There was 1 transaction for the month of December 2009.
Bought Starhub (PSBP), average price at $2.026
December was an inactive month for me in terms of number of transactions made if compared to the transactions made on the previous months. I had only one transaction for the whole month as I try to build up more cash while waiting for better opportunity ahead. I plan to subscribe in Healthway Medical RIGHTS exercise after reading the news about their China expansion plan.
Telecommunication stock was previously lacking in my portfolio. I decided to pick Starhub among the three available options. Singtel is definitely not an option for me to consider as I find its dividend yield unattractive and I foresee there isn’t much growth prospect in the company. I am quite divided between M1 and Starhub as both are offering attractive dividend yield of around 8%. I decided to go with Starhub because of its diversified businesses in the mobile, cable television and broadband segments.
Despite losing the broadcasting rights for EPL, Starhub just declared an increase in dividends per share to $0.05 for the recent quarter. Management showed that they are confident of maintaining profitability which I am some how skeptical of. Because of the uncertainty in the coming quarters as consumers start switching cable television providers, I decided to buy Starhub shares by Dollar Cost Averaging (DCA) for the next eight to twelve months.
Based on the latest financial statements, I calculated Starhub cost of debt to be around 2.75% per annum. Starhub capital structure is majorly financed through debt but assuming a conservative 7% weighted average cost of capital; let me try to give a simple valuation for Starhub using dividend discount model. Take note weighted average cost of 7% is already very conservative considering the fact that Starhub business is quite defensive in nature and thus less risky.
Assuming a constant and perpetual dividend payout of $0.2 per share per annum, Starhub is valued at $2.86 ($0.2/0.07). I see the current price already gives a good margin of safety against potential downward reversion of stock price. Furthermore the dividend payout has not taken dividends growth into account. Assuming a 2% growth in annual dividends, Starhub is valued at $4 ($0.2/ (0.07-0.02)). Is the valuation attractive? I will let you decide for yourself. Well I just thought of sharing this even though I have not collected enough of Starhub shares.
I received total dividends of $68.70 for the month of December 2009. It does not include dividends from my ETF which will be paid out later next month.
| Stock | Mode | Unrealised P/L (SGD) | Stock | Mode | Unrealised P/L (SGD) |
| ARA | CASH | -10.49% | KS ENERGY | CASH | -19.48% |
| ARMSTRONG | CASH | 100.00% | MACQ INT INFRA | CASH | -51.02% |
| CAPITACOMM | CASH | 32.50% | NEPTUNE ORIENT LINES | CASH | 25.28% |
| CAPITALAND | CASH | 68.74% | NOBLE GROUP | CASH | 30.63% |
| CAPITAMALLS ASIA | CASH | 19.81% | PLIFE REIT | CASH | 56.21% |
| CHINA MILK | CASH | -54.30% | RAFFLES EDUCATION | CASH | -50.55% |
| CITYSPRING | CASH | 19.43% | ROTARY ENGRG LTD | CASH | 4.37% |
| COURAGE MAR | CASH | -24.60% | SATS | CASH | 62.32% |
| CSE GLOBAL | CASH | 122.37% | SGX | CASH | 30.81% |
| FIBRECHEM | CASH | -88.71% | STARHUB | CASH | 6.12% |
| FORTUNE REIT | CASH | 26.91% | ST ENGG | CASH | 42.67% |
| FRASERSCOMM | CASH | -51.22% | TAI SIN | CASH | -35.26% |
| FRASERSCT | CASH | 30.11% | TAT HONG | CASH | 33.93% |
| FSL TRUST | CASH | -49.96% | UOB-KAY HIAN | CASH | -19.42% |
| GENTING SP | CASH | 83.36% | VICOM | CASH | 20.84% |
| HEALTHWAY | CASH | 1.50% | VANGUARD EMER MRKTS | CASH | -7.64% |
| HG METAL | CASH | -17.20% | iSHARES MSCI EAFE | CASH | 16.10% |
| JAYA HLDG | CASH | -55.22% | BH GLOBAL | CPF | -17.69% |
| KEPLAND | CASH | 176.03% | COSCOCORP | CPF | -59.50% |
| KEPPELCORP | CASH | 112.72% | SIAENGG | CPF | -29.65% |
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