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Follow the guru - MrFI2024
https://mrtfi2024.wordpress.com/category/micromech/
Good morning valuebuddies.
Another cold day started and once again, lots of opportunities open up in front of us.
I would like to trace an investment journey of a value investor.
By sharing his thought process in his blog, MrFI2024 had pen down the investment merit (and diverse and re-investment) of MM
Although I am not 100% in-sync with MrFI2024, I do see that his thoughts and (sometime contradicting) actions, could be useful scenario play for (potential) MM investors.
See how he found MM as a dividend stocks, diverse when MM share price increased to 7x of dividends and then brought back MM at a much higher price that he diverse.
Also, take note that this time, he is using CPF to buy MM... which is a strong indication of his conviction on MM.
Enjoy his MM journey started in 2016...
21/9/2016
For the past two months, I have made the following adjustments:
1. Added my holdings to Capital Retail China Trust, Fraser Centrepoint Trust and SIA Engineering. All these are to increase the dividend payout received from them.
2. I divested Vicom due to uncertainty in its short term business outlook.
3. I divested SGX due to lack of affinity to it.
4. I have initiated a position Micro-Mechanics as I see a constant stream of dividend from them.
12/2/2017
It has been a busy past 6 weeks. Things are finally looking to settle a bit and it’s time to continue to keep in touch with my thinking and reflection on my investment.
It has been a good start to the year for the market and my portfolio also benefited from it. Year to date, it has returned 12.8%. Woohoo, I hit my target in less than two months. So would I achieve another 40% return this year? I hope so but you never know. Who knows? The market might just turn south any time. So continue to monitor the company’s performance and invest/divest at the right time for the long term.
I have added the following positions.
Valuetronics: Increased my stake slightly for its dividend.
UMS: Bought a small stake after reading its plan to divest its customer base and attracted by its consistent dividend.
Micro-mechanics: Increased my stake after it announced its good improvement in its latest quarter. Attractive dividend and potential of further growth.
Dutech: Took a very small stake after reading Thumbtack Investor’s detailed analysis
Sing Medical: Took a very small stake as I perceived that the new management will continue to improve the group’s performance
Fraser Logistics and Industrial Trust: Took a very small stake after reading about it on The Edge and Dividend Warrior’s analysis.
24/2/2017
A few more days to the end of the month and took a few more actions after the release of various results over the past 2 weeks.
dividend yield of portfolio stands at 4.1%. My top 8 holdings in terms of initial capital outlay are:
Raffles Medical @ $1.48
Parkwaylife Reit @ $2.32
Straco @ $0.84
Best World @ $0.60
Valuetronics @ $0.56
Fraser Centrepoint Trust @ $2.01
SingTel @ $3.82
Mirco-mechanics @ $0.91
29/5/2017
All my counters have reported their performance for the period. Below is a short summary of my top 10 counters’ performances.
Micro-Mechanics reported its 20173Q results on 28 April. For the second consecutive quarters, it has improved its revenue and earning. For 9M, revenue is up by 9.0% and net profit up by 12.8%. It does seem that their strategical review last year to focus the engineering, development and investment efforts of the Group’s five factories on serving the semiconductor industry is working. Utilisation rate has gone up to 59% for Q3.
It seems that Micro-Mechanics will do well for the next few years and with its dividend policy of not less than 40%, this should continue to be a good investment.
9/6/2017
The Singapore market has done well for the first half of the year. Including dividend, STI ETF has returned about 14%. Till date, my cash portfolio has returned about 41%. The bulk of the return is contributed by the following four counters:
Best World – 143%
Valuetronics – 70%
Food Empire – 46%
Micro-Mechanics – 41%
TIME TO SELL?
Micro-Mechanics is trading at a historical PE of 14.6. Assuming net profit grow by 12% for the year (net profit grew by 23.5% in Q2 and 26.6% in Q3), PE would drop to 13.1. With the increase of its interim dividend to 3 cents in 1H, I expect similar dividend of 4 cents for the full year, which gives a dividend yield of 5.5% at current price. Definitely not overvalue.
Conclusion
While the four counters have given me very good return, their fundamentals remain sound and are not overvalue. With no new idea and I do not need cash currently, I will continue to hold on to them.
