Author: The Fifth Person

The Asia Report episode 3: Value traps and how to avoid them

Hello, everyone. Today, we are going to be going through another episode of The Asia Report. And today, I’m going to be talking about value traps. It’s a subject that comes out a lot especially among value investors. I think before I actually go into the topic deeper, it’s probably best to give a simple definition with regards to what a value trap is. A value trap is essentially a stock that appears to be cheap because the stock has been trading in low multiples of earnings, cash flow, or book value for extended periods of time. The crux...

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5 things to know about the Lion-Phillip S-REIT ETF before you invest

Lion Global Investors and Phillip Capital are due to launch the Lion-Phillip S-REIT ETF on the SGX on 30 October 2017. (The Initial Offer Period is open now until 17 Oct for investors who are interested in subscribing early.) The ETF is the very first exchange-traded fund in the world that invests purely in Singapore REITs. S-REITs have been (and still are) a popular investment vehicle for investors seeking relatively high and stable dividend yield. The expected yield for S-REITs in 2017 is around 6%, and that’s just for dividends alone; the average year-to-date price performance for S-REITs is...

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9 things to know about DKSH Holdings before you invest

DKSH Holdings Berhad (Bursa: 5908) has a long history in Malaysia. Part of the DKSH Group from Switzerland, DKSH Holdings Berhad has its history dating back to 1867 in Singapore. The company was previously listed on Bursa Malaysia as Diethelm Holdings back in 1994. After a merger in 2002, the company was renamed as DKSH Holdings Berhad. Today, DKSH Holdings is one of the largest supply chain distributors in Malaysia. It serves many major brands in the sourcing, marketing, sales, logistics, distribution, fulfilment and after-sales services for their businesses in Malaysia. Here are nine things you would need to...

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7 things I learned from the 2017 QAF EGM

Investors may know that QAF Limited (SGX: Q01) is the maker of Gardenia bread – a household brand familiar with many Singaporean households. But some may not realise that QAF is also one of Australia’s largest producers of pork. QAF’s primary production business in Australia accounts for approximately 17% of the country’s pork production. In 2016, it generated a revenue of S$395.4 million, contributing 44.5% of QAF’s total revenue. Recently, QAF announced plans to list up to 49% of its primary production business on the Australian Securities Exchange (ASX) for approximately S$88.8 million. I attended the QAF EGM last...

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Warren Buffett’s $1 test and how to tell if a company is allocating its capital wisely

Companies small or big must make capital allocation decisions on a frequent basis to maximize returns for shareholders. But only a few companies in the world have excellent capital allocators at their helms, most companies are run by excellent operators who alone are enough to generate meaningful profits, which shareholders would find forgiving enough. Before a corporation invests in machinery, equipment, property or securities, like us they must make comparisons of returns that they’ll get when they allocate capital. These decisions are far more complex than personal decisions as they often involve a giant leap of faith into the...

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Looking for returns: Why investors often find themselves holding time bombs

It’s the single most important metric people look for and demand, yet often subconsciously overlooked. We oftentimes make decisions not caring about what our potential return might be – we carelessly take what we see at face value and invest our money in it. Worse, we might not even try to calculate our potential return before deciding to invest. “Oh look! SPH has dropped to multi-year lows similar to that of the financial crisis, I’m jumping in!” Sound familiar? While this decision may (or may not) yield good return, at the point in time when we haphazardly decide to...

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8 things to know about F&N Holdings Berhad before you invest

Fraser & Neave, Limited (F&N) (SGX: F99) is among the oldest companies in Southeast Asia. Its roots can be traced back to 1883. In that year, John Fraser and David Chalmers Neave formed the Singapore and Straits Aerated Water Company to venture into the aerated water business. It was also to diversify from their printing business under the Singapore and Straits Printing Office. Years later, in 1898, the two partners formed a new public company known as Fraser & Neave, Limited. The two businesses were then sold to their newly-formed company. In the 1930s, F&N had started to be...

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7 things to know about Eco World Development Group

Just a few years ago, if you have asked around Malaysia who are some of the largest property developers in the country, you would have never heard of Eco World Development Group Berhad (Bursa: 8206). Yet, since its reverse takeover of Focal Aims Holdings Berhad on Bursa Malaysia back in 2013, Eco World Development has grown into one of the largest property developers in the country with an estimated land bank of more than 8,000 acres in Malaysia. The company is also one of the fastest growing companies on Bursa Malaysia today, having seen its revenue grew from just...

