Tuesday, April 24, 2018

This Blog Is 3 Years and 1 Month Old!

After the last post on My Random Talks, I got a lot of encouragement, compliments as well as positive comments from readers on IN and also the particular comment below from the blog. Really appreciate all the comments!

Comment from My Blog

Nevertheless, this was also a time to reflect on how I have been writing my blog posts. I have decided NOT TO NAME the counters I am writing. Rather than telling readers the company's name directly, I hope readers can focus on the reasons I invested in that counter.

I believe this will be more similar to my objective of starting Fundamental Scorecard - to spread the knowledge of fundamental investing. In addition, since I am also promoting the Fundamental Scorecard website subscription, this could be more appropriate.

Having said all that, there will definitely be hints along the post on which counter I am talking about. Furthermore, I will still continue to reveal my portfolio every quarter. So look out for them!

Moving forward, I intend to selected some major ideas and move into consolidation mode. I will call them Big Ideas! It should be focus around 6 or 7 counters and I should have already vested/talked about them.

That's all!

Once again, thank you for all the support over the last 3 years!

If you are interested to know more about The Ultimate Scorecard or Full Analysis, do visit the Fundamental Scorecard website for more information! Do sign up to get the latest scorecard of all the SGX counters now!

You can also purchase a copy of our Guide to SG Stock 2018 for only $8 via this link.

Oh... and do remember, please like our Facebook page (T.U.B Investing) and follow me on InvestingNote.

Sunday, April 22, 2018

My Random Talks

Recently, it seems that more people are "unhappy" with the way I blog. Maybe it is because I appear to be saying 1 thing and doing another. And of course, my promotion of the Fundamental Scorecard. 

It is certainly quite hard being a blogger, and trying to satisfy every single reader. Sometimes I wonder if I said too much, and being too honest about everything. 

Anyway, FYI, I don't earn big bucks from blogging. I am just trying to share what I found out and to be responsible to what I said.

Then again, I am quite happy with how these anonymous are commenting. This meant that my reader outreach have been increasing! Next time, it will be good to put your name. So I can address you directly or even meet up with you.

So with the above thoughts, I felt that, might as well, I do not reveal what this next company I intend to talk about. 

I will just show you this research I had done.

Research on The Company
This is solely on 1 quarter of the company's income statement as well as its competitors. I am just amazed how well it had done compared to its competitior.

Do note that its' revenue had been increasing over many years and gross margin had been increasing as well.

In Short

I have actually wrote and is currently vested in this company. I will be looking to adding to my position.

If you are interested to know more about The Ultimate Scorecard or Full Analysis, do visit the Fundamental Scorecard website for more information! Do sign up to get the latest scorecard of all the SGX counters now!

You can also purchase a copy of our Guide to SG Stock 2018 for only $8 via this link.

Oh... and do remember, please like our Facebook page (T.U.B Investing) and follow me on InvestingNote.

Saturday, April 21, 2018

The Dilemma

Since I have been such a supporter of  M1 Ltd in my previous posts, I suppose I should announce that I have sold all my holdings in the company. Nevertheless, due to this action, I had friends questioning if I had become a trader? So HAVE I?

Today, I managed to converse with a trader and an investor. They gave me 2 different perspectives that is the exact opposite of each other. Do note that both of them are making money currently.

Picture taken from Quora

Trader's comment:

I have a small capital. Thus, trading is the way for me. Contra trade do not need capital. I only trade blue chips or REITs, and I place a stop loss and target price for every trade, so I wouldn't hold any trade.

I do invest, as well, for mid term (2 to 3 months) and long term (6 to 8 months). Usually I try not to hold a share for too long, unless I feel it has the potential to be a multibagger.

The market is very volatile right now, most people will take profits and protect profits. There's a saying, "if you don't take your profits, the market will take it back from you".

I feel that this is the mindset of most people who are in the stock market. Sayings such as 'letting your winners run' doesn't apply anymore.

Investor's comment:

An investment operation is one which, on thorough analysis, promises safety of principal and a satisfactory return. - Benjamin Graham.

I believe "no matter what size your capital is, this is the rule of investing".

Switching to a trading mindset to earn a higher percentage is a flawed thinking. It's because of small capital that preservation and proper investing is critical.

Furthermore, compounded interest need time to work. You have to know that you are buying a company and it need time to work and earn money to become a multibagger.

