Analysis on Tat Seng Packaging Ltd

Tat Seng Listed on SG Mainboard on 07 Sept 2001

Financial Data

Yr                  Earning/Share                  Revenue              Net Profit % Margin
2013                  7.53c                          215.601 mil              7.7%
2012                  4.92c                          179.857 mil              2.9%
2011                  2.83c                          166.811 mil              2.56%
2010                  3.96c                          153.284 mil              4.24%
2009                  4.74c                          113.361 mil              6.95%


Other Data (as at 31 Dec 2013)

Cash Bal: 23.125 mil
Debt:

• Current: 37.458 mil
• L.T      : 5.994 mil

Shares Issued : 157,200,000
Treasury Shares : NIL
NAV: $0.5101
Gross Div Yield: 4.8%


Opinion

Being in a competitive industry, Tat Seng has managed to hold its ground against its competitor. With increasing gross revenue and net income, this counter will be good for long term holding, provided it can control its cost.

A need to take note is its current debt. Hopefully, this company do not need to raise additional capital to cover the debt.

Conclusion

Overall, the price of the stock is badly undervalued @ 26c. This company is good to accumulate for the long term.

DISCLAIMER The ideas expressed in this blog should not be used to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.

Strategy for 2014 Post Budget Announcement

What a day for our finance minister to announce the budget for 2014. There are a few point which has caught my eyes to formulate my strategy for the year. Below are the few points:

• Increase in Sin tax. http://sg.finance.yahoo.com/news/singapore-tax-sin-instead-wealthy-112408619.html
• No standoff from property cooling measures http://sg.finance.yahoo.com/news/singapore-says-too-early-relax-102434934.html
• Support for the construction industry http://sg.finance.yahoo.com/news/budget-govt-further-support-developers-085543209--sector.html
• Support for SME to upgrade http://business.asiaone.com/news/budget-2014-s500m-scheme-boost-smes-ict-adoption-rate, http://business.asiaone.com/news/budget-2014-pic-scheme-extended-until-ya2018, http://business.asiaone.com/news/budget-2014-more-support-singapore-companies-raise-funds

With the above support from the govt, we can look into a few areas for growth story and avoidance sector.

• Avoid property sector and Company that produce alcohol
• Look for companies that is less than 1.3bil in mkt cap as they are defined as Mid cap and small cap
• Blue Chips companies will not be in focus as their total operating cost will be increased due to increase in 1% CPF contribution. Thus avoid.
• Buying REITs only if it is undervalued and has more than 5.5% in dividend. This requires researching REITs 

DISCLAIMER The ideas expressed in this blog should not be used to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.

Portfolio: When to cut your losses?

I think this topic is the most difficult for ordinary investor whom are holding to losing position and thinking that the stock will come back to your original buying price, and then you will cut your stock to break even. I have learnt this issue the hard way. Holding to losing position for years! You're right that you need years to break even while other stocks are zooming away. Shown below is a table that estimate the percentage you need to recoup:

Drawndown                     Gain to recovery
5%                                        5.3%
10%                                     11.1%
15%                                      17.6%
20%                                      25%
25%                                      33%
30%                                     42.9%
40%                                      66.7%
50%                                     100%
60%                                      150%
75%                                       300%
90%                                      900%

Source: http://www.youtube.com/watch?v=2srWG3L5z9I

Thus with the table shown above, we can use 5-15% drawndown as a base guide to stop our stock form bleeding.

As an active investor, a weekly monitor of stocks performance is required. This will let us have a peace of mind in managing our stocks.



DISCLAIMER The ideas expressed in this blog should not be used to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.