1/7/2017
Best World, Food Empire and Valuetronics were the key drivers of my first half performance. Will they continue to do well in the next few years? Will other counters take over the driver seat?
I decided to make a prediction on the above questions base on my current, limited knowledge of their business and gut feel.
Micromechanics – Continue to benefit from its strategic decision to focus on semiconductor.
15/8/2017
Micro-Mechanics reported a good quarter with another increase in dividend. However, I decided to divest it just before it announces its results. Hence, I will not update its performance.
28/8/2017
Lots of action this month. Divested a few counters but bought quite a bit with the $$$ from divestment of Best World.
Sold Mircro-mechanics at 1.41. Bought purely for its track record for dividend but its price has gone up to 7 years of dividend due to its good performance. Decided to divest it as its dividend yield dropped below 5%. Surprised me with a second rise of dividend this year and with a 8 cents dividend, yield gone up to 5.6%. On hind side, should have continued to hold on to it but actually felt pretty neutral about it. Probably am satisfied with the above expectation return from the counter.
03/11/2019
Last month, I divested Metro Holdings after holding it for 12 years. With the CPF refunded, I was looking to redeploy the fund. I do not want to invest in REIT as they already occupied 30% of my overall portfolio. I also do not want to invest in a dividend counter that I already held in my cash portfolio. Nothing wrong with that but just my personal preference. I could have buy more of VICOM and OCBC (which I might still do) but I would not deploy all the fund on them. So I was looking for a new dividend counter that I can hold for many years.
In the end, I decided to buy Micro-Mechanics. A company I am familiar with since I once held it before. The subjective me was hesitating to initiate a position at $1.85 as its price has suddenly spiked up recently from $1.6+ in early October. Also, having sold the counter at $1.41 two years ago, it does not feel good to buy back at a higher price. The objective me argued that I should not to look at past prices and decision should be made based on current valuation and future outlook.
![[Image: screenshot-2019-11-03-at-4.49.13-pm.png?w=1024]](https://mrtfi2024.files.wordpress.com/2019/11/screenshot-2019-11-03-at-4.49.13-pm.png?w=1024)
Micro-mechanics has seen a decrease in both its revenue (-7.3%) and net profit (-24.5%) in the last financial year due to a steep cyclical downturn in the global semiconductor industry and heightened global economic and geopolitical uncertainties. Despite the lower earning, it decided to continue to maintain its 10 cents dividend. It does mean it is paying out more than its earning with a payout ratio of 110%. The higher payout ratio is not a concern though as its dividend is still lower than its free cashflow per share of about 11 cents and it has about 15.7 cents per share in cash with no debt.
Based on the numbers, it does seem that buying at $1.85 is not too expensive as the yield would be around 5.4%. I decided to wait for its announcement of its 2020 Q1 results before taking any action. I was hoping for a weaker Q1 results will soften its price. Indeed, it reported a revenue drop of 9% and net profit drop of 27%. However, its share price hardly moved on that day. This is probably due to the 6 cents dividend that will go XD next Tuesday (6 Nov) and a glimmer of hope that the down cycle is coming to an end as 2020Q1 numbers are better than 2019Q4.
![[Image: screenshot-2019-11-03-at-5.19.48-pm.png?w=1024]](https://mrtfi2024.files.wordpress.com/2019/11/screenshot-2019-11-03-at-5.19.48-pm.png?w=1024)
With this latest set of results, I finally bought the counter twice last week at an average price of $1.84. The price would probably drop after XD and I am likely to add my third (and maybe fourth) tranche in the coming months.
17/9/2020
Last August, due to the resurgent of Liverpool, I decided to form a football team of stocks. With the oncoming reseting of my portfolio, it’s time to update the team for the new decade. Updated Team 2020.
![[Image: screenshot-2019-11-16-at-11.02.10-pm.png?w=696&h=1048]](https://mrtfi2024.files.wordpress.com/2019/11/screenshot-2019-11-16-at-11.02.10-pm.png?w=696&h=1048)
14/3/2020
Micro-Mechanics is poised for growth this year as evidence from its Q2 revenue growth of 7.4% and net profit growth of 14.4% after several quarters of decline. However, short term outlook becomes uncertain due to Covid-19. MM surprises with an increase in its interim dividend by 1 cents to 5 cents.
