paullow portfolio

[paullow]

I added a position in leemetal using my tan chong dividends

- 4 x a year dividends looks good to me and the price is weak due to weak earnings, but i note that its nav has been rising.

- with so much infrastructure going on esp mrt lines, this should keep leemetal busy for a long time to come.

paullowinvestmentjourney.blogspot.sg

[valuebuddies]

Hi Paul, thanks for sharing. What do you think about BRC as a comparison to Lee Metal? It seems to me that BRC is still better with lower gearing and higher margin.

[paullow]

thanks for allowing me to share.

Being a long term investor, I shall attempt to compare both over a decade frame when I stay vested. This will encompass 2 crises, sars and gfc.
I look at dividends over a decade or even two, as the direct translation of ABS ie company assets, business and structure to small shareholder benefits. This way, I will be able to predict the likelihood of a company repeating its performance into the next and allows me also to compare two companies.

Lower gearing and margin and earnings etc can fluctuate and I tend not to be so concerned about them.
Instead, I prefer to look at past decade of dividends for the reasons mentioned above.

Here's my take:

BRC:

1) skipped dividends in 2004 and 2009 (GFC)
2) no clear pattern of dividend raise. Is business revenue any clear trend? I cannot see it, at least from the translational point of view.
3) not sure about nav rise, since when the above 2 criteria absent, I tend not to look further.

LeeMetal

1) no skipped dividend. Clear signal of large shareholder taking care of small.
2) Dividends increased from 0.5c 10 years ago to around 3c now.
3) Dividends frequency increased to 4 x a year
4) in 2009 ie crisis when BRC skipped dividend, Leemetal had a bumper year.
5) nav rise


IMO, I see much stronger likelihood of leemetal repeating its past decade performance into the next, compared to BRC. Crisis period are the best times actually to assess the company's financial strength.

And I don't feel as comfortable in BRC as I think the possibility of skipped dividends in future is higher. Dividends are cash flow. No dividends means no cash flow. I need to be rather sure and confident of getting it, or rather not missing it in the long run.

In my case, I use one tan chong payout to exchange for 4 payouts next year, while keeping my tan chong shares still. Not a bad deal to me.


Thanks once again for reading.

paullowinvestmentjourney.blogspot.sg

[valuebuddies]

Hi Paul, many thanks for your clarification. I tend to see in another way as to who would suffer more when interest rate hike. And moreover the BRC dividend did increased from 0.65c in 2008, 0.8c in 2010 to 1.7c in 2014, though the dividend policy for BRC is inconsistent.

Because of your post, I have taken a quick look at Lee Metal's FS. Revenue has been in downtrend from 983m in 2009 to 636m in 2013, though EPS fluctuate between 3.99c (2011) to 8.46c (2013) during the 5-years period. Average EPS for between 2009 to 2013 at current price is about 6.6 times, near to BRC's 6.8 times for the same comparison period.

What I prefer BRC over Lee Metal:

1. revenue and profit both on consistent uptrend, doubling from what it posted in 2009
2. dividend tend to give a big boast in good year
3. lower gearing thus lower financing cost thus tend to be "debt-free" quicker
4. higher NPM indirectly means higher operating efficiency (or due to lower financing)

I have to admit that both look undervalue in some way and I have been watching them for some time already. I think there is no right or wrong in our analysis simply because of different preference only.

Though you are more in medical profession (I guess ), but I do enjoy reading your posts and analysis in the forum! Big thank you!!

[paullow]

No change in my portfolio so far.

Plan
1) to use coming NGI and Taisin dividend to buy more TCIL. Use that sum of money to create 2 streams of monies next year, while retaining that same stream of income.

2) to use my Leemetal dividend received next month to add Singre. My Leemetal was bought from my TCIL dividend received this year. So dividend money divested once from TCIL to Leemetal and now to Singre, while still holding on to original stakes.


http://paullowinvestmentjourney.blogspot.sg

[corydorus]

Understand the re-investment of dividends. Why do we constraint ourselves to the values of our dividends ? Why not lesser or more due to fund availability and market opportunities ?

[Temperament]

hi guys. hi moderator.

i received some very positive feedback of late. Thus decided to ignore negative noises and share my positions. Luckily I could remember my password.

My positions,

ST Eng
TCIL
Hupsteel
NGI
SpRe
StamLd
Taisin

Due to positions in certain counters which can be derived from the AR, I decided not to place the %.

http://paullowinvestmentjourney.blogspot.sg/


Hope this can be informative.


p.s.


