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Pilot Audi Wong's picks are Celestial and China Sky. Photo by Leong Chan Teik

THE VOLATILE and negative market sentiment has dragged down the performance of the five participants in our Stock Challenge, which started on April 7.

Audi Wong, 35, has seen his gain halved to 6.1% as of last Friday (July 11) but continues to lead the game for the second successive round.

Aileen Goh, 31, lost a bit of ground but is the only other person to eke out a gain, of 5.1%.

By no means are the participants’ stock picks suspect.

Take Straits Asia Resources, a pick of Aileen and Sebastian Chong.

On July 7, it
rose as much as 3.9% after Goldman Sachs upgraded the stock to "buy" from "neutral" with a target price of S$4.70.

Goldman Sachs analyst Yoke Fong Chee wrote that “Straits Asia Resources's high growth profile and inexpensive valuations also underpin our turn to a more bullish view on the stock."


On July 4,
OCBC Investment Research issued a "buy" rating on Straits Asia Resources, with fair value set at S$4.80.

Another stock, China Taisan, which was picked by Mephisto, another of our participants, is now trading at 19.5 cents or a historical PE of 5.

Its Q1 FY 08 net
profit shot up 188% to Rmb 64.5 million, which suggests a very low forward PE ratio for the full year. We have an article on China Taisan, here.



Stock

No. of shares

Price bought at

June 20 price

Value of shareholding ($)

Celestial

75,000

84 cts

81 cts

60,750

China Sky

56,000

$1.03

81 cts

45,360

 

 

 

 

106,110
(+6.1%)


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Audi Wong

Audi Wong, 35, is a commercial pilot who has invested very successfully in stocks and properties, especially in recent years. He graduated from the University of New South Wales with a bachelor’s degree in aviation.

Audi says:


No change in portfolio.  My recent visit to several companies that represent the entire textile value chain in China strenthens my belief in the upstream market for high quality nylon, hence China Sky stays in the portfolio. In my real-life portfolio, Li Heng was included after it fell to super attractive levels last week and after I visited its plant. Speaking to the chairman gave me additional confidence in the company. 

I reckon the downstream textile guys will suffer from stronger competition rather than the upstream guys.  Switching costs, amongst other things, are quite painful for the fabric manufacturers, hence there is a stronger moat for the upstream players. 

It is not worth it for the downstream guys to switch: There is little savings in costs and they run the risk of production stoppages if the new supplier's quality is not up to scratch.  The over-riding factor is quality, very important as it could get rejected by the end user.  As for costs, the nylon/polyester  only makes  up a very small % of the end product's cost.

Remember, I believe in investing in a business rather than being fixated on stock price movements. 

                                                                                 *****



Stock

Number of shares

Price bought at ($)

Jul 11 price ($)

Value of shareholding ($)

Straits Asia Resources

20,000

3.245

3.00

60,000

SembCorp Marine

10,000

4.14

4.24

42,400

Cash

 

 

 

2,700


Total

 

 

 

105,100 (+5.1%)


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Aileen Goh

Aileen Goh, 31, has been a trading representative at Phillip Securities for the past eight years since she graduated with an accounting and finance degree from Monash University. She has a mix of investing approaches: long-term fundamentals-based investing coupled with short-term trading, depending on the circumstances.




                                                                        *****

Stock

Number of shares

Price bought at ($)

Jul 11
price $

Dividend $

Value of shareholding ($)

Dutech

200,000

0.23


0.215


0.02

47,000

Sunshine

250,000

0.15


0.11

 -

27,500

China Taisan

100,000

0.235


0.195

-

19,500

Cash

 

 

 

 

3,600

Total

 

 

 

 

97,600
(-2.4%)


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Mephisto's avatar

Mephisto is a 30-something investor who says he is a simple man who enjoys his bak ku teh with Chinese tea every weekend morning. Having gone through the 1987-2007 booms and busts, he has a great deal of respect for Mr Market. Nevertheless, he enjoys pitting his wits against the market, which is by itself a learning experience, he says.