I am cautiously optimistic that this is an indication of management’s confidence of the year ahead.
8/8/2020
![[Image: screenshot-2020-08-29-at-4.56.41-pm.png?...&h=&zoom=2]](https://mrtfi2024.files.wordpress.com/2020/08/screenshot-2020-08-29-at-4.56.41-pm.png?w=1060&h=&zoom=2)
As expected, Micro-Mechanics announced a good set of results. Revenue and net profit are up 17.5% and 45.5% respectively. And if guidance by the world semiconductor body is correct, the demand will continue. Company recommended a 7 cents dividend. Together with the 5 cents interim dividend, that’s a 20% increase from previous year. Payout ratio is about 110% based on both earning and free cashflow, so it is dipping into its balance sheet. Not a big concern as balance sheet is robust with about 15 cents per share. Also, with its US plant receiving customer qualification for a family of ultra-critical parts used in the semiconductor wafer-fabrication process, things look bright for the coming years.
Will add when more fund is available for CPFIS.
30/10/2020
I am happy with what I heard from the AGM and what I read from their responses to the questions raised. I have bought MM for its growing dividend and looking at its record cashflow for 1Q21, I am confident that they will hand out similar or even more dividend for this financial year.
As I have hit my CPF investment limit and it is already the second highest position in my portfolio, I am not going to add more. I will just hold on to my current stake to participate in its growth.
7/11/2020
First team made up 70% of my portfolio which is 4% higher than the previous quarter. This is attributed to the strong performance from IFAST, Micro-Mechanics and Parkwaylife.
Micro-Mechanics reported another record quarter, with revenue up by 18.3%, net profit up by 43.2% and free cash flow up by a whooping 81.8%.
this is the best quarter over the past year and bearing unforeseen circumstances, this should continue for the rest of the year. I also came away from the recent AGM feeling positive and am confident that the company is able to at least maintain its dividend for this financial year.
Currently occupying 7.5% of my portfolio and almost reaching my CPF stock investment limit, I will just continue to hold on to my current stake.
Enjoy:
Stay home and stay safe, everyone.
https://mrtfi2024.wordpress.com/category/micromech/
Good morning valuebuddies.
Another cold day started and once again, lots of opportunities open up in front of us.
I would like to trace an investment journey of a value investor.
By sharing his thought process in his blog, MrFI2024 had pen down the investment merit (and diverse and re-investment) of MM
Although I am not 100% in-sync with MrFI2024, I do see that his thoughts and (sometime contradicting) actions, could be useful scenario play for (potential) MM investors.
See how he found MM as a dividend stocks, diverse when MM share price increased to 7x of dividends and then brought back MM at a much higher price that he diverse.
Also, take note that this time, he is using CPF to buy MM... which is a strong indication of his conviction on MM.
Enjoy his MM journey started in 2016...
21/9/2016
For the past two months, I have made the following adjustments:
1. Added my holdings to Capital Retail China Trust, Fraser Centrepoint Trust and SIA Engineering. All these are to increase the dividend payout received from them.
2. I divested Vicom due to uncertainty in its short term business outlook.
3. I divested SGX due to lack of affinity to it.
4. I have initiated a position Micro-Mechanics as I see a constant stream of dividend from them.
12/2/2017
It has been a busy past 6 weeks. Things are finally looking to settle a bit and it’s time to continue to keep in touch with my thinking and reflection on my investment.
It has been a good start to the year for the market and my portfolio also benefited from it. Year to date, it has returned 12.8%. Woohoo, I hit my target in less than two months. So would I achieve another 40% return this year? I hope so but you never know. Who knows? The market might just turn south any time. So continue to monitor the company’s performance and invest/divest at the right time for the long term.
I have added the following positions.
Valuetronics: Increased my stake slightly for its dividend.
UMS: Bought a small stake after reading its plan to divest its customer base and attracted by its consistent dividend.
Micro-mechanics: Increased my stake after it announced its good improvement in its latest quarter. Attractive dividend and potential of further growth.
