Mid-August 2007 Portfolio Review

The market has been turbulent these past 2 weeks and opened up many opportunities for finding companies which are being undervalued according to Mr. Market’s manic-depressive mood swings. Some say it might be contrarian to actually feel happy when the market is crashing down, while others lament their hard-earned money going down the drain. However, I believe in buying to keep for a long time and thus my main business is purchasing, not selling. Purchasers always look for the lowest possible prices, and I am no different. Suffice to say that these last two weeks have made me very happy indeed as it has given me the opportunity to hunt for good bargains. I am commencing my research into one or two companies now and will post my findings once I am done.

Below is a summary and rundown of my investments and related news as at August 15, 2007 (STI at 3,273.25 points):-

1) Ezra - Buy Price $1.30 (bonus adjusted), Market Price $5.50, gain 323.1%. On August 7, 2007, Ezra announced a milestone contract for Lewek Champion, their maiden pipelay and accommodation barge. Recall that Lewek Champion was also chartered out to ConocoPhillips for another job which will end in FY 2008. Thus, this contract can ensure earnings flow till FY 2010, though the value of the contract(s) were not stated. On August 9, 2007, Ezra received in-principle approval for their bonus issue, which paved the way for them to declare an EGM to be held on August 29, 2007 to address the issue of share re-purchase, bonus of 1-for-1 and the sale of 43% of EOC. I have since received the circular for the EGM and will do a posting on it soon. I also intend to attend the EGM to probe for more answers to some nagging questions.

2) Boustead - Buy Price $1.295 (average), Market Price $2.07, gain 59.8%. On August 10, 2007, Boustead Projects announced another design, build and lease contract for a logistics facility for Panalpina Worldwide. The contract value was not stated but this is the 6th contract win for Boustead Projects this year, augmenting their order book strongly and giving the division a good start to FY 2008. Also immediately on August 13, 2007, Boustead also secured oil and gas engineering contracts worth S$26 million.

3) Swiber - Buy Price $1.01, Market Price $2.77, gain 174.3%. On August 6, 2007, the company announced the acquisition of North Shipyard Pte Ltd for S$10.3 million in order to vertically integrate their operations. This acquisition would be funded through internal resources. Subsequently, they reported their 1H 2007 results and saw a 300+% jump in net profits (excluding exceptional gains) as well as rising margins. Moving forward, they are targeting new markets such as India, the Middle East and China to expand into.

4) Global Voice - Buy Price $0.1775 (average), Market Price $0.165, loss 7.0%. GV snared two more contracts in the first two weeks of August 2007 with WuSys and LHV. They also announced a somewhat disappointing set of results yesterday as they were still loss-making. I will be doing a review of GV’s 1H 2007 financials so please stay tuned for that.

5) Suntec REIT - Buy Price $1.11, Market Price $1.84, gain 71.2%. There was no news for Suntec REIT during August 2007.

6) Pacific Andes - Buy Price $0.665 (rights-adjusted), Market Price $0.68, gain 2.26%. PAH released their 1Q 2008 results yesterday and I will be doing a detailed review of the financials as well as operations. Gross margins were up and net profit attributable to shareholders increased by 42%. I intend to add to my position should Mr. Market decide to price this company below 65 cents.

Overall Portfolio

My overall portfolio has increased by 93.3% from cost as at August 15, 2007. The market value of my portfolio is around S$85.7K. The recent sharp market correction has brought prices down to a more decent level, more on par with valuations as compared to when the STI was trading at 3,600+. I can see good opportunities arising from the downturn and will be waiting with sufficient cash to scoop up the bargains once I have completed my research on the companies I am eyeing.

My next portfolio review will be on Friday, August 31st, 2007 after market close and I will also report on Ezra’s EGM.

NOTE: My next post will be on Friday as I will taking a short break from blogging in order to focus on analyzing PAH and GV’s results. Cheers to all investors !

Update: Edited PAH's closing price as pointed out by la papillion. There is no change to my portfolio value or gain as I took the computed figure from my spreadsheet directly. It was just a typo error for PAH's closing price and gain.