My 4 Key Positions for 2018 and Their Expected Outlook
$ThaiBev(Y92.SI)

With the recent acquisition of Sabeco, gearing would shoot up from 30% to 120%
This looks similar to their strategy with the FNN buyout half a decade ago

The new entity will be restructured and cash flow is milked to pay off the debt in the years to come.

As 2017 earnings was weak due to the thai king mourning, 2018 should show explosive grown in
sales and revenues.. however with the much increased leverage the debt cost, this could drag down the reported earnings... 2018 earnings may end up flattish or inching up a bit.
I believe dividend payout would continue its uptrend.

over the longer run I expect 3% yield along with 5-10% earnings growth in the decade to come, if everything goes well... by 2020 we could see their vision of becoming an international beverage player come true.

$SingTel(Z74.SI)

4th telco will be coming into play sending price war to its climax, however the digital business is showing signs of a turnaround and management has guided for single digit ebita growths for the overall biz.

With a mix of positives and negatives I think reported earnings would remain flattish for 2018.
I expect their over decade long dividend track record to be maintained.. really nothing exciting... just here for the 5% yield
https://www.singtel.com/about-Us/investor-...

$ComfortDelGro(C52.SI)

With the acquisition of LCR and integration with Uber, cost is likely to shoot up and be a drag in 2018 earnings... I expect earnings to remain weak but should bottom out in the 1st half of 2018.
After which I expect a conservative long term earnings growth of 3% mainly coming from the rail and bus segment.

A slow grower with a 5% yield, also nothing much to be excited about.

$Sheng Siong(OV8.SI)

They currently have 43 stores in singapore with an ultimate target of 50 stores for the long term. I expect SS to reach 50 stores by end of 2019, after which they would need their china expansion to do well to continue seeing earnings growth... the china segment is challenging and could be riskier but very rewarding.

2017 was a disappointment to some investors as dividends was slightly reduced and the stock price remained stagnant, I saw this as an opportunity as I believe retaining more cash for expansion is more positive for its long term growth.

4% yield with a 5-10% earnings growth expected in the next 2 years, I am pretty excited with this position. Will take a deeper look at the company again after 2019 to see if they have matured or if they are able to expand beyond singapore to become an international player.

Cheers

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44 likes 26 comments
PomeloFarmer

nomura report on $ThaiBev(Y92.SI)
A very detailed read on the new deals and whats ahead for 2018 to 2020
a must read for all those vested or wanting to vest
cheers

Dynamicinvesting

Reply to @RetiredYoungMan : Thanks.
How did you get this ?

PomeloFarmer

STI like touching 3600 level soon omg omg omg

PomeloFarmer

singtel seems forever stuck at 3.60 port lol, even bull market cannot move

PomeloFarmer

no 2.50 no take profits ^_^

PomeloFarmer

CDG dividends should be at least 10 cents
so at 4% yield level we should expect a TP of 2.50 at least

garch

Reply to @RetiredOldMan : Thank you. This reminded me not to have itchy fingers

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PomeloFarmer

ST SS TB I still feel the price havent run up yet

PomeloFarmer

if CDG goes to 2.40 or 2.50 level I might sell 5,000 and keep 15,000 for long term cheers

PomeloFarmer

CDG huat liao la, vested 20,000 shares ^_^
average cost near 2.00 level

Snorlax

Reply to @RetiredOldMan : If can’t go, at least collect divvy, provided divvy dun tio slash. Yield of 5+% is worth to buy considering the FA.

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PomeloFarmer

added more $ThaiBev(Y92.SI) and $Sheng Siong(OV8.SI) today
70,000 and 60,000 total now
target 80,000 by year end if can

CoryLogics

CDG earning depends highly on Oil Price. Now more than 60 ...

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Recommended & Related Posts

Understanding and analyzing growth stocks

I previously mentioned my love for good growth stocks and the key points were

- easy to understand biz
- track record of growth
- high ROE
- net cash position

This post will take the few points into details

Easy to understand business

If you do not know how the company makes money, dont buy it! Example a company like noble is a super black box, how do they make money trading commodities?

