Author: Investmoolah

Lesson from Ezra Bankruptcy: Asset Rich, Cash Flow Poor

By now, some of you would have read Ezra’s filing for bankruptcy protection in the United States. Previously a billion dollar company, Ezra’s fall from grace was due to the fall in oil prices. Nevertheless here are a few things we can learn from it. 1) Cash/Cashflow is key One reason for Ezra”s decision to file for bankruptcy was due to its inability to pay creditors. The reason was simple – Ezra’s assets was neither generating sufficient cash flow to meet its daily expenses nor did it have enough cash reserves. If one were to examine Era’s balance sheet...

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Portfolio Update Feb 16

Since my previous portfolio update, I have made a few more purchases. The first was the purchase of Broadway Industrial at 0.195. The thesis is pretty simple because I am hoping for a bumper dividend from completion of its “Foam Plastics and Flow Control” Segment. I am hoping its one off high dividend will attract investors attention and push its stock price up. Thta is where I will evaluate my position.  The Second purchase was World Precision Machinery at 0.22. Its business is in the metal stamping industry and is based in China. It is a subsidiary of Bright World...

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Owning a Car in Singapore can make sense

Fellow Blogger, Bullythebear, covered an interesting concept he read from ‘Tools of Titans” by Timothy Ferris. It talks about weighing the utility of the extra time gained from spending an extra dollar to get it. This concept reminds me of constant conversations about how a car is a tool of convenience through saving time. So, I will be using a mathematical approach to show when owning a car in Singapore may make sense. Cost of Owning and Maintaining a car Firstly, lets find out the approximate expense of owning a car for 10 years. I used the price of...

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How to be a millionaire through Stock Investing by 2017

Dear Readers & Fellow Bloggers,   I am neither hallucinating nor suffering from permanent brain damage as I write this post. I have stumbled across a company on the SGX where you can indeed earn a million ( if you believe the management & auditors). Introducing China Sports International About China Sports International A China Company which sells Sports & Apparel products in China under the brand name “Yeli”. The company’s current market capitalization on the SGX is s$9.228 million. Its current auditor is RT LLP. How To Make a Million Before you guys get too excited , lets...

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Portfolio Update and New update of Ellipsiz

Since the last update of my portfolio, I have made a few more purchases: 23,000 shares of silverlake shares at the price range of 52-52.5 cents and 10,000 shares of ARA at s$1.685. The rationale for ARA is straightforward. The company is undergoing a takeover offer at 1.78. With the takeover targeting for completion by 1H2017, I am expecting a return of about 5% over the holding period of half a year. The downside is of course the failure of the takeover. However, ARA is a relatively strong company; given that it is dishing out annual divided of 4...

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When Reality does not Meet Expectations

Read a US news article which argued how dining expenses will increase if President Trump’s policy were set in place. You can read it here. What got pique my interest was this particular paragraph: “A stark example of the need for immigrant labor was apparent in 2011, when the North Carolina Growers Association had 6,500 farm jobs available, all of them in or next to counties with unemployment rates greater than 10 %. Only 268 of the approximately 500,000 unemployed North Carolinians applied for a position. Ninety percent of them were hired, but only 163 showed up to work on...

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Portfolio Update: Dec 16

Given the price weakness of my core (only) 2 holdings, I have decided to accumulate Hyflux Preference shares (avg weighted 93.50) and Penguin Holdings (21.1 lots at 0.23 cents). It will be interesting to see how it goes, my thinking or Hyflux is that redemption is likely, while for Penguin, it’s P/B ratio is rather low despite negative earnings. This allows a huge margin of error and upside in the event of liquidation.   What I am eyeing   One of my old favorites, Silverlake Axis, has fallen back to levels which I had purchased at in 2015. You...

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Pitfalls of relying only on P/E ratios

P/E (price earnings ratio) is a measure often used and cited for stock analysis. Commentators will often appeal to the masses by quoting lines of: “Buy this stock now! It is selling at such a low P/E ratio”  But is it a reliable measure? Let’s use the complete past 3 year financial results (excluding one-offs) of Ezion Holdings and Penguin and the share price these companies were selling for slightly after the announcement of their full year financial results on the SGX.  FY end     Ezion EPS Share price (start Mar) P/E ratio 2013 16.06 163.5 10.2 2014 16.53...

