Tuesday, January 31, 2012

January 2012 Portfolio Review and Final Post

It is with some bittersweet feeling that I pen this last and final post, along with my portfolio review for January 2012. As mentioned in my previous portfolio review for 2011, heavier work commitments and a desire to spend more time with family and friends has resulted in my decision to stop blogging after this final post. However, please be assured that all historical posts and information will be left intact, so readers can continue to browse and access sections of my blog for information and learning.

For the month of January 2012, I added about $10,200 worth of SIA Engineering to my existing holdings, as I noted that there was quite a vicious and unexplained sell-down on one of the days of the month (I think it was January 13, 2012) which allowed me to comfortably pick up some lots. As a result of this, and interestingly, at the close of my blog today, my portfolio cost has hit the $250,000 mark (it stands at $252,000 to exact). More will be explained in the summary below the corporate summaries section.

Below please find my portfolio as well as corporate summaries for January 2012:-


1) Boustead Holdings Limited – There were a total of four announcements from Boustead for January 2012. Three were minor ones and I will not state them here, but the fourth one, on January 21, 2012, was that of an investment of S$23.3 million to purchase an 8.6% stake in an ASX-listed company called OM Holdings (“OMH”). Boustead will purchase 50 million shares of OMH at a price of A$0.35 per share, representing a discount of about 5.2% to the 30-day volume-weighted average price. The entire subscription will be satisfied in cash and funded by Boustead’s internal cash reserves.

OMH is a company dealing with metals trading which involves the sourcing and distribution of manganese ore products (which are used in the making of steel) and in processing ores into ferro-manganese intermediate products. OMH also operates commercial mining operations spanning Australia, China and Singapore and they are in advanced negotiations to kick-start an ambitious US$502 million smelting plant beside a hydro-electric power station. The rationale for the transaction was for Boustead to carve out a new business segment and to allow the Boustead Group to deploy its project management and engineering expertise to a new industry. Interestingly, Mr. FF Wong was until recently a non-executive director of OMH but had resigned on December 12, 2011.

2) Suntec REIT – On January 19, 2012, Suntec REIT announced its FY 2011 results. A DPU of 2.479 cents/share was declared for 4Q 2011, which was 7% higher year on year and 19.9% higher than forecast. The dividend will be paid on February 28, 2012.

3) MTQ Corporation Limited – There were no announcements from MTQ, other than the scrip dividend allotment of shares.

4) Kingsmen Creatives Holdings Limited – There was no news from Kingsmen Creatives for the month of January 2012. The Company should be releasing its FY 2011 results in late Feb 2012.

5) SIA Engineering Company Limited – SIA Engineering released results on January 31, 2012. Revenue was 12.6% ($33.9 million) higher as compared to the same quarter last year, but operating profit for the quarter decreased 17.7% to $28.4 million due to higher sub-contractor and staff costs. Net profit attributable to shareholders for 3Q 2012 was 5.3% higher compared to last year, and the Cash Flow Statement continues to show healthy OCF of $40.4 million for 3Q, with FCF standing at $65.2 million. However, this was considerably lower than the same period last year ($110.7 million). I guess the probability of a good dividend may be lessened due to the lower cash inflows, but we will have to wait another three months to find out.

6) VICOM Limited – There was no news from VICOM for January 2012. VICOM will be releasing its FY 2011 results on February 9, 2012.

Portfolio Review – January 2012

Realized gains have increased slightly to $69,550 due dividend from Suntec REIT.

For the month of January 2012, the portfolio has increased by +1.1% (using XIRR in MS Excel to compute) against a +9.8% rise in the STI; thus my portfolio performance has severely under-performed the STI by -8.7 percentage points. This was an eye-opener for me in terms of seeing just how damaging a rally can be for my portfolio in terms of relative performance. However, keeping in mind that the principal aim of my investment philosophy is the preservation of capital and to obtain an adequate return, this has been achieved for this month as there was a slight gain on the portfolio, and as far as I can tell, the businesses are still running along fine.

My cost of investment has increased to S$252,800 as a result of a purchase made of shares in SIA Engineering on January 13, 2012 at a price of $3.38 per share (an increase of about $10,200) and unrealized gains stood at +4.3% (Portfolio Market Value of S$263,600). By factoring in a potential cut in dividends of about 20% from 20 cents (full-year) to 16 cents, yield at my purchase price would still be about 4.73% (acceptable for me as it close to current inflation rate of 5.5% which is an elevated rate). Assuming a more drastic cut of 40% to a full-year dividend of 12 cents/share (translating to only a 6 cent final dividend), the yield would be 3.55% at purchase price, which is still decent considering the business model of the company and that the long-term prospects for the airline and MRO industry are positive.

