondholders who did not agree to the debt to equity swap back in December. It has said that should the court ruling be approved, the 20million will be used to help its recovery thus far.

Prospective Companies

I am looking at several companies who have large land on their balance sheet. Furthermore, I am looking at Palm Inc as another turnaround play. Should there be a prospect for investment, I will do a writeup.

I am very busy for the next week, so apologies if there isn't much update for the next week.

Portfolio Review

For the month of Feb, my portfolio took a slight hit to end 0.1% in the negative. Over this month, I've added 3 companies to my portfolio: Novo Group, Blue Gem Enterprise and Soilbuild. The analysis and writeup of Novo Group and Soilbuild were covered earlier. For Blue Gem Enterprise, it is a speculative play. It's a young startup in America that is involved in the distribution of food and beverages. It's located in South Florida.

Here is my portfolio at the end of the month

Transpac

Transpac released its FY2009 results on the 24th of Feb. NAV/share dropped from SGD2.55/share to SGD1.81/share. However, this was due to the number of shares outstanding. NAV increased from 349million from 256million. Cash for the Group was at 164million at Year End. Bank Loans were fully repaid over the past year. Dividend announced was 10cents/share.

First Resources

First Resources announced its results today. Sales volume were up, but revenue down due to lower comparable palm oil prices. An analysis of the results will be done within this week. Dividend announced was 1.18cents/share.

China Telecom

It was reported today (Mar 1st) that China Telecom is in talks over taking over PCCW. PCCW was previously subjected to a failed takeover bid by China Unicom.

China Telecom released news on subscriber data for the month of January, with its total subscribers to its CDMA network amounted to 59.1million. Its fixed line network of users shrank 1.9million to 187million, while its broadband network saw an increase of 790,000 to reach 54.25million subscribers.

Deutsche Bank raised China Telecom to a buy, with a price target of HKD4.60/share. China Telecom should be reporting its results in March

Novo Group

Only noteworthy news was that Novo Group appointed CIMB Securities as its sponsor for its listing on SEHK. The news was released today.

Soilbuild

Soilbuild's full year financial performance was covered in the Soilbuild post earlier. Soilbuild intends to build its rental income to 40million. Its regular dividends is based on rental income while special dividends is based on sale of development properties. Dividend payout was 6cents/share.

Portfolio Review

January has been a yoyo month, and I am guilty of being greedy. Below is my current holdings.


My portfolio cost and market value has increased because I decided to add in the cash that I decide to use for investment into the equation. As such, the percentage gain has been reduced.

Over the month, I increased my average price of First Resources to 1.05 cents (rounded up), while i divested my holdings in Bank of America. The reasons for divesting Bank of America was covered in an earlier blog post.

Palm Oil prices are recovering, albeit at a slower pace due to soybean having a bumper harvest. However, I am still bullish about the palm oil sector with the demand for biofuels increasing.

I am looking at several companies, among which is Novo Group. However, as I am unsure about the future prospects of steel, as well as the company's management, I would need to carry out more research on it.

Portfolio Review

I have started investing since Nov 09, and this is my first update. Over the past 2 months, I have bought 4 shares. Transpac, First Resources, Bank of America and China Telecom. Below is the performance of the shares over the past 2 months.

I made a 1.5% gain over the past 2 months, which to me is relatively average but it's always better than being in the red. I have confidence in First Resources' Management as well as CPO, and I will look to increase my holdings in that in the next year. I will not be rearranging my portfolio for the next month, but I will look to increase my current holdings, and look towards a network service provider.