Start from easy to understand businesses that you face in your daily lives. Shopping for groceries? $Sheng Siong(OV8.SI) Taking mrt or taxi? $ComfortDelGro(C52.SI) using a property agent? Using a job agent? Etc

Track record of growth

So what is growth, it simply means doing more each year than before, i usually like to look at over 10 years data to make sure its not a cyclical

A cyclical is one that will show a big decline during down cycle, example marine, during the oil crisis orders were cancel and new orders were none, ship yards when idle

Sheng siong - how many stores it had before and how many new stores opening

Banks - loan growth, how much loan done as compared to previous year. AUM - asset under management. For our big 3 banks, earnings can decline 10-20% during down turns, but book value per shares has grown every year for past decade

Propnex - how many agents, more agents this year? % percentage of trancation volume for hdb/private? Earnings can be volatile as property market is cyclical, however the key data i want to know is how much % of the pie are they taking and if they further strengtening their leader ship position

CDG - number of total taxi fleet? Train total ridership?

Hrnet - total number of agents? Total number of jobs matches per year?

Why High ROE?

A normal company with 10% roe can use $3 to generate 30 cents of returns
If it retains 100% of earnings
Next year its $3.30 of equity can generate 33 cents of earnings

A high roe company with 30% roe can use $1 to generate 30 cents of returns
If it retains 100% of earnings
Next year its 1.30 equity can generate 39 cents of earnings!

Net cash position - cash generative

Generally good growth stocks generate a lot of cash and their business are very asset light

Cyclical stocks tend to be very asset heavy

Example a manufacturing company originally has one factory, to double up it has to open a second factory of the same size. Same for a marine company building rigs, to grow they have to build more ship yards.

Example propnex grows by hiring more agents, if the agents makes a deal propnex gets a cut of the commission fees.

Sheng siong grows by bidding and opening new stores, they pay a minimal sum to outfit the store and they stock it up with groceries and they are good to go. Upfront they do not pay anything to their suppliers, after the goods are sold then they pay the suppliers typically 30-60 days later so SS is very asset light, they basically are just renting a place to turnover those grocceries

So thats about it, just a rough outline about what i look for when picking growth stocks for my details please read up on my full analysis on how i analyzed and picked these stocks

In the long run growth stocks always out perform dividend stocks, you buy a good reit or a good telco you are mostly looking at like 6+2 for 8% returns, 6% dividends and 2% growth in dpu/nav due to inflation

But when you pick the right growth stock you returns can be very high if earnings growth 10% or even 20% a year, typically as earnings increase the stock price increases equally

Example a 1.00 growth stock at PE 20 for 5 cents earnings
If earnings go up by 20% to 6 cents, at PE 20 this stock could be worth 1.20, up 20%!

However on the flip side is that dividend stocks are lower risk thus lower returns

Growth stocks are higher risk for sure, if growth came in zero or negative it can be sold down sharply... like how thaibev fell 40% from 1.00 to 0.60 when its earnings disappointed

Cheers

Read more

Understanding and analyzing growth stocks

I previously mentioned my love for good growth stocks and the key points were

- easy to understand biz
- track record of growth
- high ROE
- net cash position

This post will take the few points into details

Easy to understand business

If you do not know how the company makes money, dont buy it! Example a company like noble is a super black box, how do they make money trading commodities?

Start from easy to understand businesses that you face in your daily lives. Shopping for groceries? $Sheng Siong(OV8.SI) Taking mrt or taxi? $ComfortDelGro(C52.SI) using a property agent? Using a job agent? Etc

Track record of growth

So what is growth, it simply means doing more each year than before, i usually like to look at over 10 years data to make sure its not a cyclical

A cyclical is one that will show a big decline during down cycle, example marine, during the oil crisis orders were cancel and new orders were none, ship yards when idle

Sheng siong - how many stores it had before and how many new stores opening

Banks - loan growth, how much loan done as compared to previous year. AUM - asset under management. For our big 3 banks, earnings can decline 10-20% during down turns, but book value per shares has grown every year for past decade

Propnex - how many agents, more agents this year? % percentage of trancation volume for hdb/private? Earnings can be volatile as property market is cyclical, however the key data i want to know is how much % of the pie are they taking and if they further strengtening their leader ship position

CDG - number of total taxi fleet? Train total ridership?

