Author: The Unnecessary Job

Stocks that pay you to wait

What is better than earning a capital gain on an investment? Stocks that pay you to wait for that gain. SINGTEL is one example of a stock that is currently paying a relatively handsome “waiting fee”. SINGTEL If you had caught Singtel in early January, you are potentially holding a stock yielding 6.12% on your invested capital based on a $0.175 per share dividend payout. If you hold the stock for a single dividend cycle, at current share price ($3.15), you would have made about 9% capital gains + 6% yield for a total return of over 15% ....

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Is it time to consider selling DBS

This recent rally has been phenomenal. At last traded price (27.1), DBS has an effective yield of around 4.4%(@ $1.20 per share).  Based on an EPS of 2.14, that represents around a 55% payout ratio, which seems reasonable and sustainable to me.  It seems that a lot of investors may be looking to hold on to DBS at least until 2 May 2019, when the share will go XD. Once XD, the share price should theoretically correct to 26.5 (0.60 dividends). The big question on everyone’s minds is naturally: Will this seemingly unstoppable rally continue? Will we see DBS...

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How long will the S-REIT rally last

The current sentiment on S-REITs appears to be quite bullish. https://www.businesstimes.com.sg/real-estate/s-reits-tipped-for-further-gains-as-rate-hike-fears-subside “Reits have been very resilient and consistent in outperforming the broader Singapore market,” Mr Wong said, highlighting the defensiveness of the sector. “In uncertain times, they are pretty defensive because of the leases that are locked in. In bull markets… underlying property asset values and underlying rentals of the Reits also benefit from the up cycle.” The article further notes that OCBC is quite bullish on the retail sector, mentioning specifically the rejuvenation plans for Orchard road.  (As of writing, Starhill is trading at S$0.74 – heh).  Maybank...

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Q1 2019 Dividends

Another 25% of the year has gone by. The fleeting passage of time is sometimes worrying. Every year, I feel my general fitness going down.  By the time I stop working, would I lack the requisite health or energy to enjoy the activities financial freedom was meant to provide? This is a constant debate raging in my head.  Delayed gratification is good but how much delay is reasonable? Time is wasting away and FI cannot come soon enough to remove the shackles of work from my callused wrists. Time to take stock of where my passive income levels are...

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Q1 2019 Portfolio and FIRE progress

Market has been buoyant and has helped to lift the value of my portfolio. Current portfolio: March 2019 AIMSAMP Cap Reit $173,602.00 Ascendas-hTrust $206,800.00 Cache Log Trust CapitaR China Trust $54,950.00 $25,280.00 First Reit $39,600.00 $346,320.00 Keppel Corp $31,050.00 $55,100.00 $144,480.00 StarhillGbl...

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Frasers Commercial Trust – A quick comparison

 Extracted from https://fcot.frasersproperty.com/financial_information.html Quick Look at ratios Yield 6.7% based on last traded share price of 1.43 Gearing 28.4% Price to book0.916 How does this compare to similar REITS? Yield Gearing  P/B Capital Com Trust 4.48 34.9 1.1 K Reit 4.45 36.3 0.9 Mapletree Commercial Trust 5.11 34.8 1.2 OUE Com REIT 8.16 39.3 0.7 Average 5.55 36.325 0.975 FCOT 6.6 28.4 0.92 FCOT has significantly lower gearing than its counterparts after recently disposing of its stake in 55 Market Street.  In any case, the Fed has turned decidedly less hawkish and we might end up seeing no rate hikes...

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Tuan Sing – severely undervalued?

Is Tuan Sing overly discounted? At at a price to NAV of just 0.445, investors are paying 41 cents to own a share having a net asset value of $0.9217. How does this compare with other property developers? 0.444830205 Frasers Property 0.689789556 Capitaland 0.771010023 0.819331527 Clearly Tuan Sing is a bit more undervalued compared to its peers. What about its level of debt? Debt/ Ebidta Frasers Property Capitaland  However, Tuan Sing seems to have a very high level of debt relative to its peers. One reason for its comparatively higher debt/EBITA ratio may be due...

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The Art of Selling

There is an oft-cited aphorism: you should sell at prices you would not buy at. Such “advice” has limited utility in practice because it contradicts another frequently-discharged gem of wisdom: let profits run. There is no robotic algorithm for selling Whether one should lock in capital gains, or wait for a multi-bagger,  a useful consideration here might be the type of asset you are invested in. If it is a growth stock, it may be worthwhile to “let profits run”. If it is a blue chip stock like a bank or telco, you may want to lock in some...

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Should Singapore adopt a wealth tax

There was a piece in Todayonline by former AO, and current academic, Donald Low, which suggests that it may be time for Singapore to consider implementing a wealth tax. As I understand it, wealth tax may include taxes on capital gains, dividend income, and/or inheritance. Such a wealth tax, if applied, would surely adversely affect a significant fraction of the FIRE community, many of whom rely on dividend income as the primary pillar of their FIRE plan. I must say I do not quite understand the rationale for such a tax. The primary goal of such a tax appears...

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Sold Sasseur REIT

Sasseur REIT experienced quite a rebound in share price, and surged from 0.64 (Jan 30) to 0.78 (Feb 20). The reported results were a bit better than forecast. But the rebound seems to be motivated by reasons other than the slightly better than forecasted results. I have no idea for this price surge. But it did present an opportunity for me to liquidate this position. As mentioned in earlier posts, this is merely part of my rebalancing strategy to get out of high yield (but high risk) stocks.  Nothing against counters with businesses domiciled in China, but their rep...

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Singtel – More trouble ahead?

Singtel continues to show weakness with yet another set of disappointing results. For the three-month period ending Dec 2018, EPS declined from 5.88 cents to 5.04 cents. In other words, the EPS for the full year may decline to 20.12 cents. If so, the expected dividend payout after the 2020 may decline to 12 cents to 15 cents a share. At current share price ($3), this translates to a yield of 4% to 5%. To be fair, this is by no means terrible for a blue chip stock, but it is a far cry from its current 17.5 cents...

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Frasers Logistics Trust – Optimistic despite slight DPU drop

DPU rises (but not really) No thanks Australia The TLDR version is that DPU went up by 6.5% (which is respectable) but the actual DPU received in SGD went down by 1.1% due to unfavorable AUD/SGD exchange rates. The impact was slightly mitigated by currency hedging. Spot rate (28 Jan): AUD/SGD: 0.97102 (source* OANDA) Hedged rate (1Q19) AUD/SGD: 0.982 The hedged rate is still slightly better than the live rate. AUD is at historical low Over the last 15 years, the AUD only went below parity with the SGD for a short period of time during the 2008/09 GFC...

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Frasers Commercial Trust – On its way up

There is talk  on the street that Google is interested to lease the vacant space at Alexandra Technopark. One may recall that the occupancy rates of Alexandra Technopark was left in tatters after HP terminated its lease and moved out. The space has since undergone AEI and should Google decide to lease space, the occupancy of the asset will become close to 100% (from its current 68.6%). I bought a bit FCOT a few months back, hoping for something like this to happen. While this is all speculative at this stage, one can be forgiven for being cautiously optimistic...

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Meritocracy is both essential and justified

Today, i received a rather funny (but sad funny) email from a clerk in my firm. Her email attached an invoice bearing the date 11/12/2018. A client from the US had requested that we re-issue the “November invoice with a December date”. Now, it is immediately clear to me that the US client is confused by the date format. Unlike the rest of the world, the US appears to revel in its odd ways of not using metric, and adopting counterintuitive date conventions i.e., month/date/year. But this is not my point. That clerk knows full well that both the...

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