STI Components Evaluation CY2008

If you feels like comparing the result of CY2008 and CY2009. Here are the data:

Company	Price (31/12/07)	Price (31/12/08)	Capital Gain	Capital Gain (%)	Dividend	Dividend Yield (%)	Total Yield (%)
Kep Corp	13	4.33	-8.67	-66.69%	0.69	15.94%	-25.38%
Jardine C&C	21.69	9.39	-12.3	-56.71%	0.46	4.90%	-25.90%
CityDev	14.2	6.37	-7.83	-55.14%	0.2	3.14%	-26.00%
Capitaland	4.613	2.507	-2.106	-45.65%	0.15	5.98%	-19.84%
CapitaMall	2.071	1.185	-0.886	-42.78%	0.1298	10.95%	-15.91%
ComfortDelgro	1.83	1.45	-0.38	-20.77%	0.0525	3.62%	-8.57%
SIA	15.229	9.866	-5.363	-35.22%	1	10.14%	-12.54%
Starhub	2.81	1.94	-0.87	-30.96%	0.18	9.28%	-10.84%
DBS	15.187	8	-7.187	-47.32%	0.8	10.00%	-18.66%
GoldenAgri	0.99	0.226	-0.764	-77.17%	0.013	5.75%	-35.71%
Wilmar	5.39	2.79	-2.6	-48.24%	0.054	1.94%	-23.15%
CoscoCorp	5.78	0.95	-4.83	-83.56%	0.07	7.37%	-38.10%
F&N	5.9	2.95	-2.95	-50.00%	0.135	4.58%	-22.71%
Genting SP	0.704	0.508	-0.196	-27.84%	0	0.00%	-13.92%
NOL	2.769	1.174	-1.595	-57.60%	0.14	11.93%	-22.84%
NobleGroup	2.025	1.02	-1.005	-49.63%	0.0248	2.43%	-23.60%
Olam	2.779	1.15	-1.629	-58.62%	0.025	2.17%	-28.22%
OCBC Bk	8.29	4.99	-3.3	-39.81%	0.28	5.61%	-17.10%
SembMar	4.04	1.68	-2.36	-58.42%	0.1016	6.05%	-26.18%
SMRT	1.62	1.59	-0.03	-1.85%	0.0775	4.87%	1.51%
SIA Engg	4.36	1.89	-2.47	-56.65%	0.21	11.11%	-22.77%
ST Engg	3.75	2.37	-1.38	-36.80%	0.1788	7.54%	-14.63%
SGX	13.265	4.925	-8.34	-62.87%	0.385	7.82%	-27.53%
SPH	4.32	2.93	-1.39	-32.18%	0.27	9.22%	-11.48%
UOB	19.7	12.72	-6.98	-35.43%	0.65	5.11%	-15.16%
SembCorp	5.69	2.21	-3.48	-61.16%	0.15	6.79%	-27.19%
Singtel	4	2.55	-1.45	-36.25%	0.125	4.90%	-15.67%
HKLand US$	4.94	2.48	-2.46	-49.80%	0.15	6.05%	-21.87%
JMH 400US$	27.7	18.5	-9.2	-33.21%	0.69	3.73%	-14.74%
JSH 500US$	15.7	10.4	-5.3	-33.76%	0.183	1.76%	-16.00%
STI ETF	2.9	1.84	-1.06	-36.55%	0.12	6.52%	-15.01%

