Tuesday, February 28, 2017

Minor SGX Portfolio Adjustments

So, just wanted to announce some small changes that I've made to my portfolio.

I've finally cut off a sore spot in my portfolio, and that is Asian Pay TV Trust. It was one of my first few purchases and it was doing well in the beginning, probably right up until the point where I decided to just let it run auto-pilot. One thing to note is that I never believed that it was a growing company. My thesis for investing in it is just recurring income from a stubborn customer base. I don't even watch cable myself. However, it seems like I underestimated how quickly people will move away from the paid TV model.

By the way, if you watch cable TV from Starhub or Singtel, you are a real dinosaur.

I was actually going to load up a ton more of APTT when it was recently sunk to under $0.40, but I kind of let that opportunity slip past me (I blame my Korea trip!). If I had entered in then and average down my position, I would be exiting in profits because in less than a month, the share price has rocketed up almost 30%! The steep rise in the share price has got me a bit suspicious, so I decided to finally let go of my holdings at $0.49.

My final loss in APTT is 8% including all the dividends (or should I say, return of capital) that they have been giving.

I guess the lesson to be learnt here is that you can really underestimate how badly things can go for a bad business (I never considered APTT as a quality company).

Next up, I've added slightly to my position in HPH Trust. The dividend yield is eye popping, while I think the shipping industry is making a very slow turn around. I have got to say that the main thing for me is probably the ridiculous P/NAV discount and the yield that it spits out.

Finally, I took up positions in Singpost. Singpost has dropped to $1.39 from its peak of $2.15 just in early 2015. That's a 35% decline. Things has worsened a bit for the company, especially in its outlook and also its acquisitions, which is probably why the stock price has dropped.

Yahoo lists its EV/EBITDA as 12, but for some reason (probably shitty math), I got 17.5 when using 9m figures, haha. P/NAV is only a 80% instead of a whopping 180% in early 2015! I was pretty sure that the run up from early 2014 was entirely due to the "Alibaba effect".

ASSI wrote about Singpost recently, and Bruce from My Financial Freedom Journey has a nice valuation graph over time.

The baseline dividends that I'm looking at is 4c a year, down from the 6.5c in 2016, but at the price of $1.39, that's 2.8%, or almost 3% a year, looking at extreme scenarios. I think 6c is a more likely number, which is 4.3% yield, but all this number guessing is just as good as me pulling rabbits out of a hat.

Personally, Singpost is a company that I quite like, and I think I am going to be a rather happy investor in the future. I'm not expecting a massive surge in stock prices or anything, but I think it's going to be a steady long-term performer!

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