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Posted on January 24, 2010 - by Derek Lim

Time Watch – Dual List Hype

24 January 2010

Time Watch revenue has been increasing steadily since 2007. Kind of surprised because it’s competitors experienced negative growth in FY2009. Time Watch latest results has already seen an increased in earnings.  However there are some queries from SGX on its Financial reports and I will be scrutinizing it. In addition, what contributed to the strong earnings in FY2009?

He thought that this could also be why Time Watch currently trades at a price to earnings (PE) ratio of about six times, compared to peer stocks which trade for as much as 13 times PE.

Michael Tung Chief executive Time Watch Bussiness Times Jan 19 , 2010

It seems like Mr Tung is correct in saying that its share price does not correctly reflect its growth. For FY 2009, the growth rate was almost 20% yet it’s P/E ratio even at my buy price of $0.20 is only 6.9.  However, it’s peers in Singapore are also trading at that range. Cortina Holdings seems to be the most similar to Time Watch in terms of revenue.  If Mr Tung claims that its peers in Shanghai and HK is trading at a P/E of 13 is true, then a dual list is the best bet for its price to be reflected correctly.

Next is to analyze Time Watch competitors in Shanghai and HK.

21 January 2010

Was contemplating on using all my excess cash to buy Time Watch but decided against it. As this is highly speculative, at the end of the day I want to be able to have a good rest.

Dow is bleeding badly and I am very certain that Time Watch will fall tomorrow. Should I hold, sell or average down? Time Watch represents 8% of my portfolio. A further drop in price may offer an opportunity to pick up more. I expect at least a 20% drop (price before news of dual list) before I evaluate my next step. Hopefully, it will not occur this week so that I have enough time to do more research this weekend.

20 January 2010

I have to admit that I was greedy. I bought this company after reading in the Business Times about the possibility of a dual list.  Knowing how all the share prices surge after the news. I decided to join the crowd.

PE before news of dual list was 5 times and Time Watch claim that its peers are trading at 13 times. The share price has surged 20% after the news.  At my buying price of $0.20, PE based on last FY earnings is still a reasonable 7.6. The latest quarter results seems alright too.

Risk:

• I did a quick check on a local competitor – The Hour Glass and it’s trading at a PE of about 7 which is about right.
• The company claim that its own brand name “Tian Wang” is one of the best selling watch in China. However a quick check in the internet comes out with little information.

• Retailing a variety of products including jewellery, cosmetics, electronic products and dried food products…

  This sounds like diworsification to me. Shouldn’t it be concentrating on its core business – watches?

If what Time Watch claim to be true – it should be trading at a PE of 13, there is still a 80% upside to the price. However, the main driving force will be the successful dual list in either HK or Shanghai.

Posted on January 14, 2010 - by Derek Lim

Lian Beng – The Whisper Stock

The reason that I bought it is because someone told me that that this stock is going to rise soon. That was over a year ago and I believe ’soon’ will never arrive, at least not this year.

As some may know, I’m a avid fan of Peter Lynch and I am going to do a quick take on Lian Beng.

Lian Beng is a cyclical stock – pretty obvious given that it moves in sync with construction demand. I bought the stock in May 2008 at $0.380 which is at the downward cycle. For cyclical stocks, it is important to identify and buy it when the cycle is just about to begin or at the very least when the cycle is still at its infant stage. The latest financial report is pretty decent – profits are better than the previous quarter. However the business times reported that construction projects are easing and there’s a high chance that the number of projects will dip even further in 2011 – 2012. I believe it is true – with the completion of IR and related projects, I can’t think of any that can spur the construction industry. At it’s last close of $0.330, is it a good time to offload this stock and invest in others?
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Posted on October 19, 2009 - by Derek Lim

Test @4.20pm

Test @4.20pm

Posted on August 21, 2009 - by Derek Lim

Invest Fair 2009

The Invest Fair is here again. I’m sure for some this is an event not to be missed.

Maybe I’m a little biased but I don’t see how attending a fair can make me invest better. I’m pretty sure it is more of a motivational talk telling you that investing is better than saving, start investing now etc. I will probably go home inspired but with more questions than answers in my mind. For those wanting to know what to invest in, those ‘gurus’ will probably paint a vague outlook of the economy and recommend some classes of stock. If you wanna learn in depth about TA and FA, you will probably be ask to sign up for some paid courses. After all, you can only expect so much for something that is free ya?

Of course the Invest Fair ain’t all that bad – it is a good place to socialize and network, and if you see Uncles and Aunties flocking to a particular stock, it is time to take notice too. With so much information available on the media, internet and papers, I will give the Invest Fair a miss rather than succumb to information overload. Besides, I don’t have to be there to know what’s going on. I’m pretty sure bloggers will start blogging about it provided that they do not have the same thoughts as me.

Anyone keen to share their thoughts on Invest Fair 2009?

Posted on July 21, 2009 - by Derek Lim

Q: HDB Outstanding Loan vs CPF

This is the first time that I received a query on personal finance issues from a reader. I’m pretty ’shocked’ actually because I am not a qualified financial adviser but the average Joe facing the same day to day financial problems like man on the street.