If market offer you the convenience of being able to get a quote on company you own, don't turn this into a disadvantage being influence by the nonsensical quotes of the market. Use it to your advantage, buy when a good company is cheap.

*Do note these are real quotes I have taken from our conversation and are amended to be more smooth-flowing.

In Short

A trader focus on price and profit, while an investor focus on company, value and capital. I still stand by, maybe including my bias, more towards an investor mindset.

I believe in finding out the value of the company. I do not draw any lines on the company's share price chart. Rather, I really like to look into a company's financials and understand how a company make its money.

However, on holding period, I also have this view that when an investor buys a company, he has to have a long term view. A long term view will allow you to not make rash decision and hold on to your beliefs and view if the share price falls.

But if the company's share price suddenly rise too much, then I think you can still sell it even if you only held on it for a few months.

Regardless, I sold M1 mainly because I want to focus more cash into companies that pass Fundamental Scorecard. My portfolio has been heavily supported by companies that pass Fundamental Scorecard currently. Thus, I intend to put more capital into this area.

With that, I like to have a final word on today's post - any method that makes money is a good method, including any trading methods. 

If you are interested to know more about The Ultimate Scorecard or Full Analysis, do visit the Fundamental Scorecard website for more information! Do sign up to get the latest scorecard of all the SGX counters now! Only about 3 plates of chicken rice per month (One of my subscriber told me to say this)!

You can also purchase a copy of our Guide to SG Stock 2018 for only $8 via this link.

Oh... and do remember, please like our Facebook page (T.U.B Investing) and follow me on InvestingNote.

Monday, April 16, 2018

Review Of M1 Limited Q1 Results

Before I go into the main topic, I will like to clarify some queries on Fundamental Scorecard website.

People had asked if Fundamental Scorecard requires users to key in any data? 


I like to use this opportunity to clarify that THE ANSWER IS NO! Fundamental Scorecard website's data is already pre-loaded. Eventually each counter will have its own report with the scoring from the pre-loaded data. You do not need to key in any information!


Ok...back to the main topic.

M1 Limited (aka M1) just released its Q1 report this evening.

Basically, revenue and net profit remains flat.

But I like to bring reader's attention to the following 2 slides:

Revenue

Cost of Goods Sold

If we compare the revenue between Q1FY2017 and Q1FY2018, Mobile Services had increased from $137M to $141M. Fixed Services had also increased from $28M to $32M.

Then if we compare the Cost of Goods Sold (COGS) between Q1FY2017 and Q1FY2018, Fixed Services' COGS remains flat despite a higher revenue. 

This is also in line with the recent Moltey Fool's article on M1.

Therefore, in accordance with my previous article, my belief that Fixed Services will most probably be the determinate for FY2018 revenue is still intact.

Nevertheless, it is important to consider the extract below of a conversation I had with an IN member.

Screenshot from IN
If this is true, how will the revenue turn out in future? That will be an interesting pointer!

In Short

After this short review, I will stay vested FOR NOW in view that the counter is still CD currently and only turn XD on 18 April 2018. I want to receive the dividends first before I decide on further actions.

Please do your own due diligence before you invest this counter.

If you are interested to know more about The Ultimate Scorecard or Full Analysis, do visit the Fundamental Scorecard website for more information! Do sign up to get the latest scorecard of all the SGX counters now! Only about $10 a month!

You can also purchase a copy of our Guide to SG Stock 2018 for only $8 via this link.

Oh... and do remember, please like our Facebook page (T.U.B Investing) and follow me on InvestingNote.

Friday, April 13, 2018

What's My Current View On The Trendlines Group Ltd?

This article may have came a bit too late.

I felt I have to write another article about The Trendlines Group Ltd (Trendlines) after my last post on them, as well as my very bold estimation of Trendlines on IN.

Screenshot from IN
But since the last post and estimation, Trendlines share price has been on a downtrend on a prolong period.

Screenshot from IN
I am not sure if the post or estimation have influenced anyone to purchase Trendlines. Nevertheless I still felt that I had to be responsible and thus, I will write out my current thoughts on Trendlines.

First of all, I will like you to know that I am still vested in Trendlines (about 2.5% of my portfolio).

Why am I still vested? If you had read my previous post on Trendlines, other than point 1*, all the other positive points are still relevant. Some of these points, as elaborated below, have become even more advantageous!