                                                                       *****


StockNo. of sharesPrice bought at ($)Price sold at ($)Latest market price($) Full cost of underlying security in CFD ($)Initial deposit (for CFD) ($)Total shareholding
value ($)
Jardine Cycle & Carriage (CFD)5,000(CFD)16.52 16.9815.90      82,600  8,260     --
Sino-Environment(CFD)125,000(CFD)
25,000 (CFD)
1.40
1.58
 1.48
 1.48
1.25
1.25
 175,000  39,50017,500
3,950

    --     

     --

Capita Retail China Trust8,0001.27 1.341.04        --
Straits Asia Resources4,000
2,000
3.03 (cd US 0.75 cent) 3.373.00        --
Swiber Holdings5,000
2,000
3,000
2.53
3.00
2.65
 2.22   22,200
Jardine Cycle & Carriage2,00016.98 15.90   31,800
Sino-Environment15,000
10,000
1.48
1.50
 1.25   31,250
Cash       11,871
Total      97,121 (-2.88%)






































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Sebastian Chong

Sebastian Chong has invested actively in equities since the 1970s. He is managing director of Financial Info Analysis Pte Ltd, a company he founded after he retired as an accounting professor at the National University of Singapore. He now runs his popular investing website, www.shareowl.com

Sebastian says:

The first week of the latest 3-week reporting period showed signs of weakness of both the Dow and the Asian markets including the STI.

I decided to close my CFD long positions on Sino-Environment and Jardine Cycle & Carriage. Fortunately both CFD positions were still slightly profitable but even if they were not, I would still have cut loss and close them. In playing CFDs, we have to be decisive or else the loss would become very ugly.
 

As it turned out, Sino-Environment had gone down to just $1.25 by 11 July, and there would have been a loss of $27,000 on the CFD on Sino-Environment CFD alone. Add to that, a loss of  $3,100 on the Jardine Cycle & Carriage CFD compared with the cost.  As I still liked these two stocks, I using the proceeds from the closure of two CFDs to buy shares in the two. 


I also sold Capital Retail China Trust at 1.35 (1.04 at 11 July) as China property markets are weakening and Straits Asia at 3.37 (3.00 at 11 July) owing to coal price correcting.

But at $3, Straits Asia looks reasonably priced again.
   

                                                                  



                                                                             *****


StockNo. of sharesPrice bought at $Jul 11 priceTotal shareholding value $Vested dividend
S$
Remarks
Pan-United31,5000.635$0.58518,4280.0265Conviction hold.
CH Offshore34,188
15,800
0.585
0.655
$0.6230,993-High oil prices are driving deepwater cycle.
Hongguo38,460
20,294
0.52
0.51
$0.39523,2080.013Strong brand equity suggests sustainable momentum.

Silverlake

50,0000.40$0.28514,2500.005See my article titled SILVERLAKE AXIS: Software solutions for Asian banks.
Total    86,8791,585 (Total) 

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DanielXX's avatar

DanielXX is a 30-something investor who is well-known in certain online investing forums as well as for his blog, where his writings on investing reflect depth of thought and analysis.

DanielXX says:

As of July 11, the total value of my portfolio = shareholding value + dividends = $88,464. It is down by 11.5%. 

No transactions since the last update three weeks ago.

Watch out for the re-making of Singapore over the medium-term. Although this theme might not manifest in share prices over the next few months, it could eventually be a useful investing theme further down the road.


                                                                                *****

Next update: Monday, Aug 18. 


Previous reports:

STOCK CHALLENGE: Pilot is flying high now

STOCK CHALLENGE: Sebastian still No.1 with 58% gain in 8 weeks

STOCK CHALLENGE: Top performer is up 63% in 5 weeks


STOCK CHALLENGE: Results range from 0% to -6.1% after 2 weeks 

STOCK CHALLENGE: 5 investors manage $100,000 'windfall' 

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