Author: The Fifth Person

7 Things I Learned from Cordlife’s AGM 2015

Cordlife Group Limited is a fast-growing company with an annualized revenue growth rate of 28.8% for the past three years. Number of clients also grew 33% to 21,085 in 2015 from the previous year. Those are impressive numbers, but what is Cordlife’s nature of business? Cord blood banking. When a baby is born, the umbilical cord that is cut after delivery contains cord blood. Cord blood is a very rich source of hematopoietic stem cells. Cord blood stem cells are currently used to treat blood and immune system related genetic diseases, cancers, and blood disorders. Due to its numerous...

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Open Letter to Zagro Asia about Proposed Voluntary Delisting

Zagro Asia released a formal proposal to seek the voluntary delisting of the Company which I think greatly undervalues the company. I have sent an open letter to company reflecting my stance that the offer should be revised upwards to reflect the true intrinsic value of the company. The original letter can be found here. Open Letter to Zagro Asia about Proposed Voluntary Delisting The proposed voluntary delisting at 30 cents came as a surprise to us. It deeply undervalues what is an intrinsically high quality business. In our opinion, a conservative appraisal of Zagro Asia would yield a valuation...

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5 Economic Moats I Look for in a Company Before Investing

“In business, I look for economic castles protected by unbreachable ‘moats’.” – Warren Buffett Warren Buffett popularized the term “economic moats”, defining it as a business’s ability to sustain competitive advantages in its industry. This article delves into the details of his definition with examples of familiar companies for context. In medieval times, moats were designed to protect castles, it was what deterred or hampered invasions. Reapplying and modifying this definition to a corporate finance context simply means that the castle would be the firm, the moat would be its competitive advantage, and the invaders would be their competitors....

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5 Reasons Why I’m Bullish on the U.S. Economy & the S&P 500 ETF

I covered the advantages of the S&P 500 ETF and how you can own the top 500 U.S. companies with just one ETF in my previous article. The growth of the S&P 500 is closely related to the growth of the overall American economy, so now let’s do some fundamental analysis and the recent performance of the broad U.S. economy in GDP terms before we consider its longer term context. The U.S. economy did well for the second quarter of 2015. The Bureau of Economic Analysis (BEA) reported that the U.S. grew by 3.9% in the second quarter from the previous quarter, beating expectations of 3.7%...

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How to Invest in the Top 500 U.S Companies with the S&P 500 ETF

The SPDR S&P 500 ETF (NYSE: SPY) is the oldest and most successful ETF in the world and tracks 500 of the most successful companies in the United States across various sectors. Find out more about ETFs: A Simple 4-Step Introduction to ETFs In my opinion, SPY is the most cost-effective method to gain exposure and ride on the economic growth of the U.S. For those of us who are bullish on the U.S. in general but don’t know which particular U.S. stock to buy, then going with the SPY might be your best choice. The table below provides the...

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SIA Engineering Posts 5.7% Rise in 2Q Earnings to $44.5 million

SIA Engineering posted a profit attributable to owners of the parent of $44.5 million, or 3.96 cents a share, for the 2Q ended Sept. This was $2.4 million, or 5.7%, higher than the same quarter last year. Revenue fell 6.7% to $266 million, with lower airframe and component overhaul and fleet management revenue, partially mitigated by higher line maintenance revenue. Expenditure at $239 million was $30.3 million, or 11.3%, lower, owing mainly to a drop in subcontract, staff and material costs. As a result, operating profit improved $ 11.1 million, or 69.8%, to $27 million. Share of profits from associated and joint-venture companies was $18.7 million and to 10.4 million respectively. Contributions from...

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5 Ways You Can Earn Yourself an Early Retirement

If you’re like me, going into the fourth decade of your life, the topic of retirement becomes as engrossing as figuring where all your rock-hard abs from your twenties have gone. In your youth, you never think you’d lose your pace, vitality and energy like those old geezers – until it hits you as well. Similarly, financial planning and retirement hardly crossed my mind as I bundled full force into my career, making and spending money as fast as I could. It only hit me recently in the last few years that retirement, (the “r-word” I only associated with my...

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12 Things I Learned from Silverlake Axis’s AGM 2015

In August, core banking software provider Silverlake Axis was cut by a ‘razor-sharp’ short-seller report that caused the company’s share price to decline by half and wipe out a billion dollars’ worth of value practically overnight. The report’s anonymous author ‘razor99’ accused Silverlake Axis of creating a cycle of corporate tunneling fraud via related party transactions with the founder and chairman’s, Goh Peng Ooi, privately-owned group of companies. The Silverlake “Scheme” in the short-seller report by razor99 As the share price of Silverlake Axis crashed and shareholders likely suffered many sleepless nights as there was no clear and detailed...

