Fundamental Analysis Archives - Page 5 of 8

Airlines Stock Crisis: Delta Airlines vs Singapore Airlines

Posted on March 7, 2020 Written by Dr Tee (Ein55)

Both Delta Airlines (NYSE: DAL) and Singapore Airlines (SGX: C6L) are well known international airlines. However, choice of stock for investing is different from choosing airline as a passenger. We need to consider from investing perspective, both business performance and share prices.

Delta Airlines is a giant airline stock with strong business fundamental. No wonder Warren Buffett starts to collect more of this stock despite the price falls like a knife which he is not afraid to catch it as he believes the bleeding period is within his tolerance level to exchange for 1/3 discount (26% optimism, near to low optimism <25% but in downtrend direction, Ein55 members may monitor when it may recover again while optimism is still low).

Our dear Singapore Airlines is not a giant stock, fundamental is below average, optimism (28%) is approaching low (towards 25%) but long term potential is relatively weaker, more suitable for short term trading (when timing is right), not for investing.

Some smart investors select stocks as if choosing life partner, holding for long term to maximize the value of partnership, therefore won’t miss when the rare opportunity has come. However, no one would know the “perfect” moment (eg. the lowest price). For Warren Buffett, he just needs to buy with discount within his acceptable limit, buy low enough, no need to speculate the lowest price and he could hold till recovery in both business and share prices.

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Filed Under: Fundamental Analysis, Market Outlook, Stock Market Tagged: airline stocks, airlines, coronavirus, crisis stock, delta airlines, sia, singapore airlines, temasek, US Stocks

3 Main Undervalue Stock Investing Strategies (Benjamin Graham & Warren Buffett)

Posted on March 5, 2020 Written by Dr Tee (Ein55)

Value is what you get and price is what you pay. Indeed, undervalue stock investing strategy is as simple as shoppers buy familiar brands of products during sales (eg Great Singapore Sales in Jun-Aug, 11 Nov internet retailer sales, etc).

However, an investor may feel frightened when “discount” in stocks are incresing, eg. buying a stock with 50% price correction but it continues to fall, sometimes may not recover at all (bankrupt of company during crisis) or long period of low prices.

At the same time, a shopper seldom feel frightened when merchant B gives more discount than merchant A as a discount is already enjoyed, shopper knows that it is impossible to buy at the most discount.

This implies that there is a gap between stock investor and shopper, particularly related to mindset of value vs price. Let’s learn 3 main strategies in undervalue stock investing:

1) PB (Asset Method)

Price to Book (PB) ratio is share prices / Net asset value, a common way for smart investor to buy undervalue stocks with PB<1 or share price below net asset value for discount. This method requires high quality asset such as property or cash, not goodwill or licenses, etc.

The constraint of this method is an investor has limited selection of stocks (eg property or bank related stocks) and require patience to hold through the recovery phase.

Giant stock such as Hongkong Land (SGX: H78) is very undervalue with PB about 0.3 or 70% discount (price below valuation of net asset value). However, when investing during downtrend in share prices, there is more “discount” given, not limited to Hongkong Land, also commonly observed in many undervalue property stocks in Singapore and regional stock markets (eg Hong Kong, Malaysia, etc).

This method is more suitable for longer term investor (over 5-10 years) who ignore daily share prices. Benjamin Graham, father of value investing invented this method but it may not be suitable for everyone, especially short term Traders.

2) PE (Earning Method)

Price Earning (PE) ratio, share price over earning, is another common way for valuation, buying stocks with low PE.

The constraint of this method is limited to company with consistent growth. So, whenever there is a correction in share price during “crisis”, it would create a low PE opportunity.

However, this method may not be suitable for everyone as it requires good understanding of growth stocks with strong economic moat. Past historical low PE may not be a suitable reference (unlike PB<1 is a clearer criteria). Besides, each sector has its own average PE, eg higher for technology and healthcare sectors, lower for property sector. Therefore, it requires relative comparison of PE within similar sector among the peers.