*CEOs did not continue to purchase Trendlines and the company also did not made any share buybacks.

1. Their dividend policies have become clearer with recent new on Stimatix. Stimatix will provide recurring income for Trendlines and in return dividend for the shareholders. Do note that Trendlines owns 28.2% of Stimatix and a payout ratio of 90% of dividend payments received from royalties.

2. Collaborators! Other than B Braun Melsungen AG, Trendlines also have many other extensive partnership collaborators!

Trendlines Investor's Powerpoint

3. Companies born out of Trendlines lab are not within its balance sheet yet! These companies will eventually bring in profit and will definitely boost its asset within the balance sheet. Thus, the balance sheet is actually still understated!

Trendlines Investor's Powerpoint

4. News, news and news! Recently, an IN friend have actually found some news on the Trendlines' portfolio companies that are not explicitly announced and here they are:

Regardless of the above positives, the RISKS that I stated in the previous post still exists too: (1) Overstating of the value of their portfolio company and (2) having failed portfolio companies being written off in future. This could produce losses that will definitely impact the share price negatively.

So what is the Fair Value?

Recently, many of you will have notice the changes in how I view a company recently. I will always try to look for a REASONABLE fair value. For Trendlines' share price, the management had compared against other industry comparables as per its investor's powerpoint slide.

Trendlines Investor's Powerpoint

But I felt the share price calculation should be based on dividend instead. This is because I felt dividend will eventually become the main catalyst for Trendlines over the next 2 years.

So the amount of dividend I calculated is....0.3 cents! This is only about 2.5% dividend yield based on the current share price.

This is based on the estimation of the following -

1. Dividend Payout of 90% of dividend distribution of about US$800k

2. Dividend Payout of 40% of an Exit Event where the net cash after tax distributable proceeds paid to Trendlines for the financial year is at least US$2 million.

Finally, one must also take note of the following taken from the recent annual report and announcements:

1. In August 2016, Medical received a dividend distribution from the Portfolio Company in the amount of approximately 897, the dividend distribution representing Medical’s share of a portion of the cash consideration received from the Licensee.

2. In addition to a dividend which was received subsequent to the initial closing in November 2014, Trendlines Incubators Israel Ltd., the Group’s wholly-owned subsidiary, has additionally been paid approximately US$1.6 million in dividends, to date, upon Stimatix’s completion of the relevant milestones.

3. On September 29, 2016, the Group sold its holdings in E.T.View (including options). The Group received consideration in the amount of 3,700, of which 2,100 is recorded in gain from disposal of investments accounted for under the equity method and 1,600 in gain from change in fair value of investments in Portfolio Companies.

4. In June 2017, the Group completed the sale of its holdings in Biosight LTD. The Group received consideration in the amount of 1,300 and recorded realized gain from change in fair value of investments in Portfolio Companies in the amount of $1,200.

5. On November 13, 2017, the Group completed the sale of its holding in MitrAssist Ltd (“MitrAssist) for a total consideration of approximately 1,150. The Group recorded realized gain from change in fair value of investments in Portfolio Companies in the amount of $1.1M as well as financial expenses in the amount of $0.5M with respect to repayment of the IIA loan relating to MitrAssist.

In Short

I understand that the current estimated dividend yield is quite low. Not even 3%. It could get even lower since the last few exits Trendlines had made is less than US$2 Million. Thus, these are more of the negatives that I believe investors should take note.

BUT I will still stay vested and may even buy more if the share price drop even MUCH MORE.

This is because I believe in the company's growth and it takes time for the revenue to grow. In the meantime, the dividend can "comfort your continuing patience".

I must also state that Trendlines has "not" yet given any dividend and their dividend policy must have well-thought through prior to announcing. Therefore, their current exits events could possibly be used to support their current operations, rather than for dividends. Nevertheless, Trendlines is not the usual business model and investors should not really used their current understanding to define this firm.

Investors will just have to wait for Trendlines to grow for at least 2 years before it become the multibagger we are waiting for.

Simple Investor SG and I will be having our next Coffee With Us on 17 April 2018. If you are interested in the event, do sign up via this LINKWe look forward to meeting you!

Oh... and do remember, please like our Facebook page (T.U.B Investing) and follow me on InvestingNote.