17 August 2011

Investment Ideas Come From The Things Around You

Sometime, we do not have many ideas on the investment and we always rely on the people around us, such as colleagues, family, friends, relatives or any person that close to you. However, we should believe in ourselves that we could be a good investor without relying on them.

As you could figure out, there are actually a lot of investment opportunities outside or just between us. We should try to find out a new business potential that just happen around us and invest in it for long term profit capturing. Let me give you one example:

Few years ago, when Digi was just about 4-6RM, the stock price didn't move up a lot. After the company changed its dividend policy to make a huge dividend payment to its shareholders, it immediately attracted a lot of institutional investors to invest in it and caused a rocket rise of the shares price. After that, the price keep on moving due to a good marketing strategy as well as competitive pricing strategy adopted by Digi. If you could purchased Digi at lower P/E ratio, now you would be able to enjoy a very high dividend yield.

I also invested in Mah Sing since year 2005. The company's management set a vision to be the largest property developer in Malaysia in term of Market value. Since then, Mah Sing kept on acquiring land bank and now its land bank GDV is about 14B - 15B that ensuring a 5 to 7 years earning income stream.

Now, I am investing in Chip Eng Seng, hoping to have some catalyst on it:
  • Transfer from Construction Sector to Property Development Sector (could be done within few years time as the percentage of Property Development is increasing gradually)
  • To achieve another record year for Year 2011 as currently it recorded 70M net profit (but it is subjected to a reporting standard changes). We must be very careful when Management changed its reporting standard
  • Changes on Government Policy to attract more people to invest in EC and BTO flats, which are main income stream for Chip Eng Seng.
I am now trying to learn more about Singapore Economy and public listed companies and hope to share with you after my review on annual reports. Please stay tuned or 'Like' me on the left floating bar.

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