Growth investing and value investing is just a fine line in between. Warren Buffett used to follow undervalue investing of his teacher, Benjamin Graham (asset method) in early years but found the choices of stocks are limited when share prices are much higher. His partner, Charlie Munger, encourages him to move towards growth investing, consider to buy an excellent business at fair price. This is aligned with teaching by second teacher of Warren Buffett, Philip Fisher, who view value as future growth, not limited to current asset.

Stock such as Apple Inc (Nasdaq: AAPL) has PE of about 22, considered “undervalue” within technology or internet sector. The stock may not be cheap in asset valuation, but it is undervalue based on future growth prospect.

3) Optimism (Ein55 Method)

Optimism is 1 of 55 Ein55 investing styles developed by Dr Tee. Optimism method is a unique way to integrate PE and PB methods, allow applications in all types of stocks, not limited to asset based or growth based. Optimism is ranging from 0-100%, a stock is undervalue when < 50% optimism, very undervalue when < 25% optimism, over price when > 75% optimism, fair value when near to 50% optimism.

For example, Hongkong Land is at 2% Optimism (very undervalue) while Apple is at 34% optimism (fair price). Optimism provide a quick and reliable way to integrate value and price together for investors to make decision. 50% optimism is an easy way of valuation for any stock.

However, Buy Low may get lower before one could Sell High. Therefore, it is crucial to integrate at least 5 Ein55 styles together with LOFTP Analysis:

L = Level Analysis (L1-L4)

O = Optimism Analysis (0-100%)

F = Fundamental Analysis (strong / weak)

T = Technical Analysis (Uptrend / Sideways / Downtrend)

P = Personal Analysis ( personality – short term trading or long term investing)

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Warren Buffett is a famous counter-trend investor (although sometimes he also follow “business trend” to buy stock such as Apple), the more share price drops, the more he would buy stocks with cash. His pocket is deep (Berkshire is an insurance giant stock, the premium collected from insurance provide enormous cash reserve for Berkshire through Warren Buffett to invest for higher return during crisis). If one has limited capital with low risk appetite, trend-following could be a better choice, wait for confirmation before trading or investing.

Haw Par (SGX: H02) is a giant stock (which also invest in other giant stocks of Mr Wee), hidden jewel of Mr Wee Cho Yaw, UOB Chairman. We have covered this stock in details several years ago in Ein55 charity course (Discounted NAV stock) and also in Ein55 mentor course on Fundamental Analysis (either course #1 or #2), share price was less than $9 (undervalue) then, with over 50% capital gains in a few years later.

I have studied the cross-holding structure of Mr Wee network of stocks and Jardine Group in Ein55 coaching several years ago and also briefly in this article:

Jardine Group and UOB Group with Cross-Holding Stock Network

Cross-holding structure can strengthen the control but if not a simple majority control (over 50%), it could break down one by one as well when 1 of the stock is controlled by competitor. So, we could see Mr Wee Cho Yaw has been increasing ownership in his network of shares over the past few years to strengthen the control, not just leveraging on cross-holding structure.

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Filed Under: Fundamental Analysis, Stock Market, Value Investing Tagged: benjamin graham, investing strategies, undervalue stock, warren buffett

Read in Between the Lines for Financial Reports – Tesla

Posted on March 5, 2020 Written by Dr Tee (Ein55)

Tesla (NASDAQ: TSLA) is a young giant stock with electric car technology yet to be proven profitable in future. The company has been “losing” money or making net loss over the past 10 years, mainly due to tremendous R&D expenditure and investment to expand its business.

For emerging technology stocks (eg past young giants such as Alibaba, Facebook, etc), usually first few years or even longer period, company may suffer losses. Tesla has been “losing” money in terms of profit but sales or revenue has been increasing.

Young giant stocks may need to “burn money” in exchange for bigger market share, so that next time it can become an economic moat to start making big money. So, smart investors need to read in between the lines for financial reports, not just profit or loss.

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Filed Under: Fundamental Analysis, Stock Market Tagged: financial report, fundamental analysis, tesla, Transportation, US Stocks

Warren Buffett Apple is the “Best Business in the World”?

Posted on February 25, 2020 Written by Dr Tee (Ein55)

Warren Buffett invests in Apple Inc (NASDAQ: AAPL) and thinks that it is “probably the best business in the world”.