The Little Book of Value Investing by Christopher H. Browne

Balance Sheet - how much money the company owes and its net worth

• Current assets : cash and assets that can be turned into cash in a relatively short period
  • T-bills
  • Inventories that are finished products ready for sale or products that are in process of being manufactured
  • Receivables from customers who have bought their products
• Current liabilities : debts that fall due within a year or less
  • Interest payment on company borrowings
  • Account payable to the company's suppliers
  • Taxes owed but not yet paid
• Current Ratio = Current Liabilities / Current Assets
  • Companies ability to pay its short-term obligations
  • Guideline: 2-to-1 ratio
  • Compared with other companies, LOWER ratio means possible LIQUIDITY PROBLEM
  • Steadily declining year over year means SERIOUS LIQUIDITY PROBLEM
• Working Capital = Current Assets - Current Liabilities
  • Guideline : The more the better
• Quick Ratio = (Current Liabilities / Current Assets) - Inventories
  • Rising inventories may indicate a product that has decreased in popularity and will be difficult to sell at a profit
• Long-term assets
  • Real estate, Factories, Warehouses and equipment
  • Investment in subsidiaries or stocks that is not intended to be sold
  • Intangible assets such as patents, trademarks, copyrights (usually not taken into consideration because difficult to get exact valuation)
• Long-term liabilities
  • Bank loans
  • Public and private bond issues
  • Long-term leases for property or equipment
• Shareholder Equity (Book value) = Assets - Liabilities
  • Liabilities growing faster than assets means company has to borrow more and more money just to stay afloat
• Debt-to-Equity Ratio = Total Debts / Shareholder Equity
  • Guideline: less than 1
  • If number is higher than 1, company is funded primarily by debt rather than equity investment

Income Statement - how much money the company took in over a period of time (sales or revenue) and how much it paid out (expenses)

• Company's sales or revenues
  • To be compared to previous years
  • Guideline: Revenues growing over time
• Cost of goods sold : direct cost of producing product or service the company sells
  • Raw materials
  • Manufacturing or labor costs of making product
  • INCREASING % of (COGS / revenues) means rising costs that cannot be passed on to the costumers are squeezing the long-term potential for profit
• Gross profit = Revenues - COGS
• % Gross Profit Margin = Gross Profit / Revenues
  • Guideline: steadier gross profit margin means better business
• Operating expenses : selling, general and administrative expenses
  • Guideline: Lower % of (Operating Expense / Revenue) is better
• Operating Profit (EBIT : Earnings Before Interest and Taxes) = Gross Profit - Operating Expenses
  
• Net Profit (Final Earnings) = Operating Profit - Interest Expense - Taxes - Depreciation
  
• Earnings Per Share (EPS) = Net Profit / Outstanding Shares
  • Diluted EPS : taking into consideration stock options, issued bonds, preferred stock or warrants are converted to stock
  • Guideline : Diluted EPS very much lower than EPS means earning is not as cheap
  • Recommended to use EBIT instead of Net Profit
    
• Questions on Trend over 5 or 10 years:
  • Are revenues rising or falling?
  • Are expenses staying in line with revenues?
  • Are profits consistent or uneven?
  • Is there a cyclical pattern to earnings such as would be the case with economically sensitive companies?
  • Are profits growing?
  • Are there a lot of one-time charges or gains to indicate the company may be manipulating or massaging the bottom line?
  • Are shares outstanding decreasing?
    • Rising shares outstanding indicate excessive stock options are being granted to executives and will dilute share of corporate profits
    • Company is financing itself through stock offerings rather than earnings
• Return on Capital (ROC) = Earnings / Beginning Year Capital (stockholder Equity + Debt)
  • Rising ROC means company is doing a good job of reinvesting profits
• Net Profit Margin = Earnings / Total Revenues
  • Guideline: avoid companies with declining Net Profit Margin

The book The Little Book of Value Investing (Little Books. Big Profits) can be obtained from Amazon.

Essence From The World Most Intelligent Investor - Warren Buffett

Tips from Warren Buffett
1. Invest in Businesses, not in stocks
2. Stick to businesses you understand
3. Buy companies with defensible “franchises” or “moats”
4. Hold for the long term
5. Ignore short-term fluctuations in price
6. Buy good businesses when prices are down or at rational prices
7. Be a passive investor, not an active trader
8. Do not over-diversify
9. Invest only when there is a Margin of Safety
10. Ignore macroeconomic events
11. Intelligent investing is one with both growth and value

Contrarian Investing By Anthony M. Gallela & William Patalon III

The Buy Rules

• Initial Trigger: "Down-By-Half Rule"

This means that the stock has to be down by at least 50% from its 52-week high

• Confirming Indicators:

1. Major stock purchases by insider or knowledgable outsiders
2. Must meet at least 2 of the following 4 fundamental analysis indicators

