Category: SG Stocks And Shares

AAC Tech (2018 HK)


AAC Tech (2018 HK)

Noted that the name of the blog is SGstocks&shares. but cant really find anything interesting in SG, so thought of writing a fun piece on HK. This is just a summary of the (brokers) research we have read, meant as an introduction and for fun learning. 
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AAC Tech (2018 HK) – HK$118

Seems to have bottomed out and may be attractive at current levels – key risks are the maturing smartphone market. A side play on Apple as it derives about half of its profit from Apple, and supplies 50% of acoustic components to Apple


About:

major supplier of miniature electronics components to Apple, Samsung and Chinese mobile phone brands – manufactures acoustic components, such as speakers and receivers, haptics, radio frequency (RF) solutions, and microelectromechanical systems (MEMS) for electronics products, from smartphones and tablets to wearable devices.

Valuation

Currently trading at 18.3x FY18F PE, 14.8x FY19F PE – bounce off its 10year average of 13.0x. – AAC has steadily enjoyed a valuation re-rating since 2010 (PE moving higher)- has reached as high as 22x PE (implied TP: $176, 16.1x EV/FY19 EBITDA)

Our near term TP is $131.2 (16.4x FY19F PE (+1SD of 10 year range), 12x EV/EBITDA

$139.2 (17.4x FY19F PE, 12.7x EV/EBITDA) – 5 year +1SD

AAC is projected to grow at an average of 20% from FY18-FY20. – PEG of about 0.8-0.9x

Concerns priced in? AAC Tech has retraced as much as 42% from its high. Previous pullbacks (except 2008) has been up to 38.7%. The pullback may have been due to the slowdown in smartphones. AAC has also cut its CAPEX budget for 2018 by 15% – up to 50% will be allocated to expanding the optics business, 20% to acoustic products, 5% to haptics, 25% to upgrades and maintenance.

Investment merits

Has about 40% market share and is the world’s largest smartphone acoustic components supplier.

Apple supply chain proxy : Supplies 50% of Apple’s acoustic components since 2010 (Also supply Samsung since 2011) – Apple est to formed about 47% of revenue.

Andriod haptics upgrade to provide catalyst? Currently most smartphones equipped with haptic components are iphones. With the gradual removal of physical home buttons, it could lead to an upgrade haptics from android phones (which we are already seeing in likes of S9 etc) Haptics can enhance user experience on smartphones which highlight edge to edge display and AR features. Haptics & RF modules have grown to become 50% of FY17 AAC’s revenue. Analysts are expecting a 2H recovery driven by Haptics which could also help improve his margins.

One of the leading players in Optics (Smartphone AR). AAC has expanded in the WLO market 5 years ago (which are used in 3D sensor manufacturing) – has the potential to grow significantly and penetrate into Apple’s 3D sensing suppliers. Currently low competition, due to high barriers of entry 

Concerns priced in? AAC Tech has retraced as much as 42% from its high. Previous pullbacks (except 2008) has been up to 38.7%. The pullback may have been due to the slowdown in smartphones. AAC has also cut its CAPEX budget for 2018 by 15% – up to 50% will be allocated to expanding the optics business, 20% to acoustic products, 5% to haptics, 25% to upgrades and maintenance.

Risks: Customer concentration (Apple forms nearly half of revenue) Collectively, Apple, Samsung, Huawei, Oppo and Xiaomi formed about 90% of revenue. Smartphone market slowdown/slow refresh cycle, Trade war


2Q18 SGSAS FX Trading Results

Since SG market has been rather quiet, I decided to do some early accounting to tabulate the profit and loss of my FX trading this afternoon.These are my trades on EURUSD. I don’t touch other currency pairings as i do not have the time to do so. I pref…

SGstocksandshares (SGSAS) 2018-05-05 14:20:00

Sunningdale- a value stock for the patient investor

Sunningdale has fallen as much as 48% from its high following a sector de-rating and a dismal 1Q18 results. There are other reports and blogs out there citing the main reasons of why it’s a value pick. Will not go too much into it here, you can read it else where, I will just summarized the main points below, and explain the rest of our thoughts.
  1. Attractive valuation: 3-3.3x FY18-FY19 EV/EBITDA, 6.6-8x FY18-FY19F PE, with a dividend yield of 5.5%
  2.  Attractive dividend yield (rising dividend, sustainable payout ratio) – General rising trend over the years, FY17 dividend of S$0.07 translates to dividend yield of 5.5%, payout ratio of 43%
  3.  Supported by good balance sheet and good cashflow generation (net D/E of 0.3%)
  4. Reputable management with skin in the game: Mr Koh Boon Hwee, the chairman of Sunningdale, is the largest shareholder of the company with a 15.8% stake according to Bloomberg. Of noteworthy, Mr Koh’s last purchase was in Apr 17, a 12.998m shares purchase at about S$1.717/share. (This is 43% of his current position)
  5. Potential takeover target
The recent entry of another value investor, LSV asset management, is hopefully another affirmation of the potential value that is current present in Sunningdale.