Of course, this statement should be issued AFTER Warren Buffett has invested heavily in Apple Inc. Followers of Buffett would then follow to buy the same stock but at much higher price. Apple is still the same Apple with strong fundamental but FA (Fundamental Analysis) is not the only consideration. There are other key variables in investment, eg:

1) Prices of Apple is a few times higher. This will affect price to valuation. Warren Buffett bought Apple at much lower price, therefore the risk of longer term investing is lower and return is much higher.

2) S&P 500 is at high optimism. US stock market could affect Apple but Apple may not able to affect US stock market. This is Level Analysis, aligning individual stock with the stock market.

3) US economy is at the best of past decade, how to be better? When spending is high, how to be higher for Apple to grow? This is a relative consideration of business for individual stock (Level 1) vs economy of a country (Level 3).

4) Other black swans such as Coronavirus threat (affect retail shopping), China economy slowdown (Apple having lots of business in China), US presidential election (results could affect US-China trades in future), etc.

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In short, investing in Apple has to align with own personality, not simply following Warren Buffett blindly as his personality (depth of business analysis, self-confidence, holding power, diversification, capital, etc) could be different.

Even at current high price (nearly US$300, doubled from US$150 in about 1 year), the optimism level is around 41%, considered a fair price based on Ein55 valuation. However, Apple is more suitable for short term momentum trading as world stock market (Level 4) and US stock market (Level 3) are at higher optimism, it is safer to do short term investing, applying trend-following with closer monitoring. Of course, if Apple is fine each month, then short term investor may gradually become medium term or even long term investor. This is different from starting to aim for long term investing at high optimism stock market unless one could accept moderate return by holding a long term and able to withstand the possible correction due to global financial crisis.

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Back to the title, is “Apple the Best Business in the World”? Fundamental of Apple is indeed very good, it may be Warren Buffett’s best business (since he invested in this business) but may not be the best business in the world. There are other better stocks in the world with stronger business than Apple but investor has to learn how to identify these giant stocks and wait patiently to invest in them at discounted prices.

A giant stock could be just a small cap company (too small for Warren Buffett’s capital which could only consider large cap) but suitable for retail investor with condition to diversify with 10 giant stocks.

Learn from Dr Tee free 4hr stock investment course to consider global giant stocks from various sectors with strong business comparable with Apple, then forming a dream team stock portfolio. Register Here: www.ein55.com

Filed Under: Fundamental Analysis, Market Optimism, Stock Market Tagged: apple, stock, warren buffett

Grandparents Bank Stock – HSBC (HKEX: 0005)

Posted on February 19, 2020 Written by Dr Tee (Ein55)

Despite HSBC (HKEX: 0005) is not a giant bank stock, it is definitely not a junk stock. It used to be a giant stock several decades ago but declining over the last decade in both business and stock prices. So, for life-time investing strategy, it is important to review the grandparents blue chips (another example is SPH, SGX: T29), at least once a year, if business moves in wrong direction (downtrend instead of uptrend) year after year, a painful early farewell may be required, not to wait until falling in share prices over 50%, be a lifetime investor unwillingly, resulting in more capital losses through long term investing of a declining business.

HSBC is still the largest bank in Europe and Hong Kong but we may not need to buy the largest bank. Instead, we focus in most value for money giant bank stock for investing (many in Asia countries, eg Hong Kong / China, Malaysia, etc), selecting the strongest momentum bank stock for trading (probably in US).

HSBC is not a giant bank stock (big size but not strong fundamentally). Global financial crisis has not come, weaker business already catch the cold (start to layoff staff recently), not sure if could survive in the next cold winter with intense global competition.

Investors may also compare with 3 major banks of Singapore: DBS Bank (SGX: D05), OCBC Bank (SGX: O39) and UOB Bank (SGX: U11) which require different investing strategies.

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Filed Under: Fundamental Analysis, Stock Market, Stocks A-Z Tagged: bank stock, hsbc

Dorscon Alerts with 4 Levels of Investment Opportunities

Posted on February 14, 2020 Written by Dr Tee (Ein55)

Dorscon disease outbreak alert system (4 colors: Green, Yellow, Orange, Red) was established in Singapore after SARS 2003. Some people may worry the current situation may be changed from Orange to Red Alert for Coronavirus (if so, schools have to be shutdown temporary).

