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