Where do we think the floor is (potentially and hopefully) at? Notwithstanding a financial crisis, Sunningdale has traded at a floor valuation of  near 2.2-2.7x EV/EBITDA. We use EV/EBITDA (to take into account the gearing of the group and because depreciation is typically a huge expense to companies like Sunningdale)- this implies a potential price floor of about 0.93-1.15 (if we work back based on consensus FY19 EBITDA) that’s about 10-26% away or 10-30c away or S$20-60m market cap away. (We will look more at the 10-30c rather than the share price of 0.93-1.15, as we think there are potential for the “price floor” to be nearer.. see below)

                  













our “floor” calculation is based on EV/EBITDA, where EV (Enterprise value = Market cap + net debt + minority interest etc). 

So assuming the consensus EBITDA is correct and constant, to reach our potential “floor EV/EBITDA” our EV has to come down by S$20-60m, which could come in either of the following ways: 
  1.       Share price has to drop more (i.e. drop in market cap) or
  2.       Sunningdale has to have more cash (i.e. lower net debt), which could be potentially from

a.  Proceeds from its potential disposal of its China factory. On 25 Apr 18, Sunnningdale announced its intention to dispose of its factory in Zhongshan, as it is a non-core and excess asset. Depending on how big it is, the potential sales proceeds may help to further improve the balance sheet of Sunningdale and further lower its EV/EBITDA valuation towards our “floor” 

b.  Cash accumulated and generated from operations (which will take time) average Free Cash Flow generated/year since FY14 was S$20m. Operating cashflow/EBITDA has averaged about 80% since FY09.

S$m

FY 2013

FY 2014

FY 2015

FY 2016

FY 2017

YE 31 Dec

Net Income

13.649

27.676

42.104

39.071

31.360

EBITDA

48.635

38.018

67.812

71.479

82.125

OCF/ Net income

319%

102%

162%

138%

123%

OCF/ EBITDA

90%

74%

101%

75%

47%

Cash From Operations

43.551

28.254

68.162

53.899

38.431

Capital Expenditures

-15.764

-13.658

-24.064

-36.031

-33.871

Free Cash Flow

27.787

14.596

44.098

17.868

4.560

Free Cash Flow Yield

11.2%

5.9%

17.8%

7.2%

1.8%

Net Debt

-19.463

33.915

-1.113

-13.828

-1.601

Dividends Paid

-4.549

-5.356

-7.418

-9.335

-15.985

DPS

0.035

0.04

0.05

0.06

0.07

Dividend Payout Ratio %

39.234

26.807

22.171

28.878

27.149

Our View:

Sunningdale ticks most of a value investor checklist of having a low P/B (0.6x), low PE (6-8x PE), good balance sheet (nearly 0 debt), good cashflow generation, good dividend yield and a reputable and good management with stakes in the company. 

Investing is about following your investment checklist and buying good companies when its out of favour (sentiments etc) 
When we look at Sunningdale now, the sector and the company is out of favour but do we think the sector will be in play again 1 day? (yes) 
Do we think the company can get out of its current rut? 
we dont know, but we think it can. The 1Q18 results is bad on first glance (-75% yoy) but its not end of the world. It is partly due to forex loss (excluding which, results is still -25%yoy to S$7m,  due to lower consumer/IT sales from lower demand etc which had a double whammy effect as margins took a hit with the lower utilisation) Manufacturing is a cyclical sector- i think the more important question is if Sunningdale are reacting quick and enough to customers and are they maintaining and gaining new projects? From the results commentary, i think they still are.. as they cited a stable order book, and continued business enquires from new and existing customers and potential new projects which will be commencing mass production. They are still continuing investing in new technology and machinery to be cost competitive, and building new manufacturing sites to be near customers (sounds reasonable and sensible to me)

In our short investing journey in the local market, (we think) there are less and less manufacturing companies listed in Singapore as we see them gets privatised and/or taken over. This could be either due to low valuations of Singapore manufacturing co. (relative to likes of HK etc) and/or consolidation of the industry as customers nowadays look to consolidate their suppliers (deal with a few rather many).  M&A activity is likely to continue as the industry consolidates and existing players look to grow their economies of scale.

That is why we think 

Sunningdale being one of the largest plastic precision companies in the world serving a diversified group of MNC customer base (no one customer forms more than 5% of the group’s total sales) makes them an attractive M&A target (for its scale and wide network of customers) one day. Even if they are not being acquired, they may also take the chance to buy over another company should the opportunity arises as with the case of First Engineering in late 2014, growing its profit and hopefully consequently their market cap and dividend.

