SATS

SATS is a stock that is defying market trend lately. In a sea of red, it is one of the few shares that is green, and seemingly rising above market odds. In fact, fool.sg recently did a short write up on this stock.

Since I have SATS in my portfolio, the pressing question is always: 1) buy 2) hold or 3) sell. SATS is mainly in the Gateway Services and Food Solutions Business.

Pros:
1. Good dividends payout (3.9%)
2. High cashflow
3. Divested across APAC markets - JP, BJ, MC, TW
4. little competition in Singapore
5. Joint Venture with a leading meat processing company
6. CEO ex HSBC - should be good in managing cash flow and has proven so by managing cost
7. changi airport expansion in 2018 and 2025
8. Investment in high tech transportation of vaccines

Cons:
1. P/E ratio = 20.3
2. pressure from airline industry
3. bad reviews from glassdoor - low employee morale
4. rising labour cost
5. Revenue decreasing trend due to Food Solutions bringing in less revenue. Gateway solutions have not increased to offset fall.

A pretty mixed bag but pros seems to out weigh the cons. i vote hold and purchase more when price drops. However, if price continue increasing then i would consider selling and waiting as i don't quite like buying into high P/E stocks.

What i really like about this stock is : 1) management is moving into high tech transportation business 2) joint venture shows potential for growth

The Poverty Cycle

Like a typical female, I feel a need to have a network of female friends (or acquaintances) who are in a similar life stage as I am. Read: Working Mother With Young Kid. So, what better way to marry social media with this age old need than to join the myriad of facebook groups out there. 

It is an eyeopener. You "hear" about mothers who face a lot of issues with mother in laws, husbands, kids, colleagues, everyone. You are exposed to people that you won't really have a chance to talk to in the real world. Under the cover of anonymity - if there is really such a thing in today's online world, you hear stories and learn about the mindsets of others. 

It comes as a shock to me that in this virtual world, there are quite a number of mothers who are so young and so financially dependent on their husbands / families for support. Twenty-three year old with 2 kids age 4 and 2 talking about divorce, finding an admin job, trying to get maintenance.  Nineteen year old talking about living with in laws because they cannot apply for BTO since they do not meet the 21 year old age criteria. Young mothers complaining about not being able to get subsidies for their first BTO because they and their spouse do not have an income in the past year. 

Blows my mind. 

Here we are, talking about retirement and worrying about making money on our next trade. These women out there are far far far away from any form of financial independence. And what's worse is that the children they have are not going to have the fancy tuition, the stable family that children needs to thrive. Hell, they may not even get 3 meals in a day or a complete family. 

And i wonder, how did it become like this? Can these children grow up and be like us - wondering about savings and retirement and being financially independent? Can they get out of their poverty cycle? The odds are stack against them from the beginning. It is not only the poverty that their parents are in, but also the lack of maturity on the part of the parents. No job, no savings, impulsive behavior, the blame game, the victim mentality. I am not trying to judge, or rather i am trying not to judge, but i am awaken to the fact that there are so many people out there who actually will never ever be able to retire early. and as a mother, my heart goes out to their kids. 

I try not to be one of those who just criticise the government and then when asked what could be done better, turn around and say i am not paid millions so i don't have to think about that. If face with a problem, I want to be able to have some semblence of constructive thought than playing the victim or blaming others.  No, i am not trying to be noble. I am just trying to rescue my brain cells and to have a better attitude to life. You are what you think. 

But I can't see a way out for these kids. 

Education? Yes, provided the education field is really levelled. with the sprawling number of private centres and private investors backed tuition centres (read: knowledge universe), it is going to be a tough fight for these kids. And that is why i think private centres should be regulated. 

Subsidies? A lot of these mothers like to think that they should be paid for staying at home and that will solve a lot of issues. Maybe. But i am not in favour of handing fishes out if you are not sure the fish will be eaten by the right people. Teaching them to fish is definitely better. I am also not certain their kids would be able to do better in life than others. 

A mentor / mentee program? There are some social programs for kids. Maybe. 

I don't have a clue. 

ST Engineering - Buy or Sell?

ST Engineering has been on a downward trend. The initial reasons why i purchase this share is for dividends but i can't lose track of the profitability of the company. 

