He has been actively investing in equities since the early 1970s.
On top of that, he is a Fellow Certified Public Accountant (Singapore and Australia) and a former associate professor with the National University of Singapore (NUS) Business School.
In the Stock Challenge, all four participants pooled $100 each for the prize monies of $250 and $150 to be awarded at the end of six months.
With the market outlook being buoyant, their portfolio gains are likely to be rewarding.
(The participants do not recommend that readers follow their stock picks as this is just a game and it has no financial downside for the participants).
Details of the picks:
| Stock | Number of shares | Purchase price ($) | Sale price ($) | July 3 closing price ($) | Value of holding ($) |
| Yanlord | 10,000 | 1.76 | 2.55 | 25,500 | |
| Straits Asia | 15,000 8,000 | 1.16cd 1.75 | 1.74 1.74 | 26,100 13,920 | |
| Sinotel | 50,000 | 0.205 | 0.22 | 11,000 | |
| Guthrie GTS | 30,000 | 0.28 | 0.32 | 9,600 | |
| Warrants | |||||
| Yongnam wrt 121214 | 1,000,000 | 0.035 | 0.065 | 65,000 | |
| SGX BNPeCW090713 | 20,000 | 0.55 | 0.92 | - | - |
| SGX BNPeCW091130 | 55,000 | 0.365 | 0.255 | - | - |
| Shares + warrants | 149,550 | ||||
| Cash | 1,570 | ||||
| Total | 151,120 (+51.1%) |
Sebastian Chong
Sebastian Chong has invested actively in equities since the 1970s. He is managing director of Financial Info Analysis Pte Ltd, a company he founded after he retired as an accounting professor at the National University of Singapore. He now runs his popular investing website, www.shareowl.com
Sebastian says:
The STI closed at 2,299.75 on Friday July 3, 2009, somewhat lower than a month ago. The SGX covered warrants were not easy to play. I made profit of $7,400 on the sale of the SGX NPeCW090713.
With hindsight I should have just kept the cash or bought a mother share like Yanlord or even SGX itself. So it was a mistake to use the proceeds to switch to another SGX covered warrant with November expiry, namely SGX BNPeCW091130. But I decided to cut loss on this warrant.
The loss amounted to $6,050. If I had kept the proceeds of the sale of the July warrant as cash, my total portfolio value would have been around $157,000, that is, up 57% from the seed capital of $100,000.
Yanlord and Straits Asia were the best picks. Yanlord was $2.18 a month ago but is now $2.55 despite a lower STI. Likewise, Straits Asia outperformed the STI by appreciating further from $1.49 a month ago to $1.75 currently.
Wireless infrastructure solution by Sinotel.
Sinotel and Guthrie are still well above cost but they have come off their prices a month ago in line with the STI. Fortunately the amounts invested in Yanlord and Straits Asia were twice as much as those invested in Sinotel and Guthrie. In other words, the strongest stocks received the heaviest weightages.
Although Yanlord and Straits Asia have gone up by 45% and 52% respectively, there is still considerable upside in the next four months (when this round of Stock Challenge finishes) and even more so in the next 12 to 24 months. Both Sinotel and Guthrie also have lots of upside in the next couple of years.
The only difference is that Sinotel is somewhat more risky as it is a small tech company in the info-communications industry in China whereas Guthrie has stakes in fully tenanted prime retail malls in the Jurong and Tampines heartlands. In the investment industry parlance, we can say that Guthrie has higher earnings quality since the volatility of revenue and profits is low compared with a tech contractor like Sinotel.
As for Yongnam warrant expiring in Dec 2012, the current price of 6.5 cents is still much higher than the cost of 3.5 cents although it was higher at 7.5 cents a month ago. For the SGX covered warrants, I had to do short term trades because they are short term warrants. The Yongnam warrant is a very long term warrant and hence I deem it safe to just buy and hold for the next couple of years provided I monitor the fundamentals of Yongnam to ensure that it remains excellent.
***
| No. of units | Purchase price | Jul 3 closing | Value | |
Oceanus | 100,000 | 22 cents | 29.5 cents | $29,500 |
| Oceanus | 50,000 | 31 cents | 29.5 cents | $14,750 |
| Sinotel | 100,000 | 22.5 cents | 22 cents | $22,000 |
| HSI MBL....PW091230 | 20,000 | 44 cents | 29 cents | $5,800 |
| Rickmers Maritime | 50,000 | 50.5 cents | 54 cents | $27,000 |
| Cash | $5,950 | |||
| $105,000 |
Neontet's avatar
Neontet is inclined towards high-growth small- and mid-cap stocks, preferring to stay away from most blue chips. He has had a good time investing in small- and mid-caps despite being burnt by some S-chips and Singapore companies with corrupt management.