There is grey area (no clear quantitative criteria) in Dorscon for 2 main criteria (# infected vs # death) to be Red Alert:

1) spread widely

– how many # infected daily is considered widely

2) Significant # death

– how to define significant?

Even for SARS in Singapore, it was later benchmark as Orange Alert, having 33 death out of 238 infected cases in Singapore. Since Dorscon absolute criteria may not be known. We may do a relative criteria based on benchmark with known case of SARS in 2003 at Orange Alert.

For Coronavirus, although actual fatality rate could be much lower than 2% (due to many cases in Hubei may not be diagnosed in earlier stage), we may assume 2% as the worst case scenario.

We could do a reversed calculation to estimate when Coronavirus may be as severe as SARS based on Dorscon criteria of Orange Alert before transition to Red Alert. There are 3 possible conditions as criteria:

1) Same # infected as SARS of 238 cases. Currently Coronavirus has 58 # infected in Singapore till 13 Feb 2020. Coronavirus is about 25% level of SARS for Singapore. Since worldwide data shows Coronavirus has more potential than SARS, then this # infected may have potential to grow in Singapore.

2) Same # death as SARS of 33 cases. Currently Coronavirus has 0 death, still a long distance before in par with SARS (which is rated as Orange alert).

3) Since # death in Singapore for Coronavirus is 0, we may also apply same # death as SARS of 33, assuming 2% fatality rate (worst case) for Coronavirus, we could derive a critical # infected = 33/0.02 = 1650 # infected in Singapore before Coronavirus is comparable with SARS. Criteria 2 and 3 are related, see whichever reached first.

Conclusions:

SARS Orange alert criteria is in fact quite high. If we use the same criteria as SARS, then Coronavirus has to have either 238 or 1650 infected cases and/or 33 death in Singapore before declaring the same level of health crisis as SARS (which is still Orange Alert). Based on 3 possible conditions, the easiest criteria (assuming either wide spreading or significant number of death, not both) to meet is probably No 1 based on same # infected of 238. For Conditions No 2 & 3, will be more difficult to achieve, if applying this criteria, likely Coronavirus would remain just Orange Alert.

Assuming SARS is the upper limit of Orange Alert, then Coronavirus currently is probably the lower limit or Orange Alert. The Red Alert has to be reserved for true health crisis, otherwise there is no proper level to reflect the right action for such emergency then.

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Dorscon standard is just a reference, main objective is to show the relative risk in health, individual could then use it to make decision on how much risk to take.

Similarly, we may apply 4-color Dorscon concept in stock investment, dividing into 4 levels of investing opportunities, each level has its own risk vs opportunity based on business fundamental vs optimism level:

4 Levels of Ein55 Investment Opportunities

1) Green

– Strong business fundamental

– Low Optimism level (<25%)

2) Yellow

– Strong business fundamental

– Moderate Optimism level (25-75%)

3) Orange

– Moderate business fundamental

– Moderate Optimism level (25-75%)

4) Red

– Moderate business fundamental

– High Optimism level (>75%)

For either long term investing or short term trading, a stock requires minimum of moderate business fundamental. Buying weak fundamental stocks with bullish price trend is speculative, more suitable for very short term trader (eg. during the Coronavirus crisis time, some weak stocks start to rise).

When Optimism level is higher (from Green to Red Opportunity), positioning style is safer from investing to trading. Current global stock market is around Red Opportunity but traders may still consider short term trading in US with high optimism. For Singapore (moderate optimism level), it will be either Yellow or Orange Opportunities, depending on type of stocks.

Learn from Dr Tee free 4hr investment course on balance between risk and opportunities with comprehensive LOFTP Strategies (Level / Optimism / Fundamental / Technical / Personal Analysis). Register Here: www.ein55.com

Filed Under: Fundamental Analysis, Stock Market Tagged: coronavirus, dorscon, investment, stock market

Financial Report Illusion vs Coronavirus

Posted on February 13, 2020 Written by Dr Tee (Ein55)

There is about 7X surge (from about 2000 to 14840) in daily new cases of Coronavirus reported today in Hubei of China? No, this is statistical illusion due to different methods.