Prices have found abit of a base here after falling more than 48%, and the emergence of some value back to the stock. If we assume a “floor” valuation based on EV/EBITDA, hopefully a floor is in sights, and may be even nearer should the disposal of Sunningdale’s China factory happen and be of a significant size. Even if it doesnt, Sunningdale has proven in the past to be highly cashflow generative which could help accumulate cash in its balance sheet and move it closer to its “floor valuation as time passes” 


Will buy some here, but leave some spare bullets. Remember this is still a very cyclical sector that is very dependent on the economy strength (there have been increasing concerns of a recession lurking around despite the current strength in the global economy), and not to mention how fragile the market has been recently. Investors have to take a medium- long term view on this, as we wait for earnings to hopefully recover (led by a respectable management) and the sector to be in play again

Reminiscences of a Stock Operator: Jesse Livermore

Book coverCover of Tom Rubython’s “Jesse Livermore — Boy Plunger: The Man Who Sold America Short in 1929.”Amazon.com

This is the man who inspired “the trader’s bible”: Jesse Lauriston Livermore, the mold for Edwin Lefevre’s “Reminiscences of a Stock Operator.”
Wall Street is obsessed with him.
Livermore led a life of brilliance and excess, surrounded by mistresses, scandals, money, and bankruptcy. He was a legendary trader who played big and made millions during the crash of 1929.
But by 1934, Livermore would have depleted the $100 million fortune he earned on the stock market just five years earlier. He declared a third bankruptcy, went through his second divorce, and committed suicide in 1940 — the newspapers then detailing his scandals rather than the achievements of his earlier days.
This is his life.

Jesse Livermore was born in 1877 to a family of farmers and learned to read and write by the time he was 3 1/2.

Jesse Livermore was born in 1877 to a family of farmers and learned to read and write by the time he was 3 1/2.

Photo of South Acton, Massachusetts.Wikimedia Commons

The youngest of three and a surprise baby, Livermore received almost no attention from his father, though his mother was determined to raise Jesse Livermore on the “finer things in life” — and Livermore picked up quickly. 
He learned to read and write by the time he was 3 and a half. By the time he was 5, he was reading newspapers and devouring the financial pages.
But his father was a pragmatist. When Jesse turned 14, Jesse Livermore’s father pulled him out of school to make money farming. 
Young and determined, Livermore left home by carriage.

At 14, he charmed his way into a job as a board boy at banking company, Paine Webber.

At 14, he charmed his way into a job as a board boy at banking company, Paine Webber.

A Paine Webber office in 1920. Livermore would start off his career as a board boy at a Paine Webber office in Boston.Wikimedia Commons

Instead of going to the address set by his mother, young Jesse Livermore persuaded the driver to stop at Paine Webber, a Boston stockbroker.
He was enthralled. 
At the time, Livermore appeared six years older than his age, and “people immediately trusted him and … Jesse Livermore always repaid that trust,” Rubython wrote. 
He got a job as a Paine Webber board boy on $5 a week.

He bought his first share at 15 and got a profit of $3.12 from $5 after teaching himself about trends.

He bought his first share at 15 and got a profit of $3.12 from $5 after teaching himself about trends.

The inside of a bucket shop would look something like this, with a board boy writing numbers on a board that had been telegrammed in, and speculators watching anxiously.The Library of Congress

Livermore tracked the ticker numbers in his journal and realized there was nothing random about them.
Finally, at 15, Livermore decided to take a dip with a miniscule portion of the profits he had, and earned a profit of $3.12 by putting down $5 at a bucket shop. In a matter of weeks, Livermore’s earnings at the bucket shops exceeded his earnings at Paine Webber.
He left the broker at 16 and started trading in Boston’s bucket shops.

But Livermore always won … and the bucket shops took notice. They kicked him out repeatedly. He put on a beard.

But Livermore always won ... and the bucket shops took notice. They kicked him out repeatedly. He put on a beard.

Jesse Livermore, “Boy Plunger of Wall St,” himself could never quite grow a beard.AP Images

He would simply don disguises — a beard — to get under the radar.
Eventually he was permanently banned, though he carried home a small fortune — $10,000.

Livermore decided it was time to challenge his abilities in 1899. He went to New York and married a woman he had known for a few weeks.

Livermore decided it was time to challenge his abilities in 1899. He went to New York and married a woman he had known for a few weeks.

The earlier days of the New York Stock Exchange.Wikimedia Commons

In the same year he would meet his wife, Nettie Jordan. They would be married within a few weeks of meeting, and they would be separated within a few months of marriage. 
He had lost everything by playing by the ticker’s number, which lagged 30 to 40 minutes behind the real-time market numbers.
He had asked Nettie to pawn off some of the jewels he had gifted her to trade again, and she was incensed.

Defeated but confident, Livermore went back to basics. He started making money at St. Louis bucket shops.

Defeated but confident, Livermore went back to basics. He started making money at St. Louis bucket shops.

Union Station in St. Louis, the largest and busiest train station in the world when it opened in 1894. Livermore would’ve likely passed through the station upon entering the city.National Archives and Records Administration

That was before the owners recognized him as “Jesse Livermore.” Since the shops no longer accepted him, he sent in someone to trade for him and dragged out $5,000 from the shops.