* Trailing Price/Earning (P/E) < 12
* Price/Free Cash FLow (P/FCF) < 10
* Price/Book (P/B) < 1
* Price/Sales (P/S) < 1

• Additional minor rules:

1. Stock must be at least $5 per share (US market)
2. Companies with large market capitalization > $150 million (US market)
3. Change of top management in a company with problems is a positive sign
4. "One-timers". Stock which have strong fundamentals but is beaten down by a one-time event (such as accident or adjustment for obsolete inventory)

The Sell Rules

• Put in a 25% "Stop Loss" Order
• Sell after a 50% Gain or 3 Yrs whichever is earlier
• Exception to the 50% Rule if the upside is clear. Move Stop Loss to 30% Gain Mark

The Risk Diversification RuleOut of the 100% Portfolio:

1. 5% Purchase for each stock
2. 20% holding for each Industry

The book Contrarian Investing is available at Amazon.

ST Engineering

Chart obtained with ChartNexus.

This ticker is downtrending but if you want to do short term trading. Hop On!
The RSI is at 2%, Williams is at -91.
Price bar is dipped below the Bollinger Band Support. Backed by High Volume.
Reached its 2 yr low.

Take some risk and gain some profits. Hopefully I am right.

- Wearing a TRADING hat -

Higher savings rate with Poems MMF

[Disclaimer: The author does not achieve any monetary gains from posting this entry.]

For those who doesn't know what POEMS is, it is a trading account. MMF is a facility to temporarily park money during stock trading. When money is put into POEMS account, it will be automatically bought into MMF at the price stated on that day. When stock trade is done, the MMF unit will be sold at the price stated on that day to pay for the trade.

One and a half month ago, I activated my POEMS MMF (Money Market Fund) account. Since then, I started tracking the MMF price. I have also gotten historical pricing from "Bully The Bear".

Below is the data I have gathered from POEMS as well as "Bully The Bear".