Old method requires full diagnosis (longer time, more steps) for confirmation. So, it is possible to have many undiagnosed cases which were not reported as confirmed # infected.

New method could confirm # infected after CT scan (faster), therefore number # infected “increased” suddenly overnight.

So, for 14840 “new” cases in Hubei for 12 Feb 2020, we need to divided into 2 methods for consistent comparison:

Old method = 1508
New method = 14840
Difference = 14840 – 1508 = 13332

So, for consistency in reporting, past data should have 2 system, either all old method or all new method (quite unlikely for past data with new method unless they have collected these data but not reported before).

So, it means for future data analysis, we need to add “adjustment” of difference in 2 methods for consistent trend analysis. Eg, 13332 has to be deducted from final 60327 world # infected for 12 Feb 2020, therefore only 46995 case if follow the consistent old method for all data collected so far, therefore only 1825 cases for 12 Feb 2020 (down from with 2071 cases on 11 Feb 2020).

It is important for authority to provide 2 different sets of number or do a one-time adjustment for all data. If not, readers have to analyze data using 2 different timeframes:
Old Method = 22 Jan 2020 to 11 Feb 2020
New Method = 12 Feb 2020 onward

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Inconsistent policy or reporting criteria is nightmare for analyst, both for Coronavirus and Financial Market (eg. Stock). In fact, both absolute number (eg. # infected on certain day, earning of company for certain quarter) and relative number (eg. weekly difference of # infected, quarterly or Y-O-Y earning difference of company) are important as they serve different purpose.

Absolute number is to benchmark against certain fixed criteria, eg max # infected for SARS vs Coronavirus, Price to Book ratio of an undervalue company (PB<1) .

Relative number is to show the trend, eg % share prices difference over last 1 week or 1 month during Coronavirus.

Adjustment is everywhere, not a nightmare if we are prepared. Eg, when company has changes in number of shares (stock split or consolidation), the price per share or earning per share can be adjusted accordingly.

The impact of new method in Coronavirus is probably similar to IFRS16 adopted in year 2019 by most countries (except for US, Europe and some countries), resulting in confusion as past financial data (before 2018) could not be adjusted easily, requiring reading financial reports to understand true impact of change.

Similarly, for the sudden surge (1 time) in Coronavirus case today should be viewed as policy change, analyst needs to adjust manually or best with help by authority to provide consistent data (more important than true data). For example, Singapore provide consistent data in # cases for Coronavirus and try its best to cover most cases (may not be all as some have no symptom, infected but not known), therefore reporting higher # infected than other regional countries outside China.

However, current global Coronavirus data of each country can still be trusted because the relative trend is consistent, despite each country may have somewhat different criteria and also effort in diagnosis.

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In fact, I have pointed out in earlier post that fatality rate of Hubei is 16 times higher than outside Hubei which is not reasonable. So, this confirms that there a significant reporting difference, resulting in # infected cases reported are less, therefore fatality in Hubei is much higher.
https://www.ein55.com/2020/02/hidden-statistical-analysis-of-coronavirus-with-stock-investment/

Bad News = Ignorant people becomes fearful as “actual” # infected is 7X higher (although could be 14X higher if we use same fatality rate to find hidden data)

Good News = higher # infected confirms the actual fatality rate of Coronavirus should be much lower, the “average” of 2% was based on old method, so if we use simple 2% / 7, actual average fatality could be around 0.3% which is reasonable.

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Filed Under: Fundamental Analysis, Personal Analysis, Technical Analysis Tagged: financial report, illusion

Impact of Policy Change on Coronavirus Report and Financial Report

Posted on February 12, 2020 Written by Dr Tee (Ein55)

Similar to new rules in financial reporting (eg. IFRS16 on operating lease starting Year 2019), it could have significant change to financial reports but it is one-time adjustment, especially in year 2019. Relative trend after the change should be comparable when an investor compares with 2019 as a new base. IFRS16 makes the analysis more complicated, eg. when Breadtalk (SGX: CTN) shows debt and cashflow are increasing, higher debt could be due to combined factors of actual debt increase and also due to operating lease (change in accounting definition)

So, assuming China government excludes those “no symptom” (despite tested positive) from # infected from Coronavirus definition, we should see a sudden dip on date of policy change, rather than seeing consistent downtrend for 1 week. Of course, if the authority is smart enough to distribute the changes over a period of time, then it is different story.

