+Portfolio Results vs Various Benchmarks (*Excluding Dividends & Other Gains)
*Dividends & other gains adds about 12.5% points to the cumulative returns in SGD terms or 13.5% to the cumulative returns in USD terms.
+Portfolio result is inclusive of cash held. % of cash and equities varies throughout the stated period. When opportunities are abound, cash could be 100% all invested, or when risk is high and potential return is low, the cycle would be reversed, resulting in an increase in % of cash held.
11 comments:
I have a website where I research stocks under five dollars. I have many years of experience with these type of stocks. I find that the best measurement of how undervalued a stock is is the price to sales ratio of a companies stock. The price to sales ratio is the market cap of a companies stock compared to the amount of sales the company does on an annual bases. A good example of a company with a low price to sales ratio is carrols restaurant group the company has a market cap of just 240 million dollars but does over 800 million dollars in annual sales the company is solidly profitable. In other words the price that the market is valuing the company at is 240 million dollars this is only about one fourth of what the company does in annual sales 800 million dollars. The stock currently trades at about 11 collars a share under the symbol {TAST} I think the stock could get to 55.00 dollars a share over the next five years. I base this on the current net profit margin of around 1.75% or 14 million dollars on sales of 800 hundred million dollars. If the companies sales were to increase by 50% or 400 million dollars to 1.2 billion dollars over the next five years. And if the companies net profit margin were to expand from 1.75% to 5% or 60 million dollars over the next five years. Than if the companies stock increased in price to where it was trading at a price earnings ratio of 20 this would put the stock at 55 dollars a share. This may seem to be a somewhat optimistic scenario but not really that much. There are many stocks that trade at much higher price earnings ratios when they become popular than 20 times earnings. I find that companies like carrols restaurant group are very rare. I also find that companies that have low price to sales ratios that are profitable or of decent quality tend to become takeover targets or get taken private by private equity firms or the management of the company or other companies in the same business. A good example of a popular stock with a very high price earnings ratios is whole foods market it trades at 35 times annual earnings. If anyone has any question as of the validity of the information presented here. I know that it may seem hard to believe but I would not post anything that I could not backup believe me' any stock broker financial planner or CPA that knows how to value stocks will confirm everything presented here.
Hi Brian,
Would you be able to chare your porfolio holdings?
Also how to compare against STI fi you are holding US stocks? USD vs S$ change?
MO,
Firstly, on like-for-like comparison between SG & US stocks is easy. The variable is the exchange rate to make both comparable on the same basis. Example, how do you compare, say UOB against Wells Fargo since the start of the year? UOB was SGD18.2 then and now SGD15.1. Wells Fargo was USD30.99 then and now $25.3. Exchange rate was 1.283 then and now 1.306. So converted to SGD, Wells Fargo is traded at SGD39.76 then, and now SGD33.04. Same goes for portfolio comparison whereby all the holdings are converted to the same basis.
As for individual portfolio holdings, I've held many different stocks through the years, so it is hard to list all here and held specifically on which period. As a guide, the main contributor for the return came from Wells Fargo, Amex & Coca Cola. The others contributes to a lesser extent and to some other extent, came from arbitrage plays. I also regard cash as a class of investment which is the default class of investment if I find no good buys.
MO,
I see you just started your blog and you wanted to buy out of flavor stocks. It is a great start. As for the stocks you listed, Apollo Education and WPO, I don't think they are that cheap. APOL was even much cheaper some time ago when the industry was threatened with cutbacks by the DOE for reimbursement to private education. APOL plunged from $40+ to $35 or something. Not sure how things are since then but the stock have went back up to where it was before.
Here's another sector that is also very out of flavor - Medical Devices & supplies. Main reason is because of cutbacks as well and also partly to the new tax on medical devices applicable from 2013 onwards. Companies includes St. Jude Medical, Medtronic, Covidien, Baxter, Becton Dickinson, SYK, SNN, ZMH, etc. Some of them you can get for about 10x adjusted earnings and most of them are high margin businesses.
Hi Brian,
Thank you for your reply and additional inputs. Yes, you are right that it was b'cos i saw APOL go from $40+ to $35 (it was $90 before that) i decided to buy some.
Anyway, APOL is a large holding of Donald Yatchman and what attracted me was that i don't think you can go wrong on education. I think America needs education to recover and APOL may just be in the position to do just that.It was once high flying and now beaten to the pulp. Similarly for COCO and more so WPO.
I read WPO's recent annual report and I believe the CEO's very candid about the education situation but more so I have a strange respect for Kaplan..I believe this may be a temporary situation and things should get better.
Brain, thanks for the medical stocks. I'll take a look at the companies you've mentioned. I have looked AMED, GTIV.
I definately do not know if they will recover but i guess that's where we want to try to be...out of favour areas..
Anyway, I've read your blogs and must say that it's inspiring and thought I reply...Google offered a link to set up a blog and I thought I just try.
Yes, Donald initiated his buy when APOL plunged. Not sure he still has it. Got to check out his latest 13HR filings.
There's another that Donald bought - Avon Products. Half of its price since early this year. But I don't think is a very well managed company. Poor cash flow conversion rate, poor inventory management. But question is if the price has fallen by so much as to cater for the impact for such gross mismanagement or if the potential for fixing the problem is high such that if the company can improve on its conversion rate in cash flow to about what their peers are doing, then I think it is a good buy.
Hi Brian,
I'm not too sure I know much about Avon products here. It may fall in my "difficult to access" bucket.
Do you follow? Not much insider activity in the SEC filings.
Avp is a consumer product company selling beauty and personal care products. Competitors include pg and Estée lauder. But avp sells through direct selling or independent representatives. Think of it like Amway. Their stronghold is in latin America. But has also fallen short there recently. I don't specifically follow them but if the price falls a lot, I'll read as much as I can on them.
Looks like an interesting journey.
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