Date	Price	interest rate compared to previous record (%pa)
02/05/2007	1.0908
04/05/2007	1.0909	1.67
08/05/2007	1.0910	0.84
09/05/2007	1.0912	6.69
10/05/2007	1.0913	3.34
14/05/2007	1.0914	0.84
15/05/2007	1.0916	6.69
16/05/2007	1.0917	3.34
17/05/2007	1.0918	3.34
21/05/2007	1.0919	0.84
23/05/2007	1.0921	3.34
24/05/2007	1.0922	3.34
28/05/2007	1.0923	0.84
29/05/2007	1.0925	6.68
01/06/2007	1.0926	1.11
05/06/2007	1.0927	0.84
06/06/2007	1.0930	10.02
08/06/2007	1.0931	1.67
12/06/2007	1.0933	1.67
13/06/2007	1.0934	3.34
18/06/2007	1.0935	0.67
19/06/2007	1.0938	10.01
21/06/2007	1.0939	1.67
25/06/2007	1.0940	0.83
26/06/2007	1.0942	6.67
28/06/2007	1.0943	1.67
29/06/2007	1.0944	3.34
03/07/2007	1.0946	1.67
04/07/2007	1.0947	3.33
06/07/2007	1.0948	1.67
10/07/2007	1.0951	2.50
12/07/2007	1.0952	1.67
13/07/2007	1.0953	3.33
17/07/2007	1.0955	1.67
19/07/2007	1.0956	1.67
20/07/2007	1.0957	3.33
24/07/2007	1.0959	1.67
25/07/2007	1.0960	3.33
27/07/2007	1.0961	1.67
30/07/2007	1.0962	1.11
31/07/2007	1.0963	3.33
01/08/2007	1.0964	3.33
02/08/2007	1.0965	3.33
06/08/2007	1.0967	1.66
07/08/2007	1.0968	3.33
08/08/2007	1.0969	3.33
10/08/2007	1.0970	1.66
13/08/2007	1.0971	1.11
15/08/2007	1.0974	4.99
16/08/2007	1.0975	3.33
20/08/2007	1.0976	0.83
21/08/2007	1.0978	6.65
22/08/2007	1.0979	3.32
24/08/2007	1.0980	1.66
28/08/2007	1.0982	1.66
29/08/2007	1.0983	3.32
30/08/2007	1.0984	3.32
03/09/2007	1.0985	0.83
04/09/2007	1.0987	6.65
07/09/2007	1.0988	1.11
10/09/2007	1.0989	1.11
11/09/2007	1.0991	6.64
13/09/2007	1.0992	1.66
14/09/2007	1.0993	3.32
18/09/2007	1.0995	1.66
20/09/2007	1.0996	1.66
21/09/2007	1.0997	3.32
22/09/2007	1.0999	6.64
26/09/2007	1.1000	0.83
28/09/2007	1.1001	1.66
06/10/2007	1.1005	1.66
12/10/2007	1.1009	2.21
16/10/2007	1.1011	1.66
17/10/2007	1.1012	3.31
19/10/2007	1.1013	1.66
23/10/2007	1.1015	1.66
24/10/2007	1.1016	3.31
26/10/2007	1.1017	1.66
30/10/2007	1.1019	1.66
31/10/2007	1.1020	3.31
02/11/2007	1.1021	1.66
06/11/2007	1.1023	1.66
07/11/2007	1.1024	3.31
13/11/2007	1.1027	1.66
14/11/2007	1.1028	3.31
16/11/2007	1.1029	1.65
19/11/2007	1.1030	1.10
20/11/2007	1.1031	3.31
21/11/2007	1.1032	3.31
22/11/2007	1.1033	3.31
26/11/2007	1.1034	0.83
27/11/2007	1.1036	6.62
29/11/2007	1.1037	1.65
03/12/2007	1.1038	0.83
04/12/2007	1.1039	3.31
05/12/2007	1.1040	3.31
07/12/2007	1.1041	1.65
11/12/2007	1.1042	0.83
12/12/2007	1.1044	6.61
14/12/2007	1.1045	1.65
17/12/2007	1.1046	1.10
20/12/2007	1.1048	2.20
21/12/2007	1.1049	3.30
24/12/2007	1.1050	1.10
26/12/2007	1.1052	3.30
27/12/2007	1.1053	3.30
28/12/2007	1.1054	3.30
02/01/2008	1.1056	1.32
29/02/2008	1.1092	2.05
05/03/2008	1.1094	1.32
08/03/2008	1.1095	1.10
11/03/2008	1.1096	1.10
12/03/2008	1.1097	3.29
14/03/2008	1.1098	1.64
17/03/2008	1.1100	2.19
25/03/2008	1.1101	0.41
26/03/2008	1.1103	6.58
	Average Interest rate (%pa) >>>>	2.70%

If the calculation is based on the first date and the last date, the interest rate is slightly lower.

Date	Price	interest rate (%pa)
02/05/2007	1.0908
26/03/2008	1.1103	1.98

[Note: Hopefully my calculation is correct]

I am fully aware that there are many other "rainy day savings haven"; to name a few would be Citibank Step-Up Account(currently stepping up to 1.2%pa) and StandardChartered eSaver Account. Well, I suppose I prefer POEMS MMF to others because I can gain better access to the money.

SPC - Singapore Petroleum Company

This stock may not be an STI component but it is indeed very attractive. It has times and again defied gravity. When many blue chips aren't doing so well, SPC as a defensive stocks does not falter much. It fluctuates a little and moves in a slow staggering manner. But, above all, it has such a great dividend payout.

Let's take a peek at how healthy SPC is via its FA(Source taken from DBS Vickers):

DBS Vickers shows that SPC has 9.202%pa of dividend yield. Isn't it wonderful?

Let's move on to see some chartings for a TA. (Source taken from ChartNexus)

As for SPC, i won't have to depend on RA at all... I am so gonna buy SPC and hold for Super Duper Long Term. It's HUGE Dividend is good enough for a source of other investment income. There are many average stocks, many good stocks BUT SPC is certainly one of the BEST!

[PS: SPC Ex-Date for 40cents final dividend is on 24th April 08. Payout date is on 12th May 08. So, go do your Maths and Risk Analysis]