This is my first time attempting to make sense of the finance statements so let's give it a go! Grateful for any tips and tricks along the way!

ST Marine
- one of the subsidiaries of ST Engineering
- (36%) fall in EBIT 
- shipbuilding (one of three main areas of business beside ship repair and engineering) took a bit hit of (75%) for second quarter
- industry trend: Shipbuilding is in a difficult period due to too many shipping orders. Unlikely to trend up in near term. 

ST Kinetics
- one of the subsidiaries of ST Engineering
- (50)% fall in EBIT 
- automative dropped 89% 
- other areas would include: 

ST Electronics
- one of the few subsidiaries with higher profit of 10%
- software system up 33%

ST Aerospace
- (5%) in EBIT

Well, no good news at all, no wonder ST Engineering is on a downward trend. Better keep this on my watchlist. 

Grabbed this off Yahoo Finance. 

Market Cap (intraday)5: 11.41B Enterprise Value (Aug 29, 2014)3: 10.88B Trailing P/E (ttm, intraday): 19.57 Forward P/E (fye Dec 31, 2015)1: 18.30 PEG Ratio (5 yr expected)1: 2.34 Price/Sales (ttm): 1.74 Price/Book (mrq): 5.77 Enterprise Value/Revenue (ttm)3: 1.64 Enterprise Value/EBITDA (ttm)6: 13.77

Financial Highlights

Fiscal Year Fiscal Year Ends: 31 Dec Most Recent Quarter (mrq): Jun 30, 2014

Profitability Profit Margin (ttm): 8.59% Operating Margin (ttm): 9.60%

Management Effectiveness Return on Assets (ttm): 4.81% Return on Equity (ttm): 28.14%

Income Statement Revenue (ttm): 6.63B Revenue Per Share (ttm): 2.13 Qtrly Revenue Growth (yoy): -0.70% Gross Profit (ttm): 1.43B EBITDA (ttm)6: 789.72M Net Income Avl to Common (ttm): 569.31M Diluted EPS (ttm): 0.19 Qtrly Earnings Growth (yoy): -10.00%

Balance Sheet Total Cash (mrq): 1.61B Total Cash Per Share (mrq): 0.52 Total Debt (mrq): 983.98M Total Debt/Equity (mrq): 46.16 Current Ratio (mrq): 1.47 Book Value Per Share (mrq): 0.64

Cash Flow Statement Operating Cash Flow (ttm): 844.22M Levered Free Cash Flow (ttm): 118.87M

SIA Engineering

SIA Engineering just came out with their quarterly results and its a bad bad thing.

Revenue is up a mere 1.6%, but expenditure increased 4.5%.

Contribution from JV decreased by 28.8%. And they just inked a JV agreement with Boeing lately.

The plane industry isn't doing too well what with the recent spates of plane crashes. Pretty scary shit indeed. Will people still travel?

I think the answer to that question is still a resounding yes. The general prediction is yes, flight travel looks set to increase and more carriers will ply the ASEAN route. Perhaps there will be more budget travellers and not first class passenger anymore. But planes would still have to be serviced. I see their tie up with Boeing as a big plus sign that they will get better deals in the future. SIA Engineering would have to be careful to take care of costs.

my money is still on this one.

Moving to Share Builders Plan

Goodbye OCBC.

So i was a fan of the OCBC blue chip investment plan but i bid goodbye to it a few months ago when June 2014 came to an end. Why? The promotional period was over and the cost price was to increase to a minimum fee of $5 per transaction instead of the 0.3%. The fundamental of a DCA ETF is to keep cost low. I understand later that the promotion was continued which made me really annoyed because I had already sold my shares in the blue chip investment plan.

So annoying.

But moving on. I have moved to the Share Builders Plan and hopefully, there will be no change in the long run. So yes, $6 so i can buy a piece of mind for no more unwanted increase in costs! This is going to be used for a fund for my kid's education as well as my hubby's and I's semi-retirement fund.