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KrisEnergy Bondholder Woes

Came across a Straits Time Article about Krisenergy seeking bondholder’s consent to accept a new bond and the bondholder’s unhappiness. The article is linked here. Summary  Basically KrisEnergy is asking existing bondholders to accept a new bond which is of a 5 year tenure and at a lower interest than the existing bond. In addition, bondholders get to enjoy some increase in interest rate repayment if oil prices move above US$70 during these 5 year period. In addition, KrisEnergy shareholders (mainly Keppel Corp) will inject $140 mil into the company by subscribing to zero coupon secured notes. My Opinion In my...

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My Dividend Stock Purchase: Hyflux Preference Shares (N2H)

After holding  a large percentage of cash for a long while; I have decided to purchase shares in N2H, Hyflux Preference Shares. Hyflux’s preference shares are bond like instruments which gives the holders a fixed dividend payout at each time period (6% for Hyflux’s case). These dividends are paid on a pro-rated semi annual basis and cumulative, meaning to say if Hyflux defers on paying dividend this year, it will be rolled to next year. It can be for an indefinite period However, these preference shares has no maturity date to redeem, but Hyflux has to pay 8% dividend if they...

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Looking for Bargains

I have been busy at work during the past 2 weeks and as a result, no postings has been done. So here’s some of my latest transactions.. Transactions Divestments: TTJ & Ezion today. As of now, cash is the largest component of my portfolio, at 75%; Stocks is at 13.4%, while P2P is 11.6%. I have made no further P2P investments. Opportunities Action bias is now a real risk. Being a human, I will have to resist the urge to do something. As Blaise Pascal said: “All of humanity’s problems stem from man’s inability to sit quietly in a...

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Wells Fargo Scandal: Sales Target and Trust

Followers of US bank will be aware of the ongoing scandal at Wells Fargo – the bank has been found to open for its customers millions of unauthorized accounts which was earning banking fees without their knowledge. A summary of the Wells Fargo Scandal can be read here. Chasing Sales Target This is one of the biggest “dilemma” of the financial industry – many employee’s KPI is measured against the sales target they bring to their employers. This means having to get new or existing customers to buy new financial products; however, if these financial products offered by banks...

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Transaction Update, Ausgroup, Future of Singapore’s O&G

Transaction Update For the month of August, I have divested the following: Silverlake Axis – Banking on today’s price run, I have taken the profits as I think silverlake is just about fairly valued at 4.8% dividend yield First Ship Lease Trust –  The MR2 tanker prices have been falling and thus time to sell off. XMH- Sold off for better utilisation of cash. Using the cash, I have started accumulating Ezion at 31, 27, 26 and 22 cents. Please see the “Future of Singapore’s offshore” Ausgroup Ausgroup’s financial results was a disappointment. The group has impaired its assets, resulting in a...

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How Perpetual Securities affect Ordinary Shareholders

Perpetual Securities are a class of financial instrument and has in recent times gained popularity due to a low interest environment. Companies such as Ezion, Hyflux and even Mapletree Logistics Trust have issued such instruments to retail investors. This post seeks to cover the basic of Perpetual Securities and how it affects ordinary shareholders Classifying Perpetual Holders Perpetual Securities are bond like instruments which gives perpetual holders a fixed dividend payout at each time period. In addition, it has no maturity date to redeem and its dividends are either non-cumulative or cumulative (cumulative means the payment of dividends are accumulated and...

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A new addition – Ezion Holdings

Thanks to the roll out of Pokemon Go in Singapore, I have been fairly quiet in the investing realm. However, the achievement of “level 20: milestone has turned my attention back to investing. My recent purchase has been in Ezion holdings in the region of 0.29. In one sentence, Ezion owns liftboats and charters them out to companies. Its business segment is mainly in South East Asia where many oil wells in SEA are maturing and will require maintenance; this is where the use of liftboats is needed. Its share price has fallen drastically due to Swiber’s events as well...

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