Hrnet - total number of agents? Total number of jobs matches per year?

Why High ROE?

A normal company with 10% roe can use $3 to generate 30 cents of returns
If it retains 100% of earnings
Next year its $3.30 of equity can generate 33 cents of earnings

A high roe company with 30% roe can use $1 to generate 30 cents of returns
If it retains 100% of earnings
Next year its 1.30 equity can generate 39 cents of earnings!

Net cash position - cash generative

Generally good growth stocks generate a lot of cash and their business are very asset light

Cyclical stocks tend to be very asset heavy

Example a manufacturing company originally has one factory, to double up it has to open a second factory of the same size. Same for a marine company building rigs, to grow they have to build more ship yards.

Example propnex grows by hiring more agents, if the agents makes a deal propnex gets a cut of the commission fees.

Sheng siong grows by bidding and opening new stores, they pay a minimal sum to outfit the store and they stock it up with groceries and they are good to go. Upfront they do not pay anything to their suppliers, after the goods are sold then they pay the suppliers typically 30-60 days later so SS is very asset light, they basically are just renting a place to turnover those grocceries

So thats about it, just a rough outline about what i look for when picking growth stocks for my details please read up on my full analysis on how i analyzed and picked these stocks

In the long run growth stocks always out perform dividend stocks, you buy a good reit or a good telco you are mostly looking at like 6+2 for 8% returns, 6% dividends and 2% growth in dpu/nav due to inflation

But when you pick the right growth stock you returns can be very high if earnings growth 10% or even 20% a year, typically as earnings increase the stock price increases equally

Example a 1.00 growth stock at PE 20 for 5 cents earnings
If earnings go up by 20% to 6 cents, at PE 20 this stock could be worth 1.20, up 20%!

However on the flip side is that dividend stocks are lower risk thus lower returns

Growth stocks are higher risk for sure, if growth came in zero or negative it can be sold down sharply... like how thaibev fell 40% from 1.00 to 0.60 when its earnings disappointed

Cheers

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Investing actully can be simple, straightforward and in fact very boring!

I have been doing the same thing over and over again for the past 12 years. In 2009 i did my analysis on challenger and it became a 5 bagger, in the article below i shared how i analyzed it and why i bought it.

- within circle of competence
- easy to understand business model
- proven track record of growth and earnings
- high ROE
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A decade later i am still doing the same analysis on new companies, applying the same methods i learnt from reading peter lynch and warren buffett books

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I have made over 15% average annual returns over the past 12 years and i see no reasons to change my methods or strategy, just plain old value investing till i become an old man

In the bear market it would shake you up with fear, but stay calm and continue to do what you have always done so successfully.

If what you did in the past was not successful, then its time to wake up and start all over again with an open mind, read more books and find that method that really suits you.

https://www.nextinsight.net/story-archive-...

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Top 6 stocks in my portfolio
These 6 positions make up about 400k out of 500k+ of my portfolio

Blue chips
$ThaiBev(Y92.SI)
$OCBC Bank(O39.SI)
$JMH USD(J36.SI)

Small caps
$PropNex(OYY.SI)
$HRnetGroup(CHZ.SI)
$Sheng Siong(OV8.SI)

- focus more on growth stocks
- have zero reits
- have zero telcos
- 100% vested no more cash
- cash inflow to purchase more ocbc or jmh

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Top 6 stocks in my portfolio
These 6 positions make up about 400k out of 500k+ of my portfolio

Blue chips
$ThaiBev(Y92.SI)
$OCBC Bank(O39.SI)
$JMH USD(J36.SI)

Small caps
$PropNex(OYY.SI)
$HRnetGroup(CHZ.SI)
$Sheng Siong(OV8.SI)

- focus more on growth stocks
- have zero reits
- have zero telcos
- 100% vested no more cash
- cash inflow to purchase more ocbc or jmh

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