|ARA Asset Management||16.8||3.0%|
|Semb Corp Industries||9.9||4.0%|
|Portfolio PE||Portfolio Yield|
In my previous post I mentioned how a good deal kep corp was, today I was monitoring the price and it still remained at 8 times earnings even after announcement of the results and kepland deal. I was glad to initiate this position as I strongly believe that the selling down of marine stocks has kinda bottomed, as per my action on Semb Corp and Kep Corp.
I may be wrong but I do think I'm getting quite a comfortable amount of margin of safety, for example if kep corp earnings were to fall 20% in FY15 it would still trade at around 10 times earnings which is still pretty decent for this blue chip.
However I really didn't want to stretch out into a 6th stock as I still firmly believe in my strategy of staying focused instead of diversifying. I had a another quick look at my 5 core holdings and their fundamentals.
ARA - Record earnings coming for FY14, yet stock price is on a downtrend. Dragon fund 1 exit performance fees to help boost earnings in FY15.
Semb Corp - I expect them to maintain earnings, so FY 14 earnings should be comparable to FY 13. Utilities still growing well with India power plants coming online for FY 15, boosting earnings.
Starhub - Earnings still stable and the 20 cents dividends is still juicy. No growth at all but has been my super cash cow for over 5 years. Yield on cost is around 10%, my golden chicken.
ST Engineering -I mentioned the 5 reasons why it was a good buy, I still think of it as a decent defensive stock with a dividend yield of over 4% with 5% earnings growth rate.
Challenger - FY 14 earnings will probably drop 20%, pressures on rental and labor costs, Valore house brand has not been picking up well base on my on the ground research.
So of the 5 stocks, sadly I ended up cutting Challenger to make room for Kep corp. Challenger meant a lot to me as it was my earlier growth stocks which I had held for over 5 years, I wrote about it over here and was published by nextinsight too. Sometimes when you hold a stock for too long, you get too complacent to cut it off even when results have been disappointing. Today I threw away my emotions and when to be more practical, hope it doesn't come back to haunt me.
Good Bye Challenger, you will be missed...
"It's easy to make a mistake and do the opposite, pulling out the flowers and watering the weeds. If you're lucky enough to have one golden egg in your portfolio, it may not matter if you have a couple of rotten ones in there with it. Let's say you have a portfolio of six stocks. Two of them are average, two of them are below average, and one is a real loser. But you also have one stellar performer. Your Coca-Cola, your Gillette. A stock that reminds you why you invested in the first place. In other words, you don't have to be right all the time to do well in stocks. If you find one great growth company and own it long enough to let the profits run, the gains should more than offset mediocre results from other stocks in your portfolio." - Peter Lynch