Author: The Fifth Person

4 companies with stock catalysts you need to know (part 1)

A stock catalyst is a revelation or event that causes the price of stocks to move. Such events break the stock price momentum and allow investors to unlock value that the market has previously failed to realize. In this two-part series, we will be highlighting four stocks that are positively affected by near-term catalysts. 1. Neratel – Phenomenal Gain from Divestment Divestment Windfall for Shareholders NeraTel announced the sale of their Point of Sale (POS) payment business for a consideration of $88.0 million to Paris-based Ingenico Group. The $88 million offer represents a 31.3x FY15 P/E valuation and accounts for...

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The Yahoo “tell”: Is the tech stock boom at the top?

In poker, a “tell” is an unintentional or unconscious action that may (or may not) indicate an underlying intention… for example, a poker player may betray himself by (say) scratching his nose when he’s holding a great hand. In markets, a “tell” is something that – usually in hindsight – signifies a turning point. We might be approaching a “tell” for tech stocks, which have seen a huge bull market in recent years. As shown below, since the global economic crisis, two of the most tech-heavy indices in the world – NASDAQ in the U.S. and the Shenzhen stock...

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3 investment strategies that might do better than dollar-cost averaging

Dollar cost averaging has been around for a long time and has this is a commonly adopted practice among both retail and professional investors. What is Dollar Cost Averaging? Dollar cost averaging is a strategy where the investor places a fixed dollar amount into an investment vehicle (stocks, bonds, mutual funds, etc.) on a regularly recurring schedule, regardless of the share price. Dollar cost averaging “forces” the investor to follow a disciplined method when making investments. Due to the fixed dollar (total) amount invested each time, the investor will buy more shares when the market is lower and fewer...

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Singapore economy grew by 1.8% on-year in 1Q; 2016 GDP growth forecast kept at 1.0-3.0%

The Singapore economy grew by 1.8% on a year-on-year basis in the first quarter, unchanged from the previous quarter, says the Ministry of Trade and Industry this morning. On a quarter-on-quarter seasonally-adjusted annualised basis, the economy expanded by 0.2%, slower than the 6.2% growth in the preceding quarter. The ministry is also maintaining a GDP growth forecast for 2016 at 1.0 to 3.0%. “The global economic outlook has weakened since early 2016, with global growth for the year now expected to be broadly similar to that in 2015. In particular, the growth outlook for the advanced economies has deteriorated...

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Searching for moats: Alphabet (Google) and how it dominates the search industry

In light of our earlier article on Facebook, we now move on to another company that has a significant economic moat: Alphabet – the parent company of Google. What is more powerful than having a brand inducted into the dictionary as a verb? Google has effectively monopolized the online advertising market, facing legal battles in Europe over its dominance in the market. Alphabet is perhaps one of the easiest companies to identify a moat due to its overarching dominance in its respective market. Industry Google has total dominance in search but in the broader technology industry they do have...

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3 things investors should know about Nera’s sale of its payment solutions business

If you’ve been a reader of The Fifth Person for some time, you might already be familiar with Nera Telecommunications and our past coverage of the tele- and info-communications company. We first got interested in Nera primarily due to the potential growth in its recurring revenue streams when it first entered the payment solutions segment. As investors, we love to see stable, recurring revenues in a company – it gives us a form of predictability and the market generally tends to favor and place a premium on companies that have high recurring revenues. Victor Chng attended Nera’s FY2013 and...

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Singapore 1Q domestic wholesale trade slips 22.6%

Singapore’s domestic wholesale trade shrank in 1Q this year by 22.6% from a year ago, partly as a result of lower weaker prices of petroleum and chemical products, according to data released by the Singapore Department of Statistics on Friday. The shipchandlers & bunkering, petroleum & petroleum products, and general wholesale trade sectors experienced the sharpest y-o-y drops in domestic sales of 39.9%, 38.2% and 34.3% respectively. Excluding petroleum, domestic wholesale trade fell by 11.4% as opposed to 1Q15. Overall domestic wholesale trade chalked a smaller y-o-y decrease of 1.7% after adjusting for price changes. Compared with a quarter...

