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Tuesday, August 14, 2018

Portfolio Update August 2018

Recent Actions:

Bought 20 lots First REIT @ 1.29
Bought 2 lots Keppel Corp @ 6.8
Bought 6 lots Singtel @ 3.150

Entry into Singtel and Keppel were probably ill-timed. But timing the market is a fool's errand anyway.

I already discussed why FIRST REIT was attractive to me here.

During the GFC, Singtel's lowest ever was 2 dollars. Singtel is nowhere near a crisis level. It's free cash flow (FCF) continues to grow (up 13% to S$1.47 bn), giving the company significant firepower to weather the price cutting wars in India and Indonesia.  While near term metrics are unfavorable, I maintain that Singtel is oversold at 3.050.

Keppel's net order book for its marine business appear to be recovering (around 4.6bn). Notably this number excludes the orders from Sete Brasil.  During the oil peak days when Keppel was trading around $11-12, its net order book was around 10-12 bn (which then included Sete Brasil).  The worst does appear to be over.  It may be time to slowly accumulate. At 6.8, the estimated dividend is close to 4%.  Nothing impressive but this is intended to be a growth + dividend play.  May accumulate more on further price weaknesses.

Overall, the market appears to be on a slight downtrend. 

However, this situation may be beneficial to one with a large warchest. It presents a golden opportunity to take bites and nibbles at curated value-plays. Prefer high yielding blue chips (>4%) with potential for capital recovery.

Do your own due diligence.  The above should not be taken as advice of any sort.

Onward to FI my brethren.