My latest purchase should adjust my projected full-year 2012 dividends to about $13,600 (assuming I accept all future MTQ dividends in CASH, not scrip), which translates to about $1,130 per month).

This being the final post on this blog, I wish to take the opportunity to wish all my faithful readers a very fruitful and successful investment journey, and good luck and good health to your good selves and your families!

Readers who wish to contact me may choose to do so by emailing me at musicwhiz55@gmail.com. Adios!

20 comments:

Singapore Man Of Leisure said...

Aloha Musicwhiz!

I wish you smooth saiiling in both your career and family :)

Singapore Stock Picker said...

Hello,

You enjoy your free time! I'm sure you can blog at least once a year to let us know what you have done to the portfolio as well as to relieve stress!

sgxstockpicker

Temperament said...

Hi MW,
All the best. May you find you have time to blog again. Adios Amigo.
See you again.

Musicwhiz said...

Hi SMOL,

Thank you. Keep in touch!

Musicwhiz

Musicwhiz said...

Hi SGX Stock Picker,

Haha well we'll see how it goes. Already getting very busy with work and family. Glad for the (permanent) break from blogging haha!

Regards,
Musicwhiz

Musicwhiz said...

Hi Temperament,

Thank you for your well-wishes.

All the best to you too.

Regards,
Musicwhiz

Koala said...

I really enjoyed reading your analysis and comments. :) Sad to see you go, but I'm sure it's for the best. All the best with your family and work.

Musicwhiz said...

Hi Koala,

Thanks for your kind words. Appreciate them.

Regards,
Musicwhiz

Lemizeraq said...

Hi Musicwhiz,

Have enjoyed reading your insightful posts and in-depth analysis.

Bought Kingsmen after reading your analysis.

Sad to hear that you will not be able to blog with your commitments.

All the best for your family and career.

The investing public has lost a very talented analyst that puts those in broking houses to shame.

Regards,
Lemizeraq

Vatsa said...

Hi Musicwhiz,

All the best for your future investments.

Many thanks for writing for this many years.

Have a great life.

Cheers

Vathsa

Musicwhiz said...

Hi Lemizeraq,

Hey thanks very much for your comment and also your compliments! Thanks too for your well-wishes.

Kingsmen will be releasing their results on Feb 27, 2012 (Monday). Glad to know that you are now a shareholder. I shall be expecting their usual 2c/share final dividend.

All the best to you too!

Regards,
Musicwhiz

Musicwhiz said...

Hi Vathsa,

You're most welcome. It was an enjoyable journey but now I have other pursuits.

Take care and God Bless.

Regards,
Musicwhiz

M.A. Wind said...

Thanks for your very valuable postings, hope to see you back in the future. Wishing you all the best.

Musicwhiz said...

Hi M.A. Wind,

Thank you very much.

Regards,
Musicwhiz

K.I.S.S. Investor said...

Hi,

Nice blog you have here! I am James, a new blogger at kissinvesting.blogspot.com.

I would like to exchange links with you.

Hope you can email me back at kissinvestor@gmail.com if you are interested :)

Cheers,
James

Musicwhiz said...

Hi KISS investor,

You have a nice blog but since I have stopped posting, I would also not wish to exchange any more links.

Thanks and good luck,

Musicwhiz

Market Strategist said...

Hope to see you back again future.

www.greenworldbvi.com said...

Hi Musicwhiz:

I am British, but I read a ot of investing blogs in Asia and have a business partner in Singapore. Its a shame you stopped. I've read a few of your posts and they have just the right detail for a layperson - good explanations of each stock but not too overwhelming that the reader just quits halfway through. Its a tough balance to keep. Shame you stopped, but its understandable as keeping up a blog with regular posts of high quality is not so easy! Best of luck, Peter
farmland investment

Felix Leong (pipi486) said...

hi musicwhiz,

I have some important things to ask you, may I contact you via email?
if so could u drop me an email at felixleongbaojie@hotmail.com

Best regards,
Felix Leong

stevenhalim87 said...

Good luck with your life :)