From the start of this year till end of January, the main movement was me selling Bank of Ireland in favor of Karin Tech. The sale of Bank of Ireland was triggered by the disappointing lack of positive push to the stock. Though the economy for Ireland and Europe had been improving for a while now, with stable dividend on the way, it had not translated into positive movement for the stock. The premise of me buying Bank of Ireland back in 2014 was based on the improving economy in Ireland as well as the improving of the bank's balance sheet. Both events happened without any significant price increase. Hence by referring to my buying motivation, I had realised holding the stock by this point, meaningless. This also serves as a good lesson for readers out there that when buying stocks, remember to write down your reasons for writing it. Periodically review it to see that the reasons are still valid and if the reasons are not valid anymore, consider selling it.
Following the previous post about Karin Tech, I have decided to add the stock into my portfolio for the strength of management, resilient earning power, advantageous foreign exchange and good dividend. However, from the announcement from the company on Wednesday, I might have misjudged the strength of the business itself. Profits from Karin Tech plunged approximately 80% due to softening consumer electronics product. I had reservations about that section of business due to the low economic moat, but I did not expect it to drop so much. Nevertheless, a dividend of 0.05 HKD translate to a half year dividend yield of 3%. This is sufficient for me to consider holding it for longer periods of time. A warning to any investors though, the stock had fallen below the 3-year low of $0.285. Hence, a short term investor may have problem holding it.
HPH Trust has also announced their results recently with a drop of dividend. A constant worry of mine is the huge debt of HPH Trust. Though HPH Trust has good dividends in the past years, the stock price drops along with the dividend and I wonder if the dividends/business is sustainable in the long year. I will be reviewing this stock with more spare time.
SingPost announced marginal growth in profit despite higher revenue. It is really frustrating that profit does not grow proportionally with revenue. Logistics can be a lower margin business. However, having waited over 2 years for profit catch up, it does not appear to be happening. Management guided that "transformation" is finalizing and it is time to reap its fruits of labor. With the departure of Wolfgang Baier, I really wonder how the company is going to fare in the future. If not for my wonderful entry price, I may have sold this stock already. Perhaps I sound salty, but the downgrade from OCBC is infuriating. Within a quarter, the bank has conveniently slashed $0.82 off the target price of SingPost. While details has been lacking for the justification of the new TP, I find it unbelievable that the cut is so much within a quarter. Makes me wonder do the research house just see.... "heyyyy, the current trades so far from our TP. I think it's time to cut it nearer to current price to stay relevant." Also, I don't see eye to eye with people stating that dividend has increased from 1.25 cents to 1.5 cents. This is because it had been declared by SingPost since 1 year ago and should have been factored into stock price long ago. Don't mislead potential investors.
-End of whinings-
With the removal of Bank of Ireland, my portfolio has transformed into a full dividend machine and I hope I can meet my dividend target this year. The Year of Monkey should be good to people born in the Year of Goat and I hope it is true! So Happy Chinese New Year all! Have a prosperous year ahead!!