In 1901, Livermore made money almost effortlessly, before losing it all trading cotton.

In 1901, Livermore made money almost effortlessly, before losing it all trading cotton.

An image from 1901 of Pierrepont Morgan as a bull blowing bubbles to hungry investors. Morgan was credited with creating the bull conditions.Wikimedia Commons

Livermore had returned to Wall Street to a roaring bull market in 1901. Then 24, he would make $50,000 — and lose it trading cotton.
He would also continue to trade conservatively, too afraid of going too far.
“When I should have made $20,000, I made $2,000,” he said. In the meantime, he would enjoy his life as an attractive, wealthy bachelor in the city. 

At 28, Livermore had $100,000 to his name by 1906 — but he was losing confidence. So he went on vacation to Palm Beach, but not before he decided to short Union Pacific stock.

At 28, Livermore had $100,000 to his name by 1906 — but he was losing confidence. So he went on vacation to Palm Beach, but not before he decided to short Union Pacific stock.

The lavish Breakers Hotel in Palm Beach, where Livermore would spend vacations gambling and socializing with Beach Club owner, Ed Bradley.Wikimedia Commons

His conservatism combined with his inconsistent history of wins of the stock market made him question his long-term ability to trade stock. So he decided to take a break at Palm Beach — it turned out to be a turning point in his life.
Livermore had a “psychic surge” he’d never felt before and decided to short Union Pacific stock.

His friends all thought he was crazy, or had insider information. Union Pacific stock was going up the whole time.

His friends all thought he was crazy, or had insider information. Union Pacific stock was going up the whole time.

A Union Pacific 9043 locomotive, built in 1929.Wikimedia Commons

He returned to the city, and then heard about San Francisco’s earthquake — which caused Union Pacific’s stock to go down. Suddenly Livermore had made $250,000 — though he rued his caution since the market continued to fall after he covered.
His friends all thought he was crazy or had insider information.

Livermore listened to a mentor and decided not to turn his position around — and later discovered shorting the stock cost him $40,000.

Livermore listened to a mentor and decided not to turn his position around — and later discovered shorting the stock cost him $40,000.

Edward Francis Hutton in 1916.Wikimedia Commons

Not long after, Livermore tried to buy Union Pacific stock, seeing the proper conditions to buy in the numbers.
But an old friend, Ed Hutton, who had no investments in the company, went out of his way to call Livermore and warn him against the move. Hutton turned out to be completely wrong.
Livermore blamed himself for taking the tip.

Livermore earned the reputation of a hero in the crash of 1907. As the stock market started plunging, he went short on a hunch.

Livermore earned the reputation of a hero in the crash of 1907. As the stock market started plunging, he went short on a hunch.

John Pierpont Morgan, who would put millions into banks in order to prop up the economy. He was one of Livermore’s personal heroes.WIkimedia Commons

Livermore earned his largest sum yet: $1 million in a single day.
But seeing the market in crisis, Livermore decided to do the right and wise thing. He started buying all that he could carry (in part at the behest of JP Morgan). His buying led many other Wall Streeters to do the same — and the market started to recover.
Livermore also gained hero status. By following his lead, many of his peers had become rich.

He bought a $200,000 yacht, a rail car, and an apartment on the Upper West Side. He joined the most exclusive clubs and had a stream of mistresses.

He bought a $200,000 yacht, a rail car, and an apartment on the Upper West Side. He joined the most exclusive clubs and had a stream of mistresses.

JP Morgan’s yacht, Corsair. Livermore would buy a railcar in order to emulate Morgan.Public Domain/Wikipedia

In a year, he went from zero to $3 million and entered a new class of wealth.
But the more he bought, the higher the cost of maintenance. Soon, Livermore returned to the stock market.

In 1908 Livermore was betrayed by a “friend” — and paid millions for it.

In 1908 Livermore was betrayed by a "friend" — and paid millions for it.

An 1881 cartoon titled “How the Inexperienced Lose their heads,” showing the cut-throat Wall Street culture which took Livermore time to learn.The Library of Congress

Livermore had $5 million to his name and earned his moniker “boy plunger” — before losing it all trading cotton in the Chicago commodities market.
He had listened to Teddy Price, a famed cotton trader — and he couldn’t explain why he had listened since he knew the position was wrong. While Price told Livermore to continue buying, Price himself sold, along with the rest of the growers. 
Livermore was sunk.

He was bankrupt for a year before he made it all back. Then, at 40, he proposed to 22-year-old Dorothy of the Ziegfeld Follies.

He was bankrupt for a year before he made it all back. Then, at 40, he proposed to 22-year-old Dorothy of the Ziegfeld Follies.