I am not one of those parents who believe in planning my kid's future right down to the property they are going to buy. I shudder when I think of my financial adviser's kinda crazy advice to me - he told me to purchase a life insurance for my kid, and think about putting lots of money into some investment plan on a monthly basis so that when my kid grows up, i can help him buy a PROPERTY! WTF?! I am not sure if he was trying desperately to make a sale but he started talking about how it is very common among his clients. But i do believe in helping my kid get a leg up so if there is something that he is passionate about later, whether starting a business or furthering his education, then at least i have funds for him. But it is not going to be handed to him on a platter.

Anyway, that is my round up on my moving to Share Builders Plan.

Update: I am still going to use OCBC though for my SRS account. I know it doesn't really make sense but SBP is not linked to SRS. And OCBC has not enough sense to allow one person to pay for their blue chip plan via SRS and ordinary account.

Random Thoughts on Why Some People Spend More Than Others

There are a few ways to financial independence: 1) increase income 2) decrease spending 3) obtain income generating assets 4) marry rich 5) be born rich. 

Points 4 and 5 are out of my control. Point 1 and 3 is difficult for me at my current stage of life. Point 2, however, comes pretty easily for me. 

Unlike a lot of my peers, i don't feel the need to buy lots of new clothes, bags or shoes. I don't have the urge to purchase the next IT bag, or add to my very modest collection of branded bags. And I don't have the urge to go out to eat at fine dining restaurants, experience the coffee culture, explore expensive brunch places or eat at any Michelin star restaurant. My hobbies are relatively inexpensive - swimming, reading, spending time with my family and friends (although that may result in me blowing money on food when out with friends who do enjoy eating out), crafts and thinking about life. 

Which makes me wonder - why are some of us more prone to this desire to consume, to purchase, to spend? For that I turned to google and my own deep thoughts. 

1. Parental Influence. 

2. Advertising.

3. Peer Pressure. 

Parental Influence. 

My colleagues were all happily buying ferragamo shoes during a sale. When I queried the reason for this frenzy, the answer was surprisingly, it was a brand her mother, aunties all loved and hence, she also wanted to purchase ferragamo shoes when she is older. 

My friend clothed her baby in designer wear. Another of my friend remarked, so lucky! Baby gets to wear designer wear when she's so young. Another said, wow, baby will have good taste in clothes in future. Guess who is probably going to be an avid sucker of branded items?

Advertising

We are bombarded with this every single day - product placements in movies, endorsement by celebrities, commercials in all kinds of media. We are constantly being bombarded to buy, to consume, to purchase in order to feel happier, more successful, to have cleverer kids, to have a richer more fulfilling life. Corporations spend billions - yes billions to get you, me, our kids, to be suckered into this game of purchasing. I don't know about you, but i am going to be very careful what my kids watch on TV and on social media. Advertisers are going to reel your kids into this consumerism pattern real early. 

Peer Pressure

That's a tough one, even for me. I find it very difficult to talk to new people now. especially in Singapore, among certain groups of people. Conversations revolves around food places and food and food and food lately. i am not sure what is fueling the trend? I think my reluctance to food fads stems from the fact that i only really really love to eat homecook food. You go work and you see all these brands - shoes, bags, wallets, watches - i also want to own them all. Properties, cars, condos. oh well. 

Words of wisdom for all of us:

 

Portfolio and Dividends for May

D day = Dividends Day!

I am so excited. Ever since I decided to focus more on dividends stock, I am even more excited about collecting dividends. And May is a really good month for dividends players like me! 

So i am going to reveal my portfolio (for the first time ever) and the dividends received. 

Shares	Lots	Current Price (6 June)	Dividends for May
SPH	3	4.20	210
NOL	6	0.98	0
Keppel	1	10.7	300
Hyflux	4	1.22	96
Ascendas India Trust	6	0.79	139.20
Wilmar	2	3.24	110
AIMS AMP REIT	2	1.44	0
SIA Engr	1	5.02	0
ST Engr	2	3.72	0
Ascendas Hospitality Trust	4	0.745	0
Total dividends for MAY			855.20

This isn't enough to feed my lifestyle for a month. Based on my tracking, i need at least $3,800 per month, no thanks for my crazy mortgage. But yes, it is a nice bonus. Now to ensure i have more good shares that will give me good dividends play!