The worry is not on false downtrend (# infected for last 1 week) due to policy change (possible for 1 day drop, unlikely for entire 1 week drop). The main concern is incubation period of 14 days for those infected before lunar new year (5 millions people travel in/out Wuhan with a population of about 11 millions, Wuhan is heart of China, main junctions for travellers of 9 other China provinces – eg. high speed railways). About 1 out of 3 Wuhan people traveled before Chinese New Year, 23 Jan 2020 (when Wuhan city was locked down) + 2 weeks incubation = 6 Feb 2020 (just nice coincide with slowdown in growth rate of # infected), therefore we see significant downtrend in cases now as infection is mainly within Hubei.

For 5 Millions Wuhan people who traveled out, some have infected other cities in China and also other countries including Singapore, therefore the trends in these countries are still growing as incubation of 14 days is counted from after Chinese New Year. Singapore has banned travelers from China from 1 Feb, therefore we could foresee a downtrend near to or after 14 Feb due to end of incubation period.

However, when people to go back to work after lunar new year break, eg in China (from Feb 10) and in Singapore (from Feb 3), we worry there will be second peak. At the end, these 2 factors will be combined (higher drop due to past isolation measures vs possible increase due to workforce coming back), showing a net result, if -2+1, likely will still show a mild downtrend.

Again, we need to monitor the number of Coronavirus daily, up and down is similar to stock market prices, a combined effect of many factors, not just 1.

There are many principles in financial report and stock market which is applicable in all aspects of life, including Coronavirus analysis. Start to master these investing skills: www.ein55.com

Filed Under: Fundamental Analysis, Stock Market Tagged: financial report, policy change

$176,000 Donations over 9 Charity Courses in 5 Years for Tzu Chi (慈济) with Summary of High Dividend Stocks

Posted on November 3, 2019 Written by Dr Tee (Ein55)

Dr Tee, Ein55 Mentors & Graduates have together organised 9 charity investment courses (REITs in Nov 2015, May 2017 and May 2019, High Dividend Stocks in Mar 2016, Oct 2017 and Nov 2019, Capital Growth Stocks in Apr 2018 and Discounted NAV Stocks in Sep 2016 and Nov 2018) in the past 5 years, donating net income of around $176,000 to Tzu Chi 慈济 (Singapore).

We hope to inspire more Ein55 Graduates to reach out the society, helping others who are in need. More importantly, they have also learned the secrets of making money through investment. When more Ein55 Graduates are successful financially, they could also contribute back to the society to help more people in future.

Here are key learning points from the recent Charity Course on High Dividend Stocks:
1) Invest for dividend income is one of the important criteria that stock investor must not ignore because historical data shown that
1.1) S&P 500 (1932 to 2014) – dividend contribute 45% of portfolio return
1.2) STI 30 (2003 to 2013) – dividend contribute 49% of portfolio return

2) Financial Analysts Journal indicates that a portfolio of 10 stocks will diversify >75% of total investment risk but out of it 19.2% is systematic risk which is un-diversifiable such as change in global economy situation, interest rate change, natural disaster etc, with 30 stocks will diversify >95% of unsystematic risk (operational related risks), further add on number of stocks would not reduce significant risk in the portfolio but increase difficulty to monitor. For individual investor, suggested number of stock in a portfolio is 10 to 30 stocks.

3) 3 main criteria for a High Dividend Yield (DY) Stock:
3.1) DY > 6% for Singapore stock or 7% for oversea stock base on entry price,
DY>/= Risk Free rate + LT inflation rate + local/oversea currency pair CAGR
SG : CPF SA 4% + 10yr inflation 2% = 6%
HK : 10yr TB 2.0% + 10yr inflation 3.0% + 10yr CAGR SGD/HKD 2% = 7%
US : 10yr TB 2.5% + 10yr inflation 2.5% + 10yr CAGR SGD/USD 2% = 7%

3.2) Continue 5-year non-stop payout dividend and no reduction in DPS (Dividend Per Share), best is growing year after year. For overseas stock, looking for dividend stocks with 10 years non-stop payout.