The Ziegfeld Follies on stage. In later years, Livermore would have affairs with several of the dancers.Via New York Public Library

Bankruptcy was inevitable in 1915. The stock he had bought in 1907 to ameliorate the market crash came back to cushion his fall during to succeeding years as the market went through a long bear market.
A year later, he made $5 million back riding the bull market.
Then, after a long and highly publicized divorce from Nettie Jordan (including a stunt where he hired a private investigator to steal back his car), he was finally married to Dorothy, a Ziegfeld Follies dancer. 

Dorothy and Livermore would have their first son, Jesse Livermore II, in 1919. By 1922, the couple’s second son, Paul, was on his way.

Dorothy and Livermore would have their first son, Jesse Livermore II, in 1919. By 1922, the couple's second son, Paul, was on his way.

Dorothy Livermore and her sons, Jesse Jr. and Paul in Santa Barbara after 1933.Associated Press

Livermore decided to buy an expensive property at Great Neck and left Dorothy with an empty check to furnish the house. 
They were moneyed, high-society, and wanted nothing. It was a period of overwhelming happiness for the family.

Livermore’s name also grew in the media, and people bought and sold based on his recommendations in the papers.

Livermore's name also grew in the media, and people bought and sold based on his recommendations in the papers.

Panoramic picture of Armour & Co.’s General Office, Union Stock Yards, Chicago, c. 1900. Livermore’s own offices likely resembled the setup — though on a smaller scale.Library of Congress

He established a formal trading operation — earning $15 million . Two years later, Livermore would move to a larger office with 60 staff members.  

Edwin Lefevre contacted Livermore in order to write ‘Reminiscence of a Stock Operator.’ It was published in 1923.

Edwin Lefevre contacted Livermore in order to write 'Reminiscence of a Stock Operator.' It was published in 1923.

Reminiscences of a Stock OperatorAmazon

At its publication, no one realized it was a thinly veiled disguise for Livermore’s own life, with a character named Laurie Livingston repeating the words Livermore had sat down and said to Lefevre.
It would do surprisingly well and spawn several reprints.
In the same year, Livermore second son was born.

Meanwhile, his notoriety continued to grow on Wall Street. He made $10 million trading wheat and corn in 1925.

Meanwhile, his notoriety continued to grow on Wall Street. He made $10 million trading wheat and corn in 1925.

The Library of Congress

He would make $10 million trading wheat and corn in 1925 on the Chicago Board of Trade — battling the famed bullish commodities trader Arthur Cutten for the ability to manipulate the market.

In 1927, two burglars broke into the Livermore’s home and held him and his wife at gunpoint.

In 1927, two burglars broke into the Livermore's home and held him and his wife at gunpoint.

Jesse LivermoreAP Images

Dorothy was surprisingly calm throughout the ordeal, talking the burglars into leaving some of their most valuable jewels behind. When they left, she persuaded the burglars to leave carefully and not to wake the children.
Despite the family’s happiness however, things were beginning to change. Dorothy’s drinking habits were getting out of hand.

Then Black Tuesday hit and the market crashed. Livermore made $100 million going short.

Then Black Tuesday hit and the market crashed. Livermore made $100 million going short.

Wall Street, 2 a.m., broker’s office: Clerks sleeping in office because of excessive work caused by heavy stock business.Library of Congress

By chance, Livermore felt something was moving in the market. He decided to live out of his office making trades in the days leading up to October 29.
As the news began spreading about traders who had lost everything on Black Tuesday, Dorothy Livermore and her mother at home in Evermore began panicking. When Jesse Livermore returned, they were crying about how they were ruined — not realizing he had made $100 million going short.

By 1932, Dorothy’s drinking habits, combined with Livermore’s affairs and their lavish spending habits, strained the relationship.

By 1932, Dorothy's drinking habits, combined with Livermore's affairs and their lavish spending habits, strained the relationship.

Dorothy Livermore with her two sons, Paul, right, Jesse Jr., center right, and her younger husband, Walter Longcope. Associated Press

Throughout their relationship, Livermore had kept mistresses from everywhere — including the Ziegfeld Follies, where Dorothy still had friends. She was humiliated.
At the same time, Dorothy’s drinking habits had turned her from the life of the party into an undignified drunk.
Dorothy asked for quick divorce and received the modest settlement of $10 million. She took custody of the boys as well as the house. On the same day, she married a younger man — a former prohibition officer.

At 56, Livermore, no longer young nor truly wealthy, decided to spend the last of his money on vacation — where he met his third wife.

At 56, Livermore, no longer young nor truly wealthy, decided to spend the last of his money on vacation — where he met his third wife.

Harriet Metz and Jesse Livermore not long after meeting in 1934.Associated Press

He met the American singer Harriet Metz in Vienna. Four times widowed by suicides, she had her own money from those deaths. 
Livermore planned on using the vacation to recuperate and make a comeback from inevitable bankruptcy upon his return to New York. But he was also emotionally worn out.

Dorothy attempted to keep up the lavish lifestyle her ex-husband had given her, but didn’t have the funds. She sold the Great Neck house. The sale of a home that had been part of the family for a decade hurt Livermore.