Dutech: Took a very small stake after reading Thumbtack Investor’s detailed analysis
Sing Medical: Took a very small stake as I perceived that the new management will continue to improve the group’s performance
Fraser Logistics and Industrial Trust: Took a very small stake after reading about it on The Edge and Dividend Warrior’s analysis.
24/2/2017
A few more days to the end of the month and took a few more actions after the release of various results over the past 2 weeks.
dividend yield of portfolio stands at 4.1%. My top 8 holdings in terms of initial capital outlay are:
Raffles Medical @ $1.48
Parkwaylife Reit @ $2.32
Straco @ $0.84
Best World @ $0.60
Valuetronics @ $0.56
Fraser Centrepoint Trust @ $2.01
SingTel @ $3.82
Mirco-mechanics @ $0.91
29/5/2017
All my counters have reported their performance for the period. Below is a short summary of my top 10 counters’ performances.
Micro-Mechanics reported its 20173Q results on 28 April. For the second consecutive quarters, it has improved its revenue and earning. For 9M, revenue is up by 9.0% and net profit up by 12.8%. It does seem that their strategical review last year to focus the engineering, development and investment efforts of the Group’s five factories on serving the semiconductor industry is working. Utilisation rate has gone up to 59% for Q3.
It seems that Micro-Mechanics will do well for the next few years and with its dividend policy of not less than 40%, this should continue to be a good investment.
9/6/2017
The Singapore market has done well for the first half of the year. Including dividend, STI ETF has returned about 14%. Till date, my cash portfolio has returned about 41%. The bulk of the return is contributed by the following four counters:
Best World – 143%
Valuetronics – 70%
Food Empire – 46%
Micro-Mechanics – 41%
TIME TO SELL?
Micro-Mechanics is trading at a historical PE of 14.6. Assuming net profit grow by 12% for the year (net profit grew by 23.5% in Q2 and 26.6% in Q3), PE would drop to 13.1. With the increase of its interim dividend to 3 cents in 1H, I expect similar dividend of 4 cents for the full year, which gives a dividend yield of 5.5% at current price. Definitely not overvalue.
Conclusion
While the four counters have given me very good return, their fundamentals remain sound and are not overvalue. With no new idea and I do not need cash currently, I will continue to hold on to them.
1/7/2017
Best World, Food Empire and Valuetronics were the key drivers of my first half performance. Will they continue to do well in the next few years? Will other counters take over the driver seat?
I decided to make a prediction on the above questions base on my current, limited knowledge of their business and gut feel.
Micromechanics – Continue to benefit from its strategic decision to focus on semiconductor.
15/8/2017
Micro-Mechanics reported a good quarter with another increase in dividend. However, I decided to divest it just before it announces its results. Hence, I will not update its performance.
28/8/2017
Lots of action this month. Divested a few counters but bought quite a bit with the $$$ from divestment of Best World.
Sold Mircro-mechanics at 1.41. Bought purely for its track record for dividend but its price has gone up to 7 years of dividend due to its good performance. Decided to divest it as its dividend yield dropped below 5%. Surprised me with a second rise of dividend this year and with a 8 cents dividend, yield gone up to 5.6%. On hind side, should have continued to hold on to it but actually felt pretty neutral about it. Probably am satisfied with the above expectation return from the counter.
03/11/2019
Last month, I divested Metro Holdings after holding it for 12 years. With the CPF refunded, I was looking to redeploy the fund. I do not want to invest in REIT as they already occupied 30% of my overall portfolio. I also do not want to invest in a dividend counter that I already held in my cash portfolio. Nothing wrong with that but just my personal preference. I could have buy more of VICOM and OCBC (which I might still do) but I would not deploy all the fund on them. So I was looking for a new dividend counter that I can hold for many years.
In the end, I decided to buy Micro-Mechanics. A company I am familiar with since I once held it before. The subjective me was hesitating to initiate a position at $1.85 as its price has suddenly spiked up recently from $1.6+ in early October. Also, having sold the counter at $1.41 two years ago, it does not feel good to buy back at a higher price. The objective me argued that I should not to look at past prices and decision should be made based on current valuation and future outlook.
