About
My fling with the stock market began during my uni days when I was studying Finance in Sydney. The first 2 years of my investment career were disastrous to say the least. The first stock I ever bought was in a high-flying tech company on the ASX called Imagineering Technology Ltd.
I bought it near its peak and soon after the company went insolvent. Eventually it was taken over by First Pacific (the HK-listed arm of Indonesian tycoon Sudono Salim) and I managed to scrape a few cents in the dollar. Then I dabbled in options and lost my pants too… I bought call options over a company called Santos Ltd which turned out to be a great company. Unfortunately the option was so far out-of-the-money and it expired worthless.
Of course there were other losses …. but there were some wins as well which I shouldn’t brag about. The important thing is that Investment has been a life-long learning experience for me. Through failures and success, I have learned techniques which help me become a much better investor.
And this is the reason horizon.my exists.
I’m hoping that what I put up on this website will have a positive impact for the aspiring investor out there. Most people I know either lose money on the stock market or don’t give a hoot that it exists. And I think it comes down to the same old story:
1. Unrealistic Objectives – Many people out there are in the stock market to make 20% per day or 100% per month on their money. This is total baloney. If you can get 22% per annum compound for 43 years… you’re even better than Warren Buffett. You may not realize, but it’s really about consistency and not one-off windfalls. Personally I set a target of 15% per annum compound as measured in 5-yearly intervals. This means that I should be doubling my money every 5 years.
2. Lack of Knowledge – Most people, and I mean most people, buy stocks and not businesses. What does this mean? Well say if you wanted to invest RM1 million to buy a Restaurant, would you not spend time studying it, research your competitors, think about your value proposition, strategy etc? You would, wouldn’t you? But when it comes to the stock market, “why bother” is the majority attitude. It’s just so much easier to hear a rumour and call up your broker…. to heck with the financials and the big-thick Annual Report.
Well the good news is that with a little homework (maybe a couple of hours a week) you can have a real edge over the rest of the market.
3. Psychology of Money – This is the hardest one to master. The stock market is driven by GREED and FEAR. Any successful long-term investor will tell you that you need to overcome the terrible twins in order to win. More about this as we journey along.
If you have LOST MONEY on the stockmarket previously, I’d say that most likely it comes down to one of the above. If it’s any consolation, THE PAST DOES NOT EQUAL THE FUTURE (don’t take it from me but take it from Anthony Robbins). With a little effort and know-how, you too can have an edge and invest like pros.
FUNDAMENTAL ANALYSIS… analysing the underlying business behind a stock is the key to overcoming the second limitation. To succeed, you need to know a little of what the company is all about.
My team and I have painstakingly created a database that lets you obtain key financial data for the 50 largest companies in Malaysia. And we are continuously expanding this database. It will save you a whole lot of research time but this in itself is insufficient. You will also need to know how to go about analysing a business apart from looking at numbers. I’ll be happy to share with you some insights from my experience as we go along.
PORTFOLIO TOOL… my techie friends have developed a really neat tool which helps you to monitor your stock portfolio. This one is different from others… most portfolio tools let you see the value of your holdings only. With this one you can do Sell transactions and keep track of your P&L including transaction costs. You can also record your dividends. In doing so, you will have a better picture of your overall returns.
So journey along with me and “Invest with Passion”.
Sincerely,
Larry Lam
(Blog Author)
I would normally agree with you but comeon, we are talking about...
December 3rd, 2008 at 10:11 am
Hi, I m a newbie and really enjoys this site.
Just need to clarify some info posted with regards to:
a) DPS
Seems Genting has a DPS of 0.37 on Dec 1 2008 but 0.07 the next day?
b)Ratios calc
Any chance the formulas used can be shared? Because I think generally ratio formulas has variations ie defn of debt etc.
c) The Rule of 72 applied for 7 years ie 7.2% or 10.3%?
d) Generally the company info displays EPS and diluted EPS but EPS info may not be available for some companies. Reasons why certain info