Dorothy attempted to keep up the lavish lifestyle her ex-husband had given her, but didn't have the funds. She sold the Great Neck house. The sale of a home that had been part of the family for a decade hurt Livermore.

Display in an action window, 1938.The Library of Congress

The house had come with butlers, maids, cooks, gardeners and more — and $10 million was not enough to keep it running. Dorothy had divorced her new husband. Livermore sank deeper into depression. The house has represented a decade of family and joy, and it was sold and torn down.
Jewels and an inscribed wedding ring that Livermore had given Dorothy were sold for a few dollars — Livermore felt humiliated.
The house and renovations had cost Livermore $3.5 million. Dorothy sold it all for $222,000.

A year later, Livermore was forced to declare a third bankruptcy.

A year later, Livermore was forced to declare a third bankruptcy.

Bankers are shown in a huddle during a recess when they were testifying before the Securities and Exchange in 1937.The Library of Congress

It was Livermore’s third time, but as before, he was confident he could make a return to the market.
He had friends and had done it before.
But that third and final era of debt in his 60s would be fatal. Though Livermore had famously returned to the stock market twice before, the creation of the SEC and loss of the motivation that had prompted his previous phoenix risings would lead to a dead end.

In 1935, Dorothy Livermore shot their son Jesse Livermore Jr. while in the middle of a drunken spat.

In 1935, Dorothy Livermore shot their son Jesse Livermore Jr. while in the middle of a drunken spat.

Jesse Livermore Jr. was shot by his mother, Dorothea Longcope, Thanksgiving night, here shown with his mother on his return home in 1936. Their attorney is pictured center.Associated Press

Jesse had always been a problem child, drinking like his mother and sleeping with her friends.
On Thanksgiving, Dorothy and her new husband had lunch with her two sons. After the meal Dorothy sat down and began drinking liberally.
Jesse Livermore Jr., upset over her deteriorating drinking habits, finished off the bottle. His mother said, “I’d rather see you dead than drinking that way,” to which he replied, “you don’t have the nerve to shoot me” and handed her a gun.
She was inebriated, and after a prolonged argument, the gun went off.
She was taken in for questioning, Jesse Jr. narrowly survived, and she was cleared of charges.
The situation added stress to Livermore’s life.

Jesse Livermore began to realize after a series of family tragedies and the emergence of the SEC that he might not trade the same ever again.

Jesse Livermore began to realize after a series of family tragedies and the emergence of the SEC that he might not trade the same ever again.

Jesse Livermore with wife, Harriet Metz the day before his death.Associated Press

His wife’s fortune also supported him comfortably enough that he felt no urgency to trade.
In 1940, Livermore’s book, “How to Trade in Stocks,” was published, though it was never as popular as Lefevre’s work.
“No man can always have adequate reasons for buying or selling stocks daily — or sufficient knowledge to make his play an intelligent play,” he said to Lefevre.

And in the same year, Livermore shot himself in the coatroom of the Sherry Netherland Hotel in New York.

And in the same year, Livermore shot himself in the coatroom of the Sherry Netherland Hotel in New York.

Central Park Plaza at the pond in New York. The Sherry Netherland is the second-tallest building in the picture.Wikimedia Commons

According to Rubython, his wife’s $7 million fortune had lulled him into a sense of comfort and killed the desperation to win he had in his youth.
He felt as if he was losing himself.

He left nearly no money to his children. Jesse Livermore Jr. later committed suicide.

He left nearly no money to his children. Jesse Livermore Jr. later committed suicide.

Jesse Livemore Jr. arrives at a New York hotel, November 28, 1940, where his father, 62-year-old onetime “boy wonder” of Wall Street and then went bankrupt, was found shot to death.Associated Press

What little he had allocated to their trust funds had devalued over the years. Jesse Livermore Jr. would also fall into the habits of his alcoholic mother and kill himself in 1975 after shooting his beloved dog while drunk and attempting to shoot a police officer.

As did Jesse Livermore Jr.’s son.

As did Jesse Livermore Jr.'s son.

In the wheat pit of the Board of Trade of the city of Chicago, 1920.Library Of Congress

“There is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again,” Lefevre wrote.

Though his money didn’t last, his wisdom stayed with generations of traders, and his mistakes became the encouragement and lessons for traders today.

Though his money didn't last, his wisdom stayed with generations of traders, and his mistakes became the encouragement and lessons for traders today.

Jordan Kessler, son of trader Glenn Kessler,uses his father’s mobile phone and badge on the floor of the New York Stock Exchange, November 28, 2014.REUTERS/Brendan McDermid

Reposting from : http://www.businessinsider.com/the-life-of-jesse-livermore-2015-7








Market and Politics

Politics has been overshadowing the markets in the recent months. Just when US China trade war seems to subside, Trump went on twitter to warn Russia that  ‘missiles are coming.’

