Sunday, January 29, 2017

Keppel DC reit

Keppel DC reit is my first REIT which I bought as part of my investment. It is the first data center REIT to be listed in Asia with assets located around Europe and Asia. It pays out dividend semiannually with yearly distribution payout around 6% and gearing ratio around 29.4%.

Before I go into detail on this REIT, I would like to share this useful website where I can look through all REITs with a glance. It gives details on NAV, dividend, gearing ratio and price/NAV. As a rule of thumb, I will love to purchase a low price/NAV, low gearing ratio and high dividend payout. However, we still have to look at other aspects of the REIT.

Using Swot analysis. 

Their assets are located not just in Singapore but diversified over Europe and Asia. This will help to mitigate their risks.
-Long wale (weighted average lease expiry)
Wale is measurement of property portfolio's risk of going vacant. If a property is left vacant for period of time, it would affect the distribution to shareholder. Longer wale tends to be good for REIT.
-Good management
They have good management which is able to renew their rental ahead and hedge their earning against raising interest rate and Forex exchange.

Slowdown in economic especially with Trump becoming US president and their protective policies.

-Low gearing ratio allow more acquisition
With the recent right issue bringing down the gearing ratio, they have more room to acquire more asset.
-Expansion into other countries
This is data world where everyone is storing their photos and documents online. Data center will play an important role in this and I believe there is still room for oversea expansion in our neighbor countries where technology is catching up.
-New technology to cut cost
As the cost of maintaining the data center is expensive, if they can come out with technology to improve on efficiency, it will help them to lower the expenses and improve on profitability.

-Change in oversea regulation
Due to diversification, any change in oversea regulation would also affect Keppel D.C. Reit.
-Risking interest rate
FED is raising interest rate and any faster pace of raising interest rate, it will weigh on the earning.
-Forex exchange rate
As their earning come from oversea and any drastic change in exchange rate, it will also affect the profit.
-Compeitition from other companies
They must continue to manage their asset well in order to face compeitition from other companies.

I believe Keppel D.C. Reit still has room for improvement and will do well in the future. Currently, I am holding 4.2k of Keppel DC reit at average price of $1.15 which should be a pretty strong support. I also bough for my dad to give him passive income. I might add on when there is opportunity in the future. It is not a call to buy or sell, please do your own due diligent. I will continue to share more information along the way. If you have any idea to share, feel free to voice out.

Saturday, January 14, 2017

Sharing my view on Jumbo Group

When I first started my first investment, I just googled and follow my ex colleague blindly. In the end, the stock went up for the first few days and I was very excited. In the end, it went down hill for past few years. I did not understand the fundamental of investing that time. As the stock was an oil industry company, the price had dropped dramatically over the past few years due to oil price. I went to study more about the company and did the DCA as I believe the company still had a strong fundamental with good management to bring it through the crisis.

My favorite investment is "Gone fishing with Buffett" which is written by my officer in commanding in the army during my NS time. It is really an easy to understand and interesting book where we learnt the basic of investing through the story. Using the concept I learnt from this book, I deal mainly with REITS as the dividend is attractive and started trading toward second half of 2016. I monitor my stock through google sheet where I get the code from website to pull on the price through yahoo finance. 

From October 2015 to December 2016, I collected a dividend of $1144 with realized profit $1760 and sitting on unrealized profit of $2637. ROI is around 13%. My target ROI would be 13% and I also have intention to further study in this area to improve on my knowledge. Belief in sharing of information, I actively share my trading ideas with my close friends and some of them also benefited from it. They also encourage me to share my views online.

Jumbo is my first few stocks which I bought and I would like to share my view on it. Jumbo is a new IPO at that time and I read up quite a lot information of thi company. Despite the advice of the remisier that this stock would not do well, I started with 4k of Jumbo stocks at $0.31 and took some profits at $0.65 when it hits a strong resistance at $0.68. I have re entered another 4k at $0.575 when it reached the support level. I think the support level at $0.68 will help to support it and with the expansion to oversea like Vietnam. There might be more upside to come :)

Using Swot analysis. 

-Popular branding 
Most people remember Jumbo for seafood. In fact, it has other brands under its name like JPOT, Chui Huay Lim Teochew Cusinine, J Cafe, Jumbo catering, Jumbo eShop and one of my favorite: Ng Ah Sio Bak Kut Teh. I even bought quite a number of friends including Korean to Ng Ah Sio bak kut teh and they love it. 
-Strong management
I read up on their management and saw the interview with their CEO on channel 8 that time. From the speech of CEO, I believe they would continue to do well.

-Shortage and high cost of manpower
This is an common issue in service industry which they need to solve.
-Change in consumer demand
As the world is changing fast, the consumer demand also changes and it is important to take note of this.

They have expanded to China which they are doing well. Recently, they are expanding to Vietnam which would help to bring in more revenue. I believe there is still room for expansion oversea in China and our neighbor countries. 
-Online catering/home delivery service
There is growing trend of catering or home delivery service and the company can make use of this to expand further.
They can also bring other brands under their name to expand or come out with new brand to capture new market. I think Halal market is another big market for expansion.

-Change in oversea regulation
Due to expansion oversea, any change in oversea regulation might also affected the company.
-Currency exchange
As they are expanding oversea, there might be some Forex exchange losses.
-Competition from other F&B companies
Managing competition from other F&B companies and they will need to continue innovate to capture and maintain their customers. 

I believe that Jumbo group would continue to do well in the near future with the expansion into oversea market. However, it is not a call to buy or sell, please do your own due diligent. I will continue to share more information along the way. If you have any idea on how to help me on my writing, feel free to voice out. Thanks :)