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Summary of February 2016 Transactions

Portfolio_201602_Feb

The month of February, many companies continue to announce their FY2015 Full Year results. M1 held the fort well given the threat and market panic caused by the news of the 4th Telco.

I am expecting to collect dividends from the stocks I hold such as Soilbuild REIT, Suntec REIT, Parkway Life REIT, Keppel REIT, Frasers Commercial Trust, Capitaland Mall Trust, OUE Hospitality Trust and Cambridge Industrial Trust.

Given the market weakness, I bought a little more of ST Engineering. ST Engineering now stands at 15% of my entire portfolio. At the time of writing this post, ST Engineering has announced its FY15 results. Net profit dipped 0.5% YoY to $529m. Given the weak marine sector, I am not surprise at the results. The aerospace and electronics sector did well. I am still positive about ST Engineering in the long run, given its defensive and resilient nature.

Over the past few months, I have been taking opportunity of the market weakness and buying more of the stocks I hold rather than introducing new counters into my portfolio. My war chest is depleting fast. Going forward, I shall be buying less or even none to build up my war chest so as to wait for the next buying opportunity.

Book Review: The 100 Best Stocks to Buy in 2015

The 100 Best Stocks To Buy in 2015 I came across this book which is selling at a discount at Times Book store. Looking at a title, you can tell why it is selling at a discount. There is a newer copy “The 100 Best Stocks to Buy in 2016” but I shall be grabbing that later.

The stocks listed in this book are all US based stocks. I have always been keen to invest in the US stock market and thus I grabbed this book to understand more.

The authors (Peter Sander and Scott Bobo) classify the list of stocks into a few categories.

  • Conservative Growth
  • Aggressive Growth
  • Growth and Income

In each stock analysis, the authors indicated how many times the company raises dividend for the past 10 years. This is especially useful if you are an income investor. Current yield information was also provided.

The author also indicates the reasons to buy and reasons for caution so we can do our own evaluation on the risks.

In summary, you can use this as a reference book when investing in the US stock market.

A good reference book, I give it an average rating of 3 stars out of 5.

Rating_Average

Boustead Revenue and Net Profit fell for 3Q FY2016

Oil and Gas

On 12th February, my favourite company, Boustead Singapore Limited announced its 3Q FY2016 financial results.

The revenue of S$142.3 million for 3Q FY2016 was 20% lower than 3Q FY2015. Net profit of S$7.5 million was 36% lower than 3Q FY2015. If you take into account the demerger and other gains and losses, then net profit for 3Q FY2016 would be 16% lower year-on-year.

Mr Wong Fong Fui, Chairman and Group Chief Executive Officer of Boustead said,

“All our divisions continued to deliver profitability even in these harsh business conditions. Nonetheless, our businesses face significant challenges and especially our Energy Related Engineering Division with the further slide in global crude oil prices. We continue to proactively manage our costs to partially mitigate these circumstances.”

Financial Results

3Q2016 (S$) 3Q2015 (S$) Change (%)
Revenue 142.3m 177.9m (20%)
Gross Profit 42.2m 42.0m 0%
Profit Before Income Tax 15.7m 18.4m (15%)
Total Profit 11.3m 12.6m (10%)
Profit attributable to equity holders of Company (“net profit”) 7.5m 11.8m (36%)
Net profit (adjusted for Boustead Projects demerger) 7.5m 10.5m (29%)
Earnings Per Share 1.4 cents 2.3 cent (39%)

Energy Related Engineering Division

Revenue at the Energy-Related Engineering Division to drop 35% to S$31.0 million. Profit before tax at the Energy-Related Engineering Division was severely impacted by poor performances at the upstream oil & gas, water and waste water engineering and solid 3 waste energy recovery businesses.

Geo-Spatial Technology Division

The Geo-Spatial Technology Division generated revenue of S$25.7 million, down 17% year-on-year.

Real Estate Solutions Division (Boustead Proejcts)

Revenue at the Real Estate Solutions Division fell 14% to S$85.6 million.

Things to Note

  • Order book backlog of S$343 million. (Energy-Related Division S$115 million and Real Estate Solutions Division S$228 million)
  • Healthy balance sheet of S$126.9 million net cash position.
  • Looking for acquisition after potential acquisition of Indonesia energy asset fell through.

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