War is never a good thing for the equity markets. And so DJ dropped 200 points last night, Nikkei too a muted sell off. SG will be opening next, which i think will be possibly down too at the end day? Oil price came up and so is gold, and likewise USD dipped. European Central Bank President Draghi, who spoke on Wednesday morning that he is confident that inflation and wages will rise as the economy improves. He doesn’t feel that there will be a big impact from U.S.-Chinese trade tensions but the effect on confidence could be important.

Putting personal thoughts on Trump aside, this volatility does bring about some swings in the market, allowing buyers and sellers to fulfill their positions. Still not forgetting the current global market is stronger than before with solid GDP and other economic data, it is 1 of the reasons why market may continue to rally. Thus buying on dips will prove to be an excellent strategy.

Yet on the other hand the risk of buying on dips is that the current bull market is coming 10 years old since 2018. In every cyclical market cycle, the bears come after the bulls. Which also loosely translated that there should be a major correction/crash expectedly. As to when will that be, my guess is as good as yours.

Trading on blue chip shares should still be the way to go. It ensures liquidity and confidence. Should any major sell off occurs, holding on to a bluechip is still much better than anything else. That said, there are some bluechips like SPH that may be suitable for speculators only (readership has been on a decline, Q results are usually down’)

Sharing my 2 cents in a private email to my clients and friends. Feel free to share with me your thoughts too if any

MARKET OVERVIEW
– Expect some profit-taking and risk aversion amid escalating global geopolitical tensions after US President Trump threatened missile strikes against Syria
– Oil-linked stocks could gain as crude surged 2% to a 3-year high of US$66.82/bbl.
– Technically, the STI has closed the breakdown gap at 3,485 but remains trapped within the broad downtrend channel between 3,375 and 3,520.

POSITIVE NEWS
*SIA Engineering
– Signed an In-flight entertainment and connectivity maintenance agreement with Thales for an undisclosed sum, to support SIA’s fleet of A350 XWB aircraft for an initial 10 years.
– Trades at 21.4x forward P/E with 4.1% dividend yield.
– MKE has a Hold with TP of $3.50.

*Kim Heng Offshore & Marine
– Secured a one-year charter contract for two anchor handling tug/supply vessels from a leading oil major in Malaysia for an undisclosed amount.
– Loss-making and trades at 0.84x P/B.

*Grand Banks Yachts
– Eastbay 44 luxury boat will make its debut at the 2018 Singapore Yacht Show on Apr 12-15.
– Since its European debut in Jan, it has sold 12 units of the latest Eastbay model.
– Trades at 47x trailing P/E and 1.21x P/B.

NEGATIVE NEWS
*ST Engineering
– Its aerospace arm secured $510m new contracts in 1Q18, ranging from heavy maintenance to engine wash.
– This is 54% lower than the orders won in 1Q17.
– Trades at 20.7x forward P/E with 4.1% dividend yield.
– MKE has a Buy with TP of $4.15.

*Silverlake Axis
– Sold 0.3m Global Infotech (GIT) shares for Rmb3.8m (RM2.3m) or Rmb11.20 each.
– To recap, the group intended to monetise up to 19.2m GIT shares after it ceased to be an associate.
– The transaction is estimated to book a net disposal loss of RM0.68m.
– Trades at 0.53x P/E.

*Lippo Malls Retail Trust
– New tax regulations are expected to negatively affect future DPU as service and utilities recovery charges will now be subject to 10% withholding tax.
– On a proforma basis, the new regulations would cut FY17 distributable income by 7% to $90.2m, while DPU would fall to 3.19¢ (-7.3%).
– This implies a pro forma yield of 8.4%. Last traded at 1.18x P/B.

*Midas
– Received a letter of demand from Advanced Manufacturing Industry Investment Fund for the early redemption of a Rmb400m loan extended to subsidiary Jilin Midas Aluminium Industries.
– The loan was guaranteed by Midas, its former chairman Chen Wei Ping and third party North East Industries.
– If loan is not repiad within 90 working days, an additional penalty will be imposed. The group claims that it was previously unaware of the loan guarantee.
– Trading in the counter has been suspended since Feb 8.

NEUTRAL NEWS
*Lian Beng
– Spinning off the property development unit, SLB Development on Catalist board.
– SLB is offering 238m shares at $0.23 apiece, comprising 8m public shares and 230m placement shares.
– Post-IPO, the group will retain 73.9% interest in SLB.
– Net proceeds of $51.4m will go towards replenishing its land bank (32.9%), funding development projects and working capital purposes (33.6%), and the remaining will be used for loan repayment.
– SLB has 9 ongoing residential, mixed-use, industrial projects and 6 pipeline developments (Singapore: 5, China: 1) totalling 4.6m sf with gross development value of $892m and estimated development profit of $136m.
– IPO will close on 18 Apr and trading is slated to begin on 20 Apr.
– Lian Beng trades at 6.6x trailing P/E and 0.52x P/B.