In case this blogsite is too cramp..i have cut and paste the info here:


Insight 1: Simple concept works

Do not to spend too much time crunching numbers, but spot perpetual dividend payers. Look at big boys such as MCD, gen mills and colgate, they are perfect candidate for dividend compoundation, in simple terms means suing the dividends to purchase more shares.

****The all important question: can the earning be repeated and dividend paid over and over again. When we are talking about huge huge companies with strong moat, the answer is an astounding YES.

For smaller companies, and mid caps, a bit more homework is needed, since the risk is higher with smaller companies, this needs to be mitigated with the necessary knowledge. It cannot be reduced completely but can be mitigated to some extent. But still the key is perpetuality olf dividends.

ST engineering, SIA Engin, Singtel, SATs are good candidates. Mid caps such as UOL, TCIL also fit the bill. Smaller caps such as hupstee; noel, singrein also do the trick IMO.

The local companies' dividend payout might not be as stable as those muiltibillion dollar companies in the US. But over a decade or so, the pattern has to be seen, ie there MUST be regularly dividends and these MUST be raised over time, though perhaps not year after year, for the reason alluded to earlier.


Insight 2: Invest regularly, no need to time the market


There may be many people who take advantage of bear market by keeping a big warchest.Some took this approach. This approach looks easier than it really is, as Munger said:" it takes a lot of character to be sitting on money", and the truth is, we will never know the bottom or peak until we passed it.

For me, I use the focus approach, not too many counters so that I can keep track of what's going on in each company. My ideal number would be 5-10. I invest a lot on these counters, and i just reinvest his dividends, i never bother about the direction of the market, i just make sure he did the homework before he buy and leave it for the long term. This is important, must read sentence ***The golden words: over the long run(we are not talking of even a few years, mind you), the downside will take care of itself, and whatever is left is the upside.


Insight 3: It is possible.


Family and children are not hindrances to investment. Keep your lifestyle simple. Buy what is necessary only. Live well BELOW your means. Personally, my lifestyle today is very much the same as when I just started working. I still enjoy my roti prata, mee rebus. I see nothing wrong with hawker fare. Low class? Not for me.


Insight 4: Enjoy the present. (This is important, actually very important)


DO NOT mix the active and passive income. Let the passive compound and use the active money to enjoy. If you mix active and passive, one day you might find yourself painfully selling your dividend paying shares to pay your credit card bills etc. Don't think too much, we never know what the future holds for us and our plans might go wrong.


Final thoughts:


Last warning and parting words from me, don't follow tips if any and expect only way is up. I insist I have no idea how my stocks will perform in days, and months. But that does not bother me. Handphone bills, utility bills and credit card bills have a way to find themselves in your post box every month, like it or not. So I am only bothered about receiving the regularity of my dividends. The day I call it quits from working totally, I can be fully assured that I can take care of all my bills and with surpluses.


Concentrate on building and increasing your soldier(ie share) base. Over a long time, you would have build up a sizeable portfolio with regular dividend cheques coming in every month or so.


regards,

Paullow

>Insight 2: Invest regularly, no need to time the market


>There may be many people who take advantage of bear market by >keeping a big warchest.Some took this approach. This approach looks >easier than it really is, as Munger said:" it takes a lot of character to >be sitting on money", and the truth is, we will never know the bottom >or peak until we passed it.

It all depends on your temperament.
Some like this way. Some the other way. The way you find can make you money is the "right" way for you.
i can only agree with you the importance of dividends and the companies we invested in, we should considered to be still around after 10, 15, .....years.

[yeh]

hi paul, i have stamford ld and st engineering.
both losing about 6-7k paper losses now.

do u think good time to average?

how do you think these 2 companies?

[paullow]

hi yeh,

any price which is below your purchase price and in which the company fundamentals remain much the same is a good price to enter.

in addition, I would ask myself, how can my cash flow be raised by buying more of these equities? Or is there a better option, ie another stock which is even more beaten down unfairly and/or offers a better dividend, which can be used to buy more stocks subsequently.

personally, i am using my dividends to buy more stocks, whether of the same counter or of a different counter. in a way, dividends are like playing lego, we need to find where's the best place to put it such that the foundation of the structure can be stronger than before.

http://paullowinvestmentjourney.blogspot.sg/

[yeh]

hi paullow

are you buying stamford ld and st engineering with current share price?