Purchase of Spackman Entertainment, Jumbo Group & GLP

spackman-entertainment-groupOn 5/12/16, I bought into Spackman Entertainment at $0.143. For me, Spackman Entertainment is a catalyst play for the short term. There are a number of catalysts that I felt presented an attractive risk to reward ratio. The most important one would be that it had divested its loss-making asset Optus Pictures Limited, which should drive costs much lower. I have always viewed divestments of continuously loss-making businesses in a positive light – it shows management’s willingness to adapt and focus on its more profitable assets, a strategy I believe will reward investors in time. Keeping and focusing on the more profitable Zip Cinemas which boasts a stronger track record of hits is a good call. The company has also a 27.2% share ownership in Spackman Media group, South Korea’s largest entertainment agency, which analysts believe to be worth around US$45 million, approximately around its current market capitalization. However, my take is still to view analysts opinions conservatively so I am not banking on this valuation alone. Nevertheless, any move to create value for shareholders is always welcomed. The last catalyst would be the release of the highly anticipated movie “The Masters”, premiering this month. There has been alot of hype and buzz around this movie due to its list of A-listers starring in the show. I am however, more interested and attracted to the former two catalysts as the movie business is volatile in nature and it is hard to know whether the movie will actually do well. Nevertheless, I have caught one of the movies made by Zip Cinemas – “My Brilliant Life” and was quite impressed by it. Let’s see how this catalyst play works out in time to come.

 

jumbo-group-facebookOn the same day, I also bought into Jumbo Group at $0.64. I have always wanted to own shares in Jumbo since its IPO, but the price never went to a level which was attractive enough for me. At the current price, I still feel it is not undervalued but rather more towards being fairly valued. The reason why I chose to invest at its current high is because I am a firm believer of its scalable business model, and its opportunity for growth in the future. Its brands sell high quality food and its business is able to produce respectable margins and ROEs in a very very competitive industry. The bad part about waiting to purchase a solid stock at an attractive price is when the business continues chugging along and demanding higher valuations. I rather accumulate now slowly and continue to buy more when opportunities present itself along the way, than to miss the boat altogether. I view this investment as a long term holding.

global_logistics_propertiesMy final purchase of the day was into GLP at $2.20. Over the past 3 weeks, I have been tracking GLP and was contemplating buying it when it was around $2.00. Nevertheless, due to my indecision, I missed the mini rally of its shares. My reason for buying GLP is simple – it is a market leader in its business, the logistics industry is growing, its asset management arm seems promising and its price is fair. Recently, GLP is undertaking a strategic review of its business to enhance shareholder value after prompting by GIC. I am not sure what will result from this review but I remain confident that GLP will continue to grow in the future. Its asset management arm is something that I am rather optimistic of, as it reminds me of the strong business model that ARA possessed. Being a property developer and asset manager allows it to recycle its funds and earn recurring fees at the same time. Although I am not a big fan of property developers, its asset management arm gives me some comfort in knowing that there is an element of recurring revenues and growth as its AUM grows. I will continue to track the ongoings of this company going forward.

Finally, on 8/12/16, I increased my stake in ISOTeam at a purchase price of $0.385. I remain optimistic about the company’s growth and my thesis remains the same. With my recent purchases, my portfolio is around 40% invested in the stock market. I am still tracking a few more stocks but currently am contented just waiting.

 

Disclaimer: The author owns shares in the abovementioned company. The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.

Purchase of CapitaRetail China Trust and AIMSAMP Reit

capita-retail-china-trustOn 15/11/16, I purchased shares of CapitaRetail China Trust at $1.375. I have always thought that the two Reits under Capitaland have been managed well. However, CapitaMall Trust always seemed to be trading at a premium to book value and I felt that its growth prospects were not as bright as that of CapitaRetail China Trust. CRCT has been sporting growing revenues and distributions ever since its IPO in 2006. I took the opportunity to load some shares when the market was a tad pessimistic during the last month. One key issue that I am concerned about would be its land lease agreement with the government, in which the company is not able to give a definite answer what would happen after the title expires as there has been no precedent with regards to an actual expiry of the land use title among its properties. I am still a strong believer in China’s urbanisation and its rising middle class which will provide tailwinds to CRCT’s growth. The threat of online retail, eg. AliBaba, TaoBao, etc is strong, but people will still need and want to patronise restaurants, cinemas, supermarkets, and entertain themselves.

At my purchase price of $1.375, the PB is 0.89 and the annualised dividend yield based on the 3Q16’s distribution would be 6.87%. 3Q16 earnings were hurt by a double whammy of a tax provision and appreciation of the SGD against the RMB. I classify CRCT as a long term holding in my portfolio.

 

AIMSAMP

On 18/11/16, I bought into AIMSAMP Reit at $1.29. I like the management of AIMSAMP Reit, where they have been actively managing their portfolio during the current industrial downturn. AIMSAMP Reit has been a long term holding in my portfolio since its initation in 2013 and I still hold on to my original thesis that it can still continue to grow organically by redeveloping its own properties. At my purchase price of $1.29, the PB is 0.88 while the annualised dividend yield based on 2Q17’s distribution is 8.53%.

I bought these two Reits to provide the income element and will be on the lookout for more yield stocks to add into my portfolio.

 

Disclaimer: The author owns shares in the abovementioned company. The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.