*Datapulse
– Daughter of co-founder and former finance director Ng Bie Tjin has proposed a cash distribution of 32¢ per share. This compares to a 1¢ special dividend declared by the company. Ng and her family vehicle Uniseraya Holdings own 16% of the group.
– The group is embroiled in high profile feud over its controversial business diversification and acquisition of Malaysian haircare products maker Wayco Manufacturing.
– An EGM has been requisitioned on Apr 20 to oust four directors appointed following the entry of new 29% shareholder, Ng Siew Hong last year.
– SGX has also questioned the board appointments, its hiring of an independent reviewer and corporate governance related to the Wayco acquisition.

*Tiong Seng
– Raised its effective interest in Tiong Seng (Tianjin) Project Management and Consultancy to 100% (prior: 99%) for Rmb1.4m.
– Additionally, the company formed a 26:30:22:22 JVCo with three other China-based partners to undertake prefabrication business in China.
– Trades at 5.5x trailing P/E.

3 Stocks To Look At Now

This week, USD has been on a rise. And the weekly chart of STI looks to set for a correction to 3520 for this week before any chance that the rally may continue. At the same time, FOMC meeting is on 1 May. So probably market should be relatively quiet …

Monday, April 9, 2018

MARKET OVERVIEW
– The US-China trade tiff will continue to dominate headlines and overhang sentiment with US President Trump’s latest tweet that China will buckle first on its trade policy, while investors await China President’s Xi’s keynote address at the Boao Forum tomorrow.
– At home, focus will be on the advanced 1Q18 GDP growth and MAS policy statement this Fri, with expectations for a shift from neutral stance to a modest appreciation of SGD.
– Technically, the STI is likely to trade within its downward channel between 3.370 and 3,480 in the near term.

CORPORATE RESULTS
*SPH REIT
– Flat 2QFY18 DPU of 1.4¢ met expectations.
– Gross revenue and NPI dipped to $53.6m (-0.8%) and $42.3m (-1.1%) on lower rental income from Paragon shopping mall.
– While both its properties continued to enjoy full occupancy, negative rental reversions were recorded in 1HFY18 at Paragon (-7.1%) and The Clementi Mall (-2.5%) for new and renewed lease, representing 16.4% of portfolio NLA.
– Portfolio WALE held steady q/q at 2.1 years, with 8.2% of NLA due for expiry in FY18 (1QFY18: 13.3%).
– Aggregate leverage stood at 25.4% with average tenor extended to 2.2 years (1QFY18: 1.8 years).
– Trades at an annualised 1QFY18 yield of 5.6% and 0.94x P/B.

POSITIVE NEWS
*KrisEnergy
– KrisEnergy appointed major shareholder Keppel Corp as its preferred contractor for offshore O&G work.
– The agreement includes newbuild, repair, conversion and upgrading of marine assets and/ or vessels, as well as leasing and chartering of marine vessels.
– Loss-making and trades at 0.66x P/B.

*Global Dragon (formerly TMC Education)
– Won the en bloc tender to acquire the freehold Katong Omega Apartments for $46.31m.
– Land area of the 18-unit property is 2,592 sqm with plot ratio of 1.4.
– Including development charge of $2.7m, and 10% of bonus balcony, the property may yield potential gfa of 42,959 sf, translating to a land rate of $1,141 psf ppr.
– Trades at 2.05x P/B.

NEUTRAL NEWS
*Keppel Corp
– The leniency agreement entered by Keppel with the Public Prosecutor’s Office in Brazil has been approved and has become effective.
– To recap, the group reached a US$422m global resolution with criminal authorities in the US, Brazil and Singapore in Dec ’17 in relation to corrupt payments made by the group’s former agent in Brazil.
– Trades at 14.3x forward P/E.

*M1
– Subscribed additional preference shares in Trakomatic via two tranches of $1.5m each.
– The group now holds 25% of the enlarged share capital of Trakomatic, which will become an associate of the group.
– Trakomatic is B2B video analytics solutions provider, powering smart sensors and big data and targets retailers and tourist attractions.
– Trades at 13.2x forward P/E with dividend yield of 6.6%.

*AusGroup
– Proposed a renounceable non-underwritten 2-for-1 rights issue at $0.35 each, attached with two detachable warrants with exercise price of $0.05 apiece.
– Maximum proceeds of $62.6m will be used for partial redemption of notes and working capital purposes.

Market Crash? What To Do?

Worries over intensifying trade war could return to the forefront as China rolls out new tariffs on meat, fruit and other US imports totaling 128 products, retaliation against US taxes on steel and aluminum.  The market has been in a whipsaw …

Whatsapp Group for SG Stock Sharing

When I started this blog, it is meant for my personal bookmarking and referencing. Not to mention, it helps to document my thoughts too. And as the years passed, the blog has evolved over time, becoming an online gathering point to meet acquaintances a…