3.3) Strong fundamental stocks (eg. ROE > 5% and other criteria) to avoid value trap of high dividend yield with weaker fundamental or lower share price.

4) Telcos, Utilities, Banks, Consumer Staples and Consumer Monopoly are considered defensive sectors that can make money in any economic environment, therefore ideal for dividend stock investing. People usually will not shut off their power, close bank accounts, give up their mobile line or Internet, stop buying food & drink or stop buying toothpaste when times get tough. Furthermore, some of these companies have grown to big scale that dominate the market, they are either natural monopoly or near monopoly, duopolistic or oligopoly in the industry.

We should drive the money (helping others when you are successful), not driven by the money (making money only for own gain).

Investors should learn the unique LOFTP Strategies (Level 1-4, Optimism, Fundamental, Technical, Personal Analysis) developed by Dr Tee to choose strong global stocks, buying them at low price, then holding for consistent dividend payout or selling for high capital gains. High-quality free stock investment courses are provided by Dr Tee to the public.

Register Here to learn High Dividend Stocks & other 10 Strategies for Free: www.ein55.com

Filed Under: Fundamental Analysis, Stock Market Tagged: Charity Course

$155,000 Charity Courses Donations for Tzu Chi (慈济) with Summary of Global REITs Course

Posted on May 12, 2019 Written by Dr Tee (Ein55)

Dr Tee, Ein55 Mentors & Graduates have together organised 8 charity investment courses (REITs/Business Trusts in Nov 2015, May 2017 and May 2019, High Dividend Stocks in Mar 2016 and Oct 2017, Capital Growth Stocks in Apr 2018 and Discounted NAV Stocks in Sep 2016 and Nov 2018) in the past 4 years, donating net income of around $155,000 to Tzu Chi 慈济 (Singapore). We hope to inspire more Ein55 Graduates to reach out the society, helping others who are in need. More importantly, they have also learned the secrets of making money through investment. When more Ein55 Graduates are successful financially, they could also contribute back to the society to help more people in future.

Here are key learning points from the recent Charity Course on Global REITs:

1) REITs are collective investment schemes that invest in a portfolio of income generating real estate assets such as shopping malls, offices, hotels or serviced apartments and hospitals. It is also a type of security that can trades on major exchanges like other listed securities.
1.1) Assets of REITs are professionally managed ie REITs Manager.
1.2) Revenues are derived mostly from rental payments, >90%.
1.3) Net income generated from assets must distributed at least 90%, quarterly or half yearly to unit holder.

2) 7 Risk factors for REITs analysis are :-
2.1) Market Risk and Income Risk which are intervene each other
2.2) Foreign Country risk especial currency exchange rate change
2.3) Concentration risk – depend on single property or few tenants
2.4) Leverage risk – revalue down of asset resulting hit gearing limit
2.5) Refinancing risk – unable to secure new loan or new loan at higher cost
2.6) Liquidity risk – difficult to buy/sell portfolio asset

3) 4 common growth strategies adopting by REIT manager are :-
3.1) Acquisition – from sponsor or 3^rd party
3.2) Asset Enhancement Initiative (AEI) – shopping mall to increase NLA
3.3) Organic growth – positive rental revision and increase occupancy
3.4) Development & re-development – cap limit increase to 25% from Jan 2017

4) 3 Key Criteria in Valuation of REITs:
4.1) DPU – look for stable or growing adjusted DPU
4.2) NAV – look for growing NAV & lower PB
4.3) Debt – look for lower interest cost & lower gearing

We should drive the money (helping others when you are successful), not driven by the money (making money only for own gain). Investors should learn the unique Optimism Strategies with FA (Fundamental Analysis) + TA (Technical Analysis) + PA (Personal Analysis) developed by Dr Tee to choose strong global stocks, buying them at low price, then holding for consistent dividend payout or selling for high capital gains. High-quality free stock investment courses are provided by Dr Tee to the public.

Filed Under: Fundamental Analysis, Value Investing Tagged: Charity Course, reit, reit course

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