Author: Investment Moats

Are you suffering from willful blindness when it comes to investing?

Rupert Murdoch testified in the phone spying case that he was not aware that such activities were taking place under his watch. The court ruled that he is willfully blind and cannot be made not responsible for the actions. The interesting thing was the analysis done on whether CEOs like Rupert and Enron’s convicted CEO were living in their own world as up till the last moment they still believe that they are right. In all these cases one thing stood out in common in that these CEO build IP a totalitarian system where no one is suppose to...

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CH Offshore Q3 2012: No more debts and losing 2 ship charters

CH Offshore announced their Q3 results. Results here. Revenue was weaker falling by 8.7% due to lower contribution since they sold of a vessel and some vessels were in repair Net Profit was higher due to a one time US$3.9 mil ship sale gain. Absence of that net profit would have been the same as last year There was a larger contribution from their share of associated companies Cash holding increases to US$67 mil from the sale of ships Due to the sale of ships their non current assets are down from US$188 mil to US$179 mil The group...

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Starhub Q1 2012 Results

A short mention of Starhub since it is one of my larger holdings. The Q1 result released on May 4 was not bad. You can view the presentation slides here & the full results here. EBITDA was consistent versus last year as well as last quarter. Q1 was traditionally a weaker quarter so result is not bad Free cash flow was weaker than last year but still inline as they have less contributed from net working capital. As such full year free cash flow should come up to 430 mil which is more than adequate to pay 340 mil...

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SMRT full year down on rising fuel cost, pays smaller dividend

Here are some SMRT segmental information from the latest full year results. Particularly of concern is the latest 4th quarter performance. Train Operations:Revenue=149m (13% rise), Profit=19m (21% fall) LRT Operations:Revenue=2.6m(11% rise), Profit=0.068m (217% rise) Bus Operations:Revenue=55m(5.3% rise), Profit= -3.7m (110% fall) Taxi Operations:Revenue=29m(23% rise), Profit=1.2m (131% rise) Rental:Revenue=21m(14% rise), Profit=16m (14% rise) Advertising:Revenue=8.2m(37% rise), Profit=5m (25% rise) Engineering:Revenue=8m(1% fall), Profit=1.5m (77% fall) Of real consequence have been that of train, rental, advertising and engineering. Train and engineering have fallen badly while rental and advertising have sustain it. The main attributable cause was energy and depreciation cost. With the bad...

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Share Placements

Share placements are issue of shares to a particular group of potential investors. Typically, these investors are not existing investors. This is probably because the existing substantial share holders do not want to do a rights issue which would mean putting in their own cash. (Think how China Merchant Pacific,  whose owner owns 81% of it doesn’t want to do a rights issue because they will end up paying it mainly by themselves) The company that issues usually do this to shore up their balance sheets to Fund future expansion. They see potential to buy assets that can create...

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CH Offshore:Vessel charter not renewed

Here is an update for CH Offshore share holders. One of their 4 year charter vessel will not be renewed by the charterer. Of note is that it should not hit the profitability of the soon to be closing financial year but would likely impact the next financial year as the charter rates are much lower. [Announcement here...

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Hard up on cash? Do Extreme Couponing!

Finding it hard to feed your family? Couponing have been around a long time for retail shops to make it easier for price conscious shoppers to identify themselves and yet still able to buy the products. But what I never anticipate is how much effort some people will spend on it. So much so that they got a whole boot load of free products to sustain their living. And I really mean FREE. This isn’t for everyone but the absolute price conscious. You would have to take a look at the effort they spend to find coupons in dumpster,...

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Investment Moats Portfolio Update April 2012

Some readers asked since January what did I add to my portfolio. Not much really. ( Click to see larger table) I basically added some of CH Offshore, Adampak, Kian Ann and Global Investments Limited. Adampak, was a short 55% gain, and I didn’t even start accumulating.  CH Offshore did really well recently. Global Investments Limited was a rights issue. I subscribe to 5500 rights and 11500 excess rights. ( Click to see larger image) Here is what I am currently on. Those grey out rows with cost zero are holdings that I sold, but you can take a...

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Notes to Margin of Safety–Seth Klarman

Seth Klarman is not a name very well known in our part of the world but he manages the Baupost Group, which is one of the top 10 hedge funds by net gains since inception, which was in 1983 (29 years). Most of the top hedge funds that we see are usually quantitative, momentum based managers, so for a value manager to have such a great record in the long run he must be doing something right. Seth wrote a famous book Margin of Safety which was written in 1991 and now out of print. The hard cover book...

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First REIT:Q1 2012 Result

First REIT continues to announce a stable set of results for the first quarter.[Results here] A distribution of $0.0776 works up to a yield of 2.09% for the first quarter and an annualized yield of 8.4% at the current share price of $0.92. A note to investors is that for this quarter and the last 2 quarters, they have been distributing a one time gain from the sale of their Adam road healthcare building. Thus the dividend yield is higher. Without those the quarter dividend yield would have been $0.0158, 1.7% and annualized $0.068, 7.4%. That is still a...

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Marc Faber: Dividend Stocks provides cash flow but you need to reinvest well

For all the doom, gloom that Marc Faber usually paints, he does believe that certain areas will bloom. Many do not know that he is pretty big on emerging market equities that generate good cash flows. In Singapore some of the stocks he owns are Starhub, K-REIT and Suntec REIT. I came  across this transcript where he discusses the current investing climate with Jim Puplava (Mar 2012) [Read Transcript here]. In this article, Jim was discussing with Mark whether dividend investing has a place in today’s investing climate and this is Mark’s reply: Well, you see, I’m an advocate...

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Buffett announces he has stage 1 prostate cancer

Warren Buffett announced  that he has stage 1 prostate cancer and will undergo radio therapy. He feels fine and the succession plan will still be in place. At Investment Moats, we hope that Mr Buffett can make a swift recovery. This week is rather depressing as I got to know an acquaintance with family members suffering from same fate. Cancer is getting very very common not just getting younger but for the older ones even though perhaps they have enjoyed a large part of a fruitful life, it is depressing to see them suffer from radiotherapy and chemotherapy. I...

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Buying is cheaper than Renting

It looks like we may see a real bottoming of housing in the US. Marc Faber and Warren Buffett is looking at US housing as inflation hedges. This article in Slate could be a tell tale sign As an illustrative example, consider the following from the complex where I live. In the rental portion of the facility, you can grab a 754-square-foot apartment for a minimum of $2,269 per month. In the condo portion, one door down, in a building also completed in 2008, an 868-square-foot apartment is selling for $419,900. That suggests that if you happened to have...

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Singapore Press Holdings (SPH) Jan 2002 to Jan 2012 Total Returns

I took some notes while looking through SPH’s Q1 report (notes here). Here are more notes. (Click to see larger chart) This chart starts from Jan 2002 to Early 2012. So its roughly 9 years. There was a sharp drop, which was due to a 5 for 1 stock split in 2004. In early 2002, SPH started off at $22.70. That is approximately $4.54 in current price. Since 2008, we have not reached that price for 3 years. (Click to see larger chart) Total dividend collected is 72,48% for the 9 years.  Total unrealized gains is –14.32%. Total returns...

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Some thoughts on Singapore Press Holdings (SPH) Q2 2012 results

I have got some time on my hands and to be honest not many of my stocks are releasing earnings so I might review SPH. The earnings and revenues from the newspaper division was largely flat. The main boost to net profit came from their property rental. Clementi Mall contributed more than this time last year, hence the out performance. The online initiatives look to be barely boosting or making a dent to revenues. As such the tactic for SPH look to be maintain their newspaper and magazine business, get the cash and the market cap to build a...

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