Monday, April 14, 2014

A look at OKP

OKP is one of the worst performers in my portfolio currently. Just what exactly happened to the stock over the past year? I took a look at its recent annual report to find out.

In terms of top line performance, things doesn't look that bad. Revenue had in fact grown by about 20% to $128m. But as we look closer at its profit, we realise that its profit margin has shrunk close to 250% from 17.4% to 6.9%. Gross profit is but $12.5m, down from $23m a year ago. EPS is down to 1.6c from 4c previously. DPS is down to 0.3c from 1.5c. 

In terms of overall balance sheet, I think the company is still fundamentally sound with a debt to equity ratio of about 2.8%. It's still net cash if we look at its cash holdings. Hence on the whole I'm not too bothered by its overall financial status. 

I think the doldrums that OKP is currently in is mainly due to the rising manpower costs eroding a large part of their margins. This is further worsened by the large order books that the company has previously committed. Moving forward, it would hopefully get better as they are able to factor in the increased cost into their new contracts. 

Will I buy more to average down? Maybe. Since the stock is currently trading at close to its NAV of 30c per share. I'm not totally satisfied by its meagre dividend yield of about 1% currently. I will likely monitor for awhile before deciding on whether to add more to my existing holdings.

Monday, February 24, 2014

Dividends in April - June 2014

CMA - $0.0175/share - $87 (16 May)
Capitaland - $0.08/share - $240 (16 May)
CSE Global - $0.03/share - $450 (20 May)
ST Engineering - $0.12/share - $360 (20 May)
Sheng Siong - $0.014/share - $70 (23 May)
OKP - $0.003/share - $30 (27 May)
Kingsmen - $0.025/share - $375 (30 May)
Riverstone - $0.174/share - $87 (tbc)
AIT - tbc

Total - $1699

Recent Stock Actions: Hour Glass

Recently just initiated a small position in Hour Glass. I have been looking at Hour Glass for a long time but could never find the right time to enter. Hour Glass has good management that knows what they are doing. Some points regarding the stock below.

  • Consistent earnings growth over last 5 years with a slight slowdown in 2013
  • Dividend yield of about 3.5% at payout ratio of about 25%
  • Capable management with long track record
  • Increase in debt / equity ratio to 12.5% in FY13
  • Uncertain global economy may hit luxury segment

Friday, December 27, 2013

Recent Stock Actions: Frasers Centrepoint Trust

I just initiated a position in FCT. The reit has been a stable performer over the past few years since it was listed. I like it for its suburban retail malls that should be relatively resilient should the economy decline. The reit is currently valued at close to its NAV of $1.77. Just a quick summary of some of the key points regarding the purchase below.

Key Points

  • Valued at its NAV of $1.77.
  • Dividend yield of approximately 6%.
  • Potential growth of the North region in the coming years (Northpoint and Causeway Point as beneficiaries).
  • Gearing of 27.6% with some debt headroom for growth.
  • High occupancy across malls in portfolio.

Update: In line with my strategy to buy on dips, I have added on to my holdings in FCT on 3 Feb. 

Monday, December 23, 2013

Review of 2013

It is the time of the year again to do a review of the past year. I would think that this is a year of consolidation for me. My wife and I bought an EC in end 2012, and many of the financial transactions in 2013 have to do with initiating payments for the house. With most of the initial payments settled, 2013 has mainly been about consolidating my investment portfolio and finances.

I did not actually add to my investment portfolio as much as I would have liked in 2013. Simply because I did not see as many good buying opportunities as I hoped for. I added on to a couple of my dividend yielding counters, as well as initiated positions in CSE Global, SATS and Sheng Siong. Portfolio worth was up about 28% at $125k from $97k last year. Dividend was up about 24% to $4k+ from $3k+. I am currently about 60% invested. Dividend yield on cost is about 4.3% and yield on worth is about 3.6%. No sales transactions were done in the year.

In terms of company performance, with the glaring exception of OKP, most of my counters did reasonably well. Unfortunately, OKP has been badly hit by the recent manpower measures with increasing costs hurting profit margins. OKP remains fundamentally sound, with a strong balance sheet. I will monitor the counter to see if it is worthwhile to average down in the coming year.

Moving into 2014, the global economic landscape remains uncertain with the bubblish property sector something to watch out for. My overall investment strategy remains largely the same. I will continue building my portfolio with a focus on improving dividend yields. Barring any drastic changes to the investment landscape, I will continue to slowly buy on dips to deploy my war chest. I may also deploy CPF funds to build up my unit trusts portfolio if we see a substantial correction in the financial markets. Here's to a good 2014 ahead!

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