In 2012, I have a few large speculative trades in penny stocks like GemsTV, SingXpress Land, New Wave when they were trading under 10cent, some under 1cent. While there were some big profits $1K-2K within few days, there were also similar large losses too.
I spent 4+ hours of digging out my SGX Contract Statements, and keying into the Excel Template (template adapted from Alexander Elder's Spike Trade blog, do visit their website, template & free guide is available for registered users, Free-of-charge).
Feeling a sense of pride, as I finally managed to get myself to be serious enough to compile my trade records.
After reviewing my trades for 2013, I realise the following:
- Lesser penny (less under 10cent, more above 10cents) & Warrant trades
I finally convinced myself the danger of trading the volatility of such speculative counters, after all like what Warren Buffett often says (& I often ignore) somewhere along the line "no ones can predict the price of the days, weeks & months to come; one simply attempt to pay a good price for the value in the company".
- My Dividends save my losses, maybe buying on the premise of ex-dividend rebounds work for certain markets & counters...
- Less play on "market mass psychology", more on value plays
In 2012, some of my bets were on market behaviours such as a company announce large dividend (above 33%) or trading a penny counter's narrow range of say 0.8-0.9cent..
In 2013, notably GP Hotel, Popular and Suntec REIT, were more mostly due to their value & dividend payouts. While some maintain their corporate performances, luck still plays a part, after all no one can confidently says a business could maintain its growth in earnings (eg. Popular which seem to face some challenges in its properties & bookstores businesses).
- If you believe in the "appraisals", then ignore the price & hold on to watch the business play out...
I still have a few counters, they are still under my cost price, but I decided to hold on, believing they will play out fine, if not, hopefully there's still dividends that I could rely on for my returns.
1. Medi-Flex, 30 Dec 13 is the AGM & EGM to vote to approve the buyout by its mother company "Top Glove Sdn. Bhd." at $0.15, since its takeover party already owns 79.91%, I hope there wont be any stupid resistance to block the delisting. An additional bonus is the dividend 0.12cent, which will yield me $324.27, a 2.49 % (or about 7.47% annualised) return on my capital of $12,981.33 (better than fixed deposits).
2. GP Hotels, bought since 4 Jun 13, the stock languish at $0.245 until recently along with the "Santa Claus rally" rise back to $0.26 on 27/12/13's closing, hopefully it will continue to rise during the "January effect".
Otherwise, I am hoping for a dividend at the end of its fiscal year.
This counter is 58.62% owned by its Chairman & Billionaire Koh Wee Meng, and he continued to spend millions almost monthly to buy its stock. If the owner is spending millions buying, whats the worries with my thousands following?
Another foreseeable boost is its new hotel development at 165 & 167 Tyrwhitt Road currently under construction is targeted to open for business in 1H 2014. Upon completion, the new hotel will boost the Group’s hotel portfolio by another 270 mid-tier hotel rooms, a 15% boost to its current 1,738 budget-tier rooms.
Rolling PE: 14.78
P/NAV: 0.65 (35% discount to its NAV)
3. SuntecREIT, with the opening of its phase 1 of Suntec City and first overseas acquisition of 31 storey office building in North Sydney CBD, build & rent by Leighton Group; this REIT is one of the best value among the REITs in the SGX. While there are concerns over rising interest rates, I doubt interest rates will rise beyond the US 30years interest rate of 3.94% in 2014, as FEB's official interest is still near zero, and its roll back of monthly purchase ($85bil. to $75bil.) will take a year at least to full roll back the QE3.
Back to its business, the structuring of North Sydney acquisition also means that the REIT has tied in a constant DPU growth over the next few years and fully funded by loan, there is little need of cash call in the near future.
Lastly with its quarterly distribution of about 6.1% DPU, one should be able to comfortably hold on to it for foreseeable future.
Rolling PE: 8.71
Price/NAV: 0.75 (25% discount to its NAV)
*All ratios above are extracted from Shareinvestor.com.