Micro-mechanics has seen a decrease in both its revenue (-7.3%) and net profit (-24.5%) in the last financial year due to a steep cyclical downturn in the global semiconductor industry and heightened global economic and geopolitical uncertainties. Despite the lower earning, it decided to continue to maintain its 10 cents dividend. It does mean it is paying out more than its earning with a payout ratio of 110%. The higher payout ratio is not a concern though as its dividend is still lower than its free cashflow per share of about 11 cents and it has about 15.7 cents per share in cash with no debt.
Based on the numbers, it does seem that buying at $1.85 is not too expensive as the yield would be around 5.4%. I decided to wait for its announcement of its 2020 Q1 results before taking any action. I was hoping for a weaker Q1 results will soften its price. Indeed, it reported a revenue drop of 9% and net profit drop of 27%. However, its share price hardly moved on that day. This is probably due to the 6 cents dividend that will go XD next Tuesday (6 Nov) and a glimmer of hope that the down cycle is coming to an end as 2020Q1 numbers are better than 2019Q4.
With this latest set of results, I finally bought the counter twice last week at an average price of $1.84. The price would probably drop after XD and I am likely to add my third (and maybe fourth) tranche in the coming months.
17/9/2020
Last August, due to the resurgent of Liverpool, I decided to form a football team of stocks. With the oncoming reseting of my portfolio, it’s time to update the team for the new decade. Updated Team 2020.
14/3/2020
Micro-Mechanics is poised for growth this year as evidence from its Q2 revenue growth of 7.4% and net profit growth of 14.4% after several quarters of decline. However, short term outlook becomes uncertain due to Covid-19. MM surprises with an increase in its interim dividend by 1 cents to 5 cents.
I am cautiously optimistic that this is an indication of management’s confidence of the year ahead.
8/8/2020
As expected, Micro-Mechanics announced a good set of results. Revenue and net profit are up 17.5% and 45.5% respectively. And if guidance by the world semiconductor body is correct, the demand will continue. Company recommended a 7 cents dividend. Together with the 5 cents interim dividend, that’s a 20% increase from previous year. Payout ratio is about 110% based on both earning and free cashflow, so it is dipping into its balance sheet. Not a big concern as balance sheet is robust with about 15 cents per share. Also, with its US plant receiving customer qualification for a family of ultra-critical parts used in the semiconductor wafer-fabrication process, things look bright for the coming years.
Will add when more fund is available for CPFIS.
30/10/2020
I am happy with what I heard from the AGM and what I read from their responses to the questions raised. I have bought MM for its growing dividend and looking at its record cashflow for 1Q21, I am confident that they will hand out similar or even more dividend for this financial year.
As I have hit my CPF investment limit and it is already the second highest position in my portfolio, I am not going to add more. I will just hold on to my current stake to participate in its growth.
7/11/2020
First team made up 70% of my portfolio which is 4% higher than the previous quarter. This is attributed to the strong performance from IFAST, Micro-Mechanics and Parkwaylife.
Micro-Mechanics reported another record quarter, with revenue up by 18.3%, net profit up by 43.2% and free cash flow up by a whooping 81.8%.
this is the best quarter over the past year and bearing unforeseen circumstances, this should continue for the rest of the year. I also came away from the recent AGM feeling positive and am confident that the company is able to at least maintain its dividend for this financial year.
Currently occupying 7.5% of my portfolio and almost reaching my CPF stock investment limit, I will just continue to hold on to my current stake.
Enjoy:
Stay home and stay safe, everyone.
![[Image: 9di3hjteg4561.png]](https://i.redd.it/9di3hjteg4561.png)
![[Image: Screenshot-2020-10-07-at-4.07.09-PM.png]](https://financialavocado.com/wp-content/uploads/2020/10/Screenshot-2020-10-07-at-4.07.09-PM.png)
![[Image: Screenshot-2020-10-07-at-4.08.12-PM.png]](https://financialavocado.com/wp-content/uploads/2020/10/Screenshot-2020-10-07-at-4.08.12-PM.png)
![[Image: track-shack-dedication-borch-medium_large.jpg]](https://s3.amazonaws.com/newsimg.furman.edu/wp-content/uploads/2017/09/22141436/track-shack-dedication-borch-medium_large.jpg)