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11 things you need to know about ComfortDelGro before you invest

It was just a dinner.  Or was it? The year was 2001. Two friends, Lim Jit Poh and Kua Hong Pak, met up for some sushi and sake at Unkai, a Japanese restaurant at the now-defunct ANA hotel in Nassim Hill. The meeting was kept a secret as it was more than casual. Little did anyone know that a simple dinner was the birth of one of the largest land transport conglomerates in the world. So, who are Lim and Kua? Back then, Lim was the chairman of Comfort Group. It was rich in cash reserves and had the...

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When to buy a stock: The 3 best times to buy stocks at a discount

If you study the Investment Quadrant, you realise that selecting a good company is only part of the equation. The final step is to buy a stock only when it’s trading at a low valuation. Remember, a good company can still be a bad investment if you overpay for it. So knowing when to buy a stock cheap is just as important as picking the right company if you want to earn good returns in the stock market in the long run. So when are the best times to buy stocks at a discount? Here are three scenarios I...

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10 things I learned from the 2017 AEON AGM

AEON has been my family’s favourite retail chain for the last couple of years as an all-in-one stop where we can purchase almost anything under one roof, even furniture! (Under its trademark Index Living Mall.) AEON runs departmental stores and supermarkets within it its own premises or as an anchor tenant in other malls (like at Mid valley Megamall). As at 31 December 2016, AEON operates 33 department stores and supermarkets spread across Peninsular Malaysia. It also manages three Max Value stores, three Index Living Malls, 48 Wellness pharmacies, and 39 Daiso bargain stores. I attended the AGM this...

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How to invest your CPF: 5 things you need to know

The Central Provident Fund (CPF) is a government savings scheme that requires Singaporeans and permanent residents to save 20% of their salary to fund their retirement, healthcare, and housing needs. The CPF pays an interest of 2.5% for savings in the Ordinary Account (OA) and 4% for savings in the Special Account (SA), Medisave Account and Retirement Account. An extra 1% interest is paid on the first $60,000 of your combined balance (including up to $20,000 from your OA). Most Singaporeans use their CPF to buy their homes but only a few know how to invest your CPF in...

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12 things I learned from the 2017 AmFIRST REIT AGM

AmFIRST REIT is a Malaysian commercial REIT with a portfolio of nine properties located in Klang Valley, Cyberjaya, Melaka, and Penang. As at 31 March 2017, its total net lettable space is 2.9 million square feet (excluding Summit Hotel). In 2016, AmFIRST REIT disposed the Ambank Group Leadership Centre (AGLC) to generate a one-off gain of RM12.2 million. AmFIRST REIT’s average annual return since its listing in 2006 is 6.02%. 2016 was a significant year for AmFIRST as it marked its 10th anniversary of listing on Bursa Malaysia. However, 2017 was another challenging year for AmFIRST due to an...

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The Asia Report Episode 2: “The ebbs and flows of the property cycle”

Ronnie Chan is chairman of Hang Lung Group and Hang Lung Properties. For more than 25 years, he has personally penned the shareholder letters. Under his guidance, Hang Lung successfully navigated the Asian Financial Crisis and emerged as one of the largest property conglomerates in Hong Kong. Listeners will find his commentary (written without the benefit of hindsight) especially useful in understanding the ebbs and flows of the property cycle. The insights gleamed from his letters has greatly improved my understanding, and it’s a pivotal part of my investment framework when it comes to looking at both property and property...

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8 things you need to know about MyEG Services

If you think about great investments in the past on Bursa Malaysia, companies like Public Bank, Dutch Lady Malaysia and Heineken Malaysia come to mind. These companies have returned its long-term shareholders many times their investments. In fact, a company like Dutch Lady Malaysia has returned about 130 times for its investors over the past 25 years! However, if I think about some of the more recent successes on Bursa Malaysia, the most obvious company has to be MyEG Services Berhad (Bursa: 0138). The company was only listed in 2007 and over the last 10 years has returned more...

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