The under appreciated stock

A Pen Quote wrote several times about it actually. Amidst all the crashes and burns in the stock market caused by the devaluation of the CNY, this stock would theoretically be shielded from all external factors.

This stock is none other than Colex Holdings. You can read more about it here, here, here, here and here.

The stock market is very volatile lately. The recent correction experienced by STI could be attributed to:

1. Devaluation of Chinese Yuan
2. Softening of China's growth
3. Commodities rout
4. Sustained low oil prices
5. Fears of Fed rate hike
6. Weak GDP in Singapore
7. Over valued Chinese stock market
8. Greece (forever)

However, Colex positions itself to be fairly immune to any of the above factors. Being a pure Singapore play, regarded as a "necessity", and having long contracts given by the authorities (7 years), Colex earnings will be more or less shielded from all these macro events.

Yes, you heard it right, Colex is also spared from the dreaded rate hike. That's because it carries no debt on its books.

Zero debt, high cash flow, increasing EPS and stable business. Got to love this smelly business ain't it?

Last week they released their half year results and it was good as expected:

Revenue up 12.5%

PBT up 29.0%

PAT up 28.1%

EPS up from 1.74 to 2.23

- P/E at 12.6

- P/B at 1.44

Strong earnings growth

Gushing cash and room for increase in dividend payout

Looking at the half year results, looks like the annualised EPS will be at least 4.2 cents (30% growth).

Due to the low profile nature of this stock, there has been much excitement after the release of the earnings since last week. In fact, the share price dipped 9% from $0.32 to $0.29 with the general market weakness.

That shows that theory doesn't equate to reality.

However, over time, the market will act like a weighing machine. heh!

From 11 cent in 2010 to 29 cent today, that's a 163% increase with a capital gain CAGR of 21.4%. Seems like this is half of the EPS CAGR of 49.5%. However, that's just a 5 year period. The Motely Fools wrote an article recently (here) on how the share prices of Raffles Medical, Super, Fragrance and CWT exploded overtime after their EPS grew year on year.

Hopefully, Colex will follow so. I've accumulated some shares recently and will continue to do so when the market goes more volatile.

People seems to be missing out on this hidden little gem.

My portfolio went against STI and held its gain - PHEW!!

Huge sigh of relief though. A quick look at my performance for the month of July.

	Name	Portfolio %	Average price ($)	Div Yield on cost
1	SATS	17.72%	3.11	4.50%
2	M1	15.52%	3.63	5.20%
3	Singtel	10.78%	3.78	4.62%
4	Raffles Medical	9.41%	4.13	1.09%
5	Parkway Life	6.67%	2.34	4.83%
6	Sembcorp Industries	6.50%	4.56	3.51%
7	StarHub	5.77%	4.05	4.94%
8	Design Studio	5.63%	0.54	12.01%
9	CapitaMall Trust	5.54%	1.95	5.59%
10	Vicom	4.30%	6.04	4.35%
11	Sheng Siong	3.68%	0.68	4.48%
12	UOB	3.28%	23.05	3.90%
13	Old Chang Kee	2.47%	0.87	1.73%
14	SIIC Environment	1.43%	0.20	0%
15	Thai Beverage	1.31%	0.46	3.69%

*psst, why is it so hard to create a table with blogger?

LGRT performance

Expected Annual Dividends: $3,228 ($269/month)

Dividend Yield: 4.60%

Unrealised gain: 4.31%

Sectors: Telco, REIT, Banks, Aviation, O&G, Consumer products, Healthcare


STI Index (ES3)

Dividend Yield: 2.74%
Unrealised loss: down 5% (2 Jan $3.41, 31 Jul $3.24)

Recent Action

Quite relieved that my portfolio held up well despite the index registering a loss for the year. Thanks mainly to SATS, RMG, SS and Singtel holding up, partially dragged by M1 and SCI.

RMG

I've accumulated more RMG at $4.60 after its minor correction. I was quite lucky though, buying RMG at $4.60 early in the morning before it soaring to $4.79 at the end of the day.

Singtel

I've also accumulated more Singtel after recently tumbling as well. I could attribute the fall to:

1. XD $0.10

2. General market weakness

3. Telco sector weakness (again??) due to fourth telco

4. Australian dollars weakening (Optus makes up a huge portion of ST's profits).

Barring forex fluctuations, I still find Singtel's moat largely intact and this should drive its profits higher and higher. I found it a good chance to accumulate.

Design Studio

I wrote about DS and thus accumulated it. 1H2015 results were announced last Friday.

Revenue up 63%

Net Profit up 46%

Interim dividend up from 0.50 cents to 1.25 cents.

Will be accumulating more if possible.

CMT?

What about CMT? It has recently fallen close to $2. Well it looks attractive at the moment BUT I'm just going to wait until Fed raises the rate during September to wait for the aftershocks to occur. That'll be a good time to pick up quality REITs.

UOB

I'm also watching UOB like a Hawk. Sure, Q2 results are largely disappointing. But all in all, the bank is still a great bank (number 10 in the world, come on!).

With PE of 11 (DBS 12, OCBC 10) and Div yield of 4% (I didn't realise it is 4% now?), it sure looks yummy.

Looking for the next clear support before accumulating UOB. After all, my exposure to the financial sector has been very insignificant.

That's just some of my thoughts. These are not buy or sell calls, just some thoughts with regards to my personal portfolio. :)