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Mapletree Greater China Commercial Trust’s 2Q DPU Up 12.6%

Mapletree Greater China Commercial Trust’s (MGCCT) 2Q DPU rose 12.6% to 1.808 cents despite a volatile market environment. Distributable income rose 14% to $49.5 million, while net property income rose 26% to $69.5 million for the period. DPU for the half year ended September increased 10.7% to 3.499 cents. The better performance was mainly due to the new contribution from Sandhill Plaza, rental reversions from Festival Walk and Gateway Plaza, as well as better cost management. Despite the volatility of the Chinese stock market that affected the overall retail environment in Hong Kong, Festival Walk delivered 20.9% and 21.2% growth...

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A Simple 4-Step Introduction to ETFs

On 22 January 1993, State Street Global Advisors launched the first ever exchange-traded fund or ETF. The Standard & Poor Depository Receipt (SPDR or “spider” for short) tracked the S&P 500 index and allowed investors everywhere an easy way to invest in 500 of the most successful U.S. companies with just one stock. If you invested in these 500 companies individually, the transaction fees alone would cost you thousands of dollars (not including your capital outlay). But with the ETF, you can have a stake in all these great companies for just US$200. Today the SPDR S&P 500 ETF...

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SIA Engineering: What You Need to Know About its Business Before You Invest

Photo: SIA Engineering Company SIA Engineering Company (SGX: S59) is a stock that has always been on my watch list. As the market leader for aircraft maintenance and repair in Singapore, they seem to be a business that’s not only recession-proof, but also one that has built a reputation of providing world-class standards of safety and deliverability over the years. I mean… who else wants to fly in an aircraft that’s not properly maintained or undergoes substandard checks? In the aviation industry, safety is everything and there is no room for compromise. SIA Engineering’s reliability and reputation is well-known...

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SGX Posts 28% Rise in 1Q Earnings to $99.3 Million on Derivatives Growth

Singapore Exchange reported its highest quarterly earnings in about seven years, boosted by a strong performance in the fast-growing derivatives business. SGX posted a 28% rise in earnings to $99.3 million, or 9.3 cents a share, for the first quarter ended September, from a year ago. Bloomberg consensus estimates were for earnings of $93.3 million on the back of $219 million in revenue. Operating revenue rose 30% to $219.6 million, following growth in all its businesses apart from issuer services. Securities revenue increased 14% to $55.9 million and accounted for 25% of total revenue while derivatives revenue increased 69% to $90.9 million...

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2 Examples of Why You Must Challenge Your Confirmation Bias When Investing

Investopedia defines confirmation bias as: “A psychological phenomenon that explains why people tend to seek out information that confirms their existing opinions and overlook or ignore information that refutes their beliefs. Confirmation bias occurs when people filter out potentially useful facts and opinions that don’t coincide with their preconceived notions.” For example, if we start out with the preconceived notion that Apple is a great stock, we will selectively seek out confirmation (from news, analysis, reports, etc) that prove to us that Apple is a great stock. Even if we read reports of the new iPhone sales being a...

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InvestX Congress 2015

InvestX Congress returned with a bang in 2015 as over 500 people joined us last Saturday, 17 Oct, at Suntec Singapore Convention Centre to come together and learn how to make more profitable investment decisions and become better investors. The sold-out event kick-started at 9AM with Rusmin Ang, co-founder of The Fifth Person, as he talked about how to invest in dividend-growth stocks and how to generate stable & growing dividends from your investments year after year. Rusmin must have done a fantastic job as he was literally swamped (ambushed!) with attendees who continued to ask him questions and...

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A Simple Guide to How Market Liquidity Affects Your Investments

In his regular letter to Oaktree clients, Howard Marks wrote about market liquidity and its potential dangers investors often overlook. I highly encourage readers to read it as it points out various key issues on liquidity and behavioral economics. One of the key quotes from Marks sums up this entire article:  “Liquidity is ephemeral: it can come and go.” What does Howard Marks Mean by That? When analyzing key risks in any security, liquidity would always be one factor amongst the endless list of risks involved. Investors usually glaze over liquidity and look at more substantive risks such as...

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