Category: STEng

Sell @ $3.62

My last lots, the ones due to itchy fingers…. Was about to sell @ $3.61 for a tiny loss but suddenly someone added another 150,000 to the Buy Q. Got greedy and decided to Q higher instead… Hit a high of $3.66 before closing at $3.65… looks like back in demand! 😀

Sell @ $3.57

Contra off 2 buys, left my original "itchy finger" buy… 😀

Buy @ $3.53

Dropping with every buy…. low of $3.52 before it suddenly shot back up to $3.57 closer to 5pm and closing at $3.56… Phew… 😀

Buy @ $3.55

Average down the previous ones which I bought due to itchy fingers syndrome… BE average price is $3.60, more possible… 😀

From AR2014, big drop in Profits due to Aerospace & Land Systems segments,

 

Buy @ $3.59

Itchy fingers… new addition to portfolio. xd today and -18ct, a lot more than Div = 11ct. But, it actually went up a lot leading towards xd (was $3.48 end-Mar)…. 😀

Sell @ $3.87

My last lots… only made some kopi-$$. After selling, I read a DBSV report dated 1-Apr, which was very positive on STEng, with a target price of $4++…. Thank You DBSV!

This will be considered the end of this round of theYield Rotation Strategy for me. Some statistics,

• Transactions
  • First Buy = 3 Jan 14
    • No. of Buy Days = 13
    • Buy Range : $3.72 to $3.88
  • Last Sell = 2 Apr 14
    • No. of Sell Days = 6
    • Sell Range : $3.76 to $3.90
  • Profit / Loss Range (based on Buy Days) = -$157.69 to $309.61
    • No actual losses based on Sell Days ie. losses are adequately offset by profits
  • Time Frame = 3 mths ie. 1Q
• Total Turnover (Buy + Sell) = $511,253.58
  • Total Buy Value = $255,238.47
  • Total Sell Value = $256,015.11
    • => Net Profit = $776.64
    • Net Profit /  Average Buy Value per Buy Day = 3.96%

Going forward, my target price as calculated in a previous post,

• Conditions : 4% Yield @ 75% Payout (FY14)
• Target Price
  • After xd : $3.51 or $3.68 (assume 5% Growth in EPS)
  • During cd (+12ct) : $3.63 or $3.80 (assume 5% Growth in EPS)
    • Will have to monitor the Quarterly Results for EPS Growth

So…. barring any Itchy Fingers Syndrome, I won't be buying back unless it hits below $3.80… The best for me would be to move on to my next targets (end-Mar FY stocks) of the Yield Rotation Strategy…

 

Comments

• Yield Rotation Strategy worked out well for this time
  • But, have to be prepared to hold for long term if things do not work out well ie. target stocks have to be fundamentally strong and entry prices not at high valuations
• The absolute returns is insufficient to maintain daily expenses unless,
  • Committed $$ is enlarged substantially. Note that altho' the Average Per Buy Day is ~$20k, the highest committed amount may be >3x ie. when prices drop, more buys were done to average down
• Other strategies were also utilised eg.
  • Step Down Averaging – When prices are falling. Can be intra-day
  • Step Up Avergaing – When prices are rising, to sell in steps
  • Profit & Loss Offsets – Loss making buys are sold together with profitable ones

In conclusion, I had a lot of fun… but I didn't make a lot of $$… But, I'm glad I didn't lose $$ or get stuck into a long term hold….The sudden cut in Dividend Payout Rate changed the whole landscape for me and contributed to my urgency to get rid of my holdings. To play safe, I'd rather wait to see the "EPS Growth" in their future Quarterly reports before I raise my target Buy price….

Note : Perhaps a better strategy would be to buy near the lows (that'd require applying a bigger margin of safety before doing any buys) and selling near the highs (must not have my kind of "kan-cheong spider" temperament)….:D

 

Sell @ $3.78, $3.79, $3.82

Cleared all my recent buys, left the first entry buy (bought at higher prices).

My % returns for this experiment on David's Yield Rotation Strategy has been very tiny. Possible reasons.

• Reduction of Dividend Payout from 90% to 80% (to be further reduced to 75% for next FY), resulting in a Yield of <4%.
• US FED have indicated a likely interest rate hike earlier than previously expected
• Crimea annexed by Russia, sparking fears of bigger conflicts

As there's no margin of safety in the Yield (my target minimum is 4%), I have therefore decided to take profits at lower prices, resulting in very tiny % profits. In contrast, last year, I was able to drag all the way till almost xd date to maximise my % returns.

I still have one last batch and the only possible reason for me to re-enter would be to bring down the average price. In the worst case, I'll either just hold on or sell at a loss. In the meantime, I intend to move on to the next stage of the Yield Rotation Strategy and monitor the end-Mar FY Yield Stocks (SIAEC, SATS, Singtel) or REITs (Quarterly Reporting starts on 8-Apr, with SPH REIT and will last till end-Apr, with the last few in B-May) for buying in. 😀

 

Dividend History

• SIAEC : Mar13 = 15ct ; Mar12 = 15ct ; Mar11 = 24ct
• SATS : Mar13 = 10ct ; Mar12 = 21ct ; Mar11 = 12ct
• Singtel : Mar13 = 10ct ; Mar12 = 9ct ; Mar11 = 19ct

Both SATS & SIAEC had weaker EPS for 9M and there's always a possibility of a lower 2H Div unless Payout Rate is increased. Both have negligible debts and a strong cash balance. Chances of a Special Dividend is lower for SATS as they'll likely need cash for their acquisitions (Singapore Cruise Centre @ $110Mil – Pending + PT Cardig @ $118.3Mil – Completed on 20-Feb-14). As for SIAEC, I'd rate the chances to be more than even as their Q3 Cash = $462Mil, a bit higher than Q3 – Dec10 ($459Mil) when they last paid a higher Special Div for a 2H total of 24ct. Note that SATS has an active Shares Buy Back program and share prices can be better supported..

Yield & PE

• SATS @ $3.06 : Yield = 4.902% ; PE = 18.43
• Singtel @ $3.63 ; Yield = 4.628% ; PE = 16.49
• SIAEC @ $4.86 : Yield = 4.527% ; PE = 19.83

Reference

SATS : PT Cardig Acquisition ; Singapore Cruise Centre Acquisition / Presentations

Sell @ $3.76

Contra off my most recent ones. Had bought quite a fair bit with every drop. Time to pare down and take some tiny profits so that I can buy back again on dips.. The date to watch out for is the xd ie. better play safe and clear all before that as yield is no longer attractive for longer term hold (unless we believe in their growth story).

To get 4% Yield (Using latest EPS),

• 80% Payout (FY13) => $3.75
• 75% Payout (FY14) => $3.51 or $3.68 (Assuming a 5% Growth in EPS)

The beginning of a possible target price idea for FY14… 😀

Buy @ $3.72

Bring my average down… easier to hit short term targets.. 😀

Buy @ $3.74

Add back and with this buy, I have replaced all those I'd sold recently. 😀