Fundamental Analysis on Amara Holdings

Amara Holding listed on 10 July 2000 on Mainboard,
                                      15 Aug 1997 on Sesdaq

Financial Data

FY          EPS          REV      Net Income    Free Cash        Net % Operating
             (cents)       (mil)           (mil)               (mil)                      Margin          
2012      5.10         90.3         29.426             15.226                32.60                  
2011      5.84         62.1         33.673             11.443                54.23                  
2010      2.83         61.688     16.353             10.346                26.51                  
2009      1.95         102.679   11.255             22.373                10.96                  
2008      2.08         71.429     11.985             27.026                16.78                  

Ave        3.56         77.64                                                          28.216
(5yr)  

Other Data

Cash Bal : 11.486 mil
Debt (current): 12.704 mil
         (LT)     : 201.919 mil

Shares issued: 579936000

NAV: 50.24c

Div Yields : 1.1%
Div Payout Mth: June

Div Payout (2013 / 2012 / 2011 / 2010 / 2009) : 0.6 / 0.6 / 0.5 / 0.5 / 0.5
(cents)

Opinion

I chance upon this stock while doing my daily scanning for trading. Amara Holding is from the hospitality sector and have been listed on the Singapore Exchanges for more than 10 yrs. Thus i have carry out research on the fundamentals of this company. Looking at its 5 yrs data the company revenue whipsawed as there is no consistency in earnings. Operating margins remains healthy. However, its debt outstanding is a case for concern and most probably will be looking for financing for the next 12 - 24 mths.

Conclusion

With its book value at 50.24c (TTM), its estimated FY 2013 will probably be around 2.2 - 2.6 cents. Given that it is trading at 56c, this counter is now trading at 10% premium. The PE is at 11 which look fairly valued.

Should you have this stock, it would be wise just to HOLD.

DISCLAIMER The ideas expressed in this blog should not be used to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.

Avenues for Raising Funds for Companies with Poor Liquidity

What are the avenues that a company can do to raise funds to pay off current debts? They are as follows:

• Borrow from Banks
• Issues Bonds
• Sell Part of the Business
• Private Placement to Financial Companies
• Shares offering to Institution / Existing Shareholder
• Rights Issues

DISCLAIMER The ideas expressed in this blog should not be used to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.

Using CURRENT RATIO in your Google Scanner

Investopedia explains 'Current Ratio'

The ratio is mainly used to give an idea of the company's ability to pay back its short-term liabilities (debt and payables) with its short-term assets (cash, inventory, receivables). The higher the current ratio, the more capable the company is of paying its obligations. A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point. While this shows the company is not in good financial health, it does not necessarily mean that it will go bankrupt - as there are many ways to access financing - but it is definitely not a good sign.

From the above, we will have an idea that Current Ratio < 1 are companies that have pay-back problems. This type of companies, we'll try to avoid. Thus, one of the screening criteria that i have use in Google Scanner is as follows:

Mkt Cap : 100M to Max
Div Yield: 5-15
Current Ratio < 1

DISCLAIMER The ideas expressed in this blog should not be used to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.

Criteria for Fundamental Scanning on Google Finance

In scanning for new ideas using google finance, what are the criteria to use to filter out unwanted stocks? There are many different type of investors in this world with different portfolio. What i uses is basically to suit the Growth and Dividend style investor.

Thus the criteria that i uses are as follows:

• Mkt cap: 100M - 56B
• Div: 5 -10%
• Book Value: 0-1
• Total Debt/Equity Ratio: 0-30%
• ROE: 8-50%

Explanation for the following criteria are as follows:

Mkt cap - We choose companies that have a minimum 100M in mkt capitalization. This is to ensure that the companies can survive any downturn in economy.

Div - A dividend of 5- 10% is to ensure that we as investors received the proper returns as we invest in the company selected. Using the 10-yr treasury yield as a risk free reference, investing in stocks takes risk. Thus by demanding a higher yields we can satisfy the risk as an investor take.

Book Value - Book value refers to the worth of a company should it wind up with all debts paid down. This value i have chose to 1 as it means looking for companies which is less than $1. You can play with more than 1 should you feel that u can invest in higher worth companies. By looking the book value, and comparing with the mkt price, we will know whether the company we have chosen are undervalued or overvalued.

Total Debt/Equity Ratio. This ratio tell us the total debt that a company is carrying against its equity. If it is more than 100%, this means that the company is borrowing heavily to sustain its operation. This is a BIG NO for investors and we need to avoid companies that has BIG BORROWING. I'll limit it to 30% of a company's equities.

ROE or Return on Equity measures the corporation profitability by revealing how much a company generates with the money. I've set it to 8% as a minimum. Any lower will probably affect the dividend payout.

DISCLAIMER The ideas expressed in this blog should not be used to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.