The reader has given me permission to post it my site and what’s better than to open this question to people here whom I believe have more knowledge and real life experience than me. I will of course shed my 2 cents worth when  I get back home later.

Hi,

Just want to check your opinion on my outstanding HDB loan. I have a 30 year HDB loan, now in the 10th year, and thus have serviced most of the interest. Was doing some calculations to determine if it is better to pay the principal to reduce interest on the HDB load, or to leave the money with CPF and earn interest.

Status

Outstanding HDB Loan: S$ 205,000.00

Interest: 2.6% per annum monthly rest

Monthly: S$ 1,138.00 till end 2028.

CPF Ordinary Balance: S$ 54,000.00

Interest: 2.5% per annum monthly rest

Scenario 1

If I don’t touch the CPF:

- Total interest paid for HDB Loan from now till 2028: approx. S$ 55,000.00

- Total interest gained from CPF based on principal of S$ 54,000.00 till 2028: approx. S$ 32,800.00

- That means net interest paid is approx. S$ 22,200.00

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Posted on July 10, 2009 - by Derek Lim

Macquarie Warrant Hotshot Contest

Welcome to the third Macquarie Warrant Hotshot competition! The real-time simulated trading contest designed to improve your knowledge of warrant investing without risking any capital. In fact, you could stand to win the $20,000 Grand Prize if you are crowned Singapore’s Warrant Hotshot.

The Hotshot contest is suitable for investors of all skill levels from newcomers to experienced warrant traders. Participants will begin the contest with $100K Hotshot dollars and prizes will be awarded to those who are able to generate the largest profits by trading Macquarie warrants in the simulated trading environment. Warrant prices in the contest will mirror the real warrant prices on the SGX. Read more…

Posted on July 6, 2009 - by Derek Lim

New Blog Aggregator – www.TheFinanceRSS.com

As the number of blogs that I aggregate grow, it is becoming more and more time consuming to update them into my site. It will soon come to a point where I can no longer accommodate all of them. Hence, in my quest to become a more efficient finance and investing blog aggregator, where both readers and bloggers can benefit, I have created a new site – www.TheFinanceRSS.com.

TheFinanceRSS is similar to most aggregators out there like AllTop and Popurls but the major difference is that I will focus  on Finance and Investing Blogs only. Hence, you won’t see feeds from the major newspapers or financial magazines.

This site is still in the pilot phase or Phase 1 as I call it – plain layout, some blogs have not been added in yet and a little messy (just simple feeds with no categorizing whatsoever).  I will like to measure the response first before I proceed to the next phase.

Feedback and suggestions are warmly welcome.
Feel free to drop me a comment or email me at admin@thefinance.sg

Posted on June 15, 2009 - by Derek Lim

LMA – A hidden asset play?

LMA has been in my radar ever since October last year, when I noticed that it was regularly buying back its shares. In fact, it has been doing so since 2007 but the number of treasury shares then was not significant and its price was too high. Although some directors have also been raising their stake, I shrugged it off as a company/directors that are taking this opportunity to increase their share value/stake amid the downturn.

However, during the recent recovery, LMA shares increased by 60% (from 12 to 18 cents) and it is still buying back its shares.This was the catalyst that made me decide to do a more detailed analysis.

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Posted on January 10, 2009 - by Derek Lim

Will you terminate this policy?

I recently received an email from my IFA relating to TM Asia Life bonus policy for 2009. Policyholders who maintain a participating insurance policy such as a whole life or endowment plan with TM Asia Life will be relieved to know that their 2009 bonus will NOT be cut despite a very turbulent year in 2008 and will be sending a letter to all policyholders who own a participating policy soon.

What makes it even more surprising is the statement below.

TM Asia Life can surely be proud of its unmatched record of never having to cut its bonus ever since its maiden bonus declaration to its participating policyholders in 1951.

Source: From an email article that I received

This is a very bold claim. I have no way of justifying it since I only purchased a policy from them last year but still, there must be some truth in it to be able to publish such a statement. I hope the same could be said of my current insurer.

In my last article on The dawn of a new year… I mentioned that I was contemplating on terminating my 20 year Endowment policy (year 2009 will be the 16th year) and I will like to ask readers here to vote. I will not necessarily make my decision based on the votes here but it will be a good opportunity to share and hear from you.
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Posted on January 3, 2009 - by Derek Lim

The dawn of a new year…

2008 was an eye opener for me especially for one who experiences his first recession first hand. While I took into consideration a slowing economy, I did not expect it will become this bad.  Hence, I made a couple of bad decisions to invest in construction and shipping counters. The construction and shipping boom is well and truly over and I estimate it will take at least 5-10 years for them to recover.

With news of retrenchment everywhere, I’m fortunate that my job is safe (for now). Our CIO only mentioned that there will be a head count freeze and there are no plans for a reshuffle but as we all know, top management is always fickle, hence we should always listen to such news with a pinch of salt. My current finances aren’t exactly in a mess but the  plan was drafted at the end of 2007 and is no longer viable in the current economic conditions. In addition, I will have more commitments in the coming year such as planning for my marriage, starting a joint account and making a contribution towards my grandfather’s living expenses.

Faced with so much uncertainty and increased commitments, I will adopt a conservative approach to my 2009 financial plan. (more…)