Finally I am starting to see a ray of light appearing across my investment horizon as some of my stocks begin to make positive gains. Overall I am still at a loss due to poor selections and early purchases of stocks. Despite a previously unrealised loss of as high as 60%, I am glad that I still manage to control my emotions throughout my investment journey and surviving in the crisis so far.
If you notice, I hold a broadly diversified basket of stocks. I choose this strategy instead of becoming a focus investor because I believe no matter how well you do your stocks research, there are still certain factors or risks that you can’t really anticipate. Also how informed can an investor be? Even an employee may not know the full development of the large company that he or she is working in. Therefore how better off are you as an investor who is not even working in the company?
Recall the cases of Enron, Satyam and our own China S-Shares. In fact one of my stocks Fibrechem which used to have a good growth story was also affected in an accounting problem. The point that I wish to bring up is if Fibrechem was made as my major holding, my overall portfolio will definitely be greatly affected by such setback.
I bought some SGX shares through Phillip Share Builders Plan (PSBP) for the fifth straight month already. I am contented with how the Dollar Cost Averaging works for me as I get to buy at an average price of the volatile market. However for Capitaland, I bought them through a combination PSBP and open market purchases. I still plan to buy more SGX shares next month and at the same time reinvesting all the coming dividends from Capitaland and SGX at absolutely no cost.
There were 3 transactions for the month of April 2009.
Bought Capitaland (PSBP), new average price at $2.451
Bought SGX (PSBP), new average price at $5.280
Bought Armstrong Industrial, price at $0.125
As previously planned, I have made another penny stock purchase which I believe has the potential in giving me good returns when market recovers. Armstrong is a second technology stock after CSE Global which I have added into my portfolio recently. Just to share, these two companies were recipients of Forbes Asia’s 200 Best Under A Billion companies in 2008. Of course I have reasons to believe that they can still continue to do well when market turns around.
Armstrong was established in 1974 when they started as a foam and rubber parts contract supplier. Now they have grown into a diversified manufacturing solutions provider of products from consumer electronics, automotive, data storage and office automation. Armstrong has presence in countries like Singapore, Malaysia, Thailand, Indonesia, China and the newly penetrated Vietnam region. If you check their segmental reporting of revenue, they are well diversified not only across the regions but also across business segments. You can see how truly diversified Armstrong is taken from their latest segmental revenue in pie chart for the year 2008.
On the shareholding statistics front, their very own CEO and Chairman Mr Gilbert Ong, has a substantial stake in the company which is rather rare that you can find a CEO and Chairman to be holding a majority stake in his own company. In fact, his wife Ms Chow is the next major shareholder. Both husband and wife running the business have shown confidence and commitment in the prospect of the company.
In my opinion, shareholding statistics is also an important factor when choosing a good company apart from all the numerical and fictitious future valuations. To me as long the company has a good prospect coupled with attractive current valuation and led by a team of capable management, its future stock price will take its own course.
Below I present a highlight of the company financial statements since 2004.
I believe Armstrong can weather the financial crisis with their strong cash position, low debt and proven track records. Based on a simple valuation of Total Enterprise Value (TEV) over EBITDA, I am contented to buy at a cheap valuation ratio of about 2.
I did not receive any dividend for the month of April 2009.
I did not receive any dividend for the month of April 2009.
| Stock | Mode | Unrealised P/L (SGD) | Stock | Mode | Unrealised P/L (SGD) |
| ARA | CASH | -52.67% | PAC ANDES | CASH | 3.86% |
| ARMSTRONG | CASH | 24.00% | PLIFE REIT | CASH | -2.69% |
| CAPITACOMM | CASH | -35.33% | RAFFLES EDUCATION | CASH | -47.84% |
| CAPITALAND (PSBP) | CASH | 12.61% | ROTARY ENGRG LTD | CASH | -56.26% |
| CHINA HONGXING | CASH | -76.07% | SATS | CASH | -22.39% |
| CHINA MILK | CASH | -48.25% | SGX (PSBP) | CASH | 18.75% |
| COSCO CORP | CASH | -69.78% | ST ENGG | CASH | 12.82% |
| COURAGE MAR | CASH | -47.12% | SWIBER | CASH | -77.28% |
| CSE GLOBAL | CASH | 7.97% | TAI SIN | CASH | -53.17% |
| FIBRECHEM | CASH | -88.71% | TAT HONG | CASH | 1.40% |
| FRASERSCOMM | CASH | -83.87% | UOB-KAY HIAN | CASH | -32.76% |
| FSL TRUST | CASH | -68.31% | VICOM | CASH | -10.75% |
| GEN INT | CASH | -6.73% | VANGUARD EMER MRKTS | CASH | -34.39% |
| JAYA HLDG | CASH | -76.31% | iSHARES MSCI EAFE | CASH | -7.33% |
| KEPPEL CORP | CASH | 54.56% | BH GLOBAL | CPF | -50.86% |
| KS ENERGY | CASH | -47.73% | COSCO CORP | CPF | -65.28% |
| MACQ INT INFRA | CASH | -63.40% | SIA ENGG | CPF | -58.51% |
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