My Singapore Team of Dividend Stocks 2015

My first 11 team of dividend shares have remained largely unchanged over the past year.

Goalkeeper

(1) OCBC remains my stalwart to guard the goalpost. An increasing interest rate environment can only benefit the banks.

Defenders

My defence is built around Real Estate Investment Trusts (REIT) in the form of (2) Capita Commercial Trust, (3) Capita Retail China Trust and (4) Mapletree Industrial Trust.  That gives me 3 REITs covering commercial, retail and industrial properties, with some exposure to China. 

My fourth defender is (5) Vicom.  a proxy play for car ownership in Singapore. It could be facing some windy resistance as there are supposedly less cars that require routine inspections over the next 3 years. But will there ever be less cars in Singapore? Not in my view. So long as there is a high level of demand for car ownership, there will be business in car inspections and Vicom is dominant in this regard.

Midfielders

Midfielders need to control the play. They have to create opportunities for offensives, and at times have to roll back to the defensive. For this, I am standing by (6) Boustead, (7) Hour Glass, (8) Kingsmen Creative and (9) SATS.

Boustead is about to break off its property business. For Hour Glass, its founders continue to buy its stock. I view that as positive. Kingsmen Creative has been doing well, expanding regionally and in Greater China. There are many MICE events and theme parks being built in the region. SATS on the end could face some issues with the airline business somewhat affected by negativity with the number of unfortunate air crashes and economic challenges.

Strikers

For the offensive play, I am looking for some excitement, in particular, growth players that may not be as yet high yielding but have the potential to go far. No change to my strikers with (10) Global Logistic Properties (GLP) and (11) Yangzijiang, giving me exposure to China, Japan and Brazil.

The poor outlook of the shipping industry could well affect Yangzijiang. Likewise, the slowdown in China could well see impacts to both. I'm normally averse to holding China plays. But I'm making an exception for Yangzijiang. It however requires some close watching.

Reserves

Nothing has therefore changed after a year to the team composition. But it looks like there could be some challenges in the performance of my first 11 in the year ahead. To mitigate, I've expanded my team by beefing up the bench strength and recruited (12) GK Goh, and (13) Keppel.

GK Goh holds a portfolio of interesting investments (more) with significant insider buying in recent months. Keppel on the other hand is my contrarian play. There is much fear in the market given its lack of new contracts and poor segment outlook in oil and gas. But with a Price-Earning ratio so low, it's too good to ignore given my long term outlook towards my investments.

Play ball! Oh wait, wrong game.

[Disclaimer: I hold all the above stocks. But this is not a recommendation to buy any of these. Do make your own assessment before investing, always. I acquired them at different times over the past five years (post Global Financial Crisis) and have benefited from their growth and reinvestment of dividend payouts since.]

My World Cup Team (of Dividend Value Stocks)

Warren Buffet in several of his talks cited a hypothetical situation for the audience to consider. If you only have a ticket on which you can only punch 10 holes, and each of these holes represent one stock you could invest in, and you can never change your mind thereafter for the rest of your life, what would you choose?

[You can find some of these videos of the talks on YouTube.]

Well, it's the World Cup season right now, so in the spirit of this global event taking place in Brazil, I shall extend that to a fantasy soccer team of 11 first team players. What would my first 11 be for a team of largely dividend-yielding samba stocks?  

I am going with a conservative and defensive oriented 4-4-2 formation.

Goalkeeper

There can only be one goalkeeper. This guy has to ensure that the opponents would not score and is the last man. For this, I would go with (1) OCBC. A big strong and friendly bank to hold the last line.

Defenders

For my defenders, I'm going with the two things that are the cause of  lots of heartburn - property and cars. The main reasons for our high headline inflation. Defensive stocks with high yields.

For property, I'm going with a couple of REITS, namely, (2) Capita Commercial Trust, (3) Capita Retail China Trust and (4) Mapletree Industrial Trust.  So that gives me 3 REITs covering commercial, retail and industrial properties. 

To round off the fourth player, I would go with (5) Vicom, a proxy play for car ownership.

Midfielders

Midfielders need to control the play. They have to create opportunities for offensives, and at times have to roll back to the defensive. For this, I would go with (6) Boustead, (7) Hour Glass, (8) Kingsmen Creative and (9) SATS.

Strikers

For the offensive play, I am looking for potential value-growth players that may not be as yet high yielding but have the potential to go far. For this, I pick (10) Global Logistic Properties and (11) Yangzijiang. Exposure to China, Japan and interestingly Brazil. 

It's pretty much a 80-20 rule. So that rounds up my first 11. What's yours?

[Disclaimer: I hold all the above stocks. But this is not a recommendation to buy any of these. Do make your own assessment before investing, always.]