He says:
Since the last report about a month back, my portfolio has shed about 5 percentage points, so its gain is now 5% (down from 10.5%). Nevertheless, I am holding to the stocks as their fundamentals look robust, except for a small trading position on the Hang Seng Index which is doing badly.
Oceanus: A piece of news that has affirmed my confidence in Oceanus is that The Capital Group of Companies has recently become a substantial shareholder of the company, crossing the 5% level. This US fund manager is a venerable house whose origin dates back to 1931.
Oceanus farm: Abalones being grown in cages.
Oceanus has attracted fund managers like that because the business has been shown to be highly-scalable (Oceanus now has 300 m abalones big and small) and its downstream venture into restaurants serving abalone meals for the middle-income folks and above will make it a unique food stock too, when it goes for a listing.
Sinotel: China has embarked on setting up a national 3-G network, and Sinotel is providing its services to the big telcos. Sinotel is likely to be lifted by the giant waves and its order book to-date reflects that. However, my worry is that its working capital requirements are big too, and receivable days are oh so long. Translation: low or no dividend payout. Investors can only bank on capital appreciation of the shares.
Rickmers Maritime: If profits continue to go up quarterly and the DPU is not adversely cut back to conserve cash, then Rickmers is a sexy dividend yield play at more than 22% yield currently. Its charters are locked in for many more years, so its revenue stream looks pretty safe, but it does have financing needs for vessels it has ordered and which will be delivered in the near future. At 54 cents, it is at a big discount to its Net Asset Value of 84 cents.
Hang Seng Index put warrant: Will be disposing of this warrant, as time decay sets in and the instrument is losing value over time. The only thing that can save it is a sharp plunge in the Hang Seng Index, which looks improbable at this moment.
***
| Stock | Number of shares | Average Purchase price ($) | July 3 closing price ($) | Value of holding ($) |
| Techcomp | 100000 | 0.23 | 0.24 | 24,000 |
| HSI17000BNPePW090828 | 70000 | 0.22 | 0.185 | 12,950 |
| Cash | 61,600 | |||
| Total | 98,550 (-1.45%) |
Level 13's avatar
Level 13 is a 31-year-old investor and a business analyst with 4 years of investing experience. Check out his blog for insights on financial matters (mainly equities).
Level 13 says:
When the first report was published on 1st June, the STI was at 2380.07. One month later, it closed at 2299.75 representing a drop of 3.37%. During this month I added a put warrant on HSI which will expire end August into my portfolio. In my point of view, there is no catalyst present in the near term to propel the markets higher regardless of location (Hong Kong or Singapore).
The P/E of the STI now stands at approximately 12. At first glance, it may appear cheap. However, one needs to be aware that most P/E data are calculated using historical figures. As such, considering the huge increase in the number of outstanding shares through rights issue in index-linked companies and the drop in future earnings, I can say that the forward P/E will be much higher. Hence, for now, the STI as a whole does not look attractive. But I will still continue to hunt for companies under the radar with low valuation.
***
| No. of shares | Average price bought at | Closing price on Jul 3 | Value | |
| Celestial | 296,998 | 18.49 cts | 17 cts | $50,489 |
| Sino Techfibre | 167,000 | 15 cts | 13 cts | $21,710 |
| Sinotel | 116,000 | 21.5 cts | 22 cts | $25,520 |
| Total | $97,719 (-2.3%) |
Shuishui's avatar
Shuishui, who is in his mid-30s, has been a stock investor for many years. A Singaporean, he has close ties with China as his parents and relatives are living there. He has taught himself how to analyse financial statements.
June 2: Sold all Celestial shares @ 0.225 and bought Noble Group @ 1.77.
June 11: Sold all my Noble shares @ 1.820 to buy Celestial @ 0.190.
June 12: Sold all China Sky shares @ 0.170 to buy Celestial @ 0.18.
I strongly believed that the convertible bond issue faced by Celestial is a walk in the park - no big deal. Mr Market has just oversold this stock and that’s my chance to nail it. It’s now or never. Now it is truly cheap. I forsee that in Aug 09, this stock will double. Just my 6 cents’ worth.
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