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NeraTel to sell its payment solutions business to Ingenico Group for S$88 million

Proposed transaction will unlock shareholder value and streamline Nera’s business activities Nera expected to record a disposal gain of approximately S$71.5 million upon closing, a significant portion of which is intended to be paid out to shareholders Shareholders to vote on the proposed sale at an Extraordinary General Meeting expected to be held in Q3 2016 Nera Telecommunications (Nera) today announced the proposed sale of its payment solutions business to Ingenico Group S.A. (“Ingenico”) for S$88 million. Ingenico, with the world’s largest payment acceptance network, is the global leader in seamless payment, providing smart, trusted and secure solutions to...

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Don’t buy that stock! Until you answer these 3 questions

Figuring out a stock to buy – according to legendary investor Peter Lynch – should take at least as much time as you’d take to decide what refrigerator you should buy. The thing is, few people do. Last week, we talked about three questions you should ask yourself before you buy an asset – whether it’s a stock or a beach house or a fridge. Those questions are a good place to start. But when you’re buying a stock, there are a few more questions to ask before you begin to dig more deeply. The wrong answer to any...

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Seven unforgettable lessons from your first $10,000 credit card debt

It’s much better if you learn these lessons without amassing a huge credit card debt. For a fair number of young Singaporeans, the first major financial shock comes in the form of a credit card bill. Most people aren’t aware of just how quickly uncontrolled spending will add up – and paying off that first S$10,000 debt becomes a rite of passage. But as the old saying goes, fools learn from experience, while wiser people learn from the experiences of others. Whether or not you have a S$10,000 credit card debt, these lessons are worth knowing: 1. You Will Fail...

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15 things I learned from NeraTel’s FY2015 AGM

Nera Telecommunications Limited (SGX: N01) (NeraTel) offers a range of products and services in the areas of wireless infrastructure networks, satellite communications, network infrastructure and payment solutions. NeraTel’s growing payment solutions business and its potential recurring revenue growth was what piqued our interest in the first place. We attended NeraTel’s FY2013 AGM and FY2014 AGM previously to find out more about the company and this year was no different – we went for the AGM again to gain new insights on NeraTel. So here are… 15 things I learned from NeraTel’s FY2015 AGM: Before the AGM proper got underway, CEO Samuel Ang...

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Two great reasons why it’s now time to invest in this market

If you based your investment decisions solely on recent news headlines and stock market performance, Singapore does not look like a great place to invest. The economy is not growing – economic growth was zero percent for the first three months of the year. Deflation is a concern, with prices falling for a record 17 months in a row. Real estate prices are falling. Global trade is slowing. China, Singapore’s largest import and export market, is a big source of uncertainty. Singapore’s stock market has not been a world-beater for a long time either. Including dividends earned, the STI is...

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Oil to fall back to US$35 on supply, demand imbalances, say analysts

Oil, which slid from a six-month high at just over US$48 ($65.5) a barrel on April 28, has remained well-supported after an ongoing wildfire in Alberta, Canada, took out at least one million barrels in daily production capacity, or about a third of the country’s daily production, reports said. Brent crude was trading at US$45.70 per barrel on May 9, which is up by more than 20% since the start of the year. Oil prices have rebounded as a result of falling US production in recent weeks, with many shale producers forced out of business when prices fell to...

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The impact of negative interest rates

In January the Bank of Japan (BoJ) became the fifth major central bank to embark on negative interest rate policy (NIRP) in the hope that progressively lower interest rates will encourage bank lending and consumer spending to drive growth and inflation dynamics higher. While we acknowledge that there may be some near-term positives of NIRP, notably through expanded credit creation, our research suggests that there may be a number of potential unintended consequences which may weigh on the broader economy over the longer-term. This month we discuss some of our concerns around NIRP. What are the consequences of NIRP?...

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33 things I learned from Berkshire Hathaway’s annual shareholders meeting 2016

I always hesitated to attend Berkshire Hathaway’s annual shareholders meeting for many years for one simple reason: Berkshire’s meeting always clashed with the bulk of local AGMs in Singapore – many of which I attend. But finally, I decided to head to Berkshire’s meeting this year on an invitation from my friend, Mark, who advised me to do so before Buffett kicks the bucket (hopefully not anytime soon!). So I flew all the way to Omaha, Nebraska to attend probably the longest AGM I’ll ever sit through (over seven hours long — and I arrived two hours earlier to...

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