Recollections of 'my' companies

It's the eve of X'mas 2011, and it's a good a time as any to take stock of events in the year that relates to companies I've taken a stake in.  It's been a horrible and unforgiving year - tsunami in Japan, massive floods in Thailand and Australia, financial crisis Part II in Europe, SMRT coming out like a disaster movie, repeated floods at various parts of Singapore, and the bird flu apparently making a come back in Hong Kong.

Adampak had one of its factory underwater in Thailand when the floods hit. 

Qian Hu is still fishing around and doing poorly this year after the European market tanked.  Fishy.

SPH failed to deliver my papers on a few occasions.  Not getting their basic service done is a bad sign.  And the long time Chairman of SPH has become the President of the Republic.

In contrast, SingPost has consistently delivered my posts.  But the amount of junk mails these days is simply amazing!  But if it keeps the postman busy, it's good?

Singtel phone bills continue to increase throughout the year as the number of handphones I owned have gone up.  How many handphones does one need?  I am still not subscribing to any M1 services.  What will LTE technology bring to their businesses?  More data traffic is the way to go, ever since the rise of the iPhone and iPad.  Long live Steve Jobs!

Still haven't bought anything from Aussino.  I think I'm still happy with my bedsheets.  The trouble is that these things can last quite a while.  I'm not hopeful about their business.

HourGlass appears to be doing decent business.  Lots of tourists visiting Singapore these days and hopefully there're there in the branded class that the newly rich patronise.

SMB United is in the midst of a takeover bid.  Remains to be seen what the outcome will be.

Global Logistics Properties has dived in on the Japanese property market in the months following the Japanese tsunami and nuclear disasters.  Looks like some smart moves.  It's going to be sometime before we see these pan out.  China and Japan are all about exports and emergent consumption.  And that means there is a logistics battle to be won.

On the property front, the cooling measures seem to be gradually taking effect.  Amazingly, the E-Condo I'm living in now appears to be going at twice the price I bought, and that was just 5 years ago.  In land scarce Singapore, this is one area where there is no room for abundance, unless technology breakthroughs bring new opportunities.  I'd stay away speculating the home properties given that these will likely continue to attract frequent policy interventions.  This is one unstable "C" among the infamous 5Cs.  But Capita-Commercial Trust and Mapletree Industrial Trust are alternatives in the commercial and industrial sectors (REITS) for a 'stable' income stream.  That's not a bad thing.

Singapore banks have stood the test of the last two rounds of financial crisis in the US and Europe.  OCBC remains healthy and I'm sure their OCC 3.93% NCPS will continue to pay out annually.  How does the future hold for SP Reinsurance and Sing Inv & Finance?  I'm living off their dividends.

Water is the business for Hyflux.  However, I certainly wouldn't hold my breadth on Hyflux itself. It had banked on the rich African market which was unfortunately aborted by the Arab Spring.  Perhaps the opportunity will present itself again.  It has tried to diversify into China and we shall see how that transpires.  But their overall business in water and waste should remain viable and hence Hyflux 6% CPS should remain ok for the steady income stream it produces.  We need to drink, and we certainly have to shit.  One can die from not being able to do either you know.

CSE Global seems to be having trouble making profits out of their software projects.  It didn't help to find their customers caught amidst the rising tide of the Arab Spring as well.

Ah China!  Who knows where things will go from here.  One can certainly see the throngs of newly rich everywhere.  And I mean everywhere.  So perhaps it's healthy to benefit from their retail growth story via Capita Retail China Trust.

Tat Hong's factory near my neighbourhood seems to have either moved, or else all their cranes have been rented.  Bad sign, good sign, depending which way it went. But they're likely benefiting from their business down in Australia.  It's a reconstruction and recovery story after the floods in Australia had receded.

When economic woes abound, and the price of oil climbs to ridiculous levels, airlines businesses are all downhill, including filings for Chapter 11 (US)!  But I believe SIA will recover and will do well again when things pick up.  But one wonders how the new management team is fairing? 

By a similar thread, SATS' future rests on the recovery of the air transportation business.  They have just secured a contract to operate the new Cruise passenger terminal.  That could perhaps help broaden their business to the sea business.  In any case, they continue to have the stable business of providing food for the SAF.  National Service is good for SATS.

Speaking of food, Brands products from CerebosPac is a must have booster for kids preparing for exams.  What a year of exams!  That's a lot of Brands Essence of Chicken.  It also appears to be one of those staple items for hospitalisation gifts as well.  Students and hospitals, it's all about people!

Kian Ann, Innotek, Teck Wah and Meiban Gp?  Waiting for the manufacturing and engineering to recover perhaps.

With Certificate of Entitlements rising to epic proportion, car ownership has become another that has gone beyond-the-line-of-sight "C" for followers of the 5Cs.  But they all need to go for annual inspections, and the number of cars aren't getting any less despite this.  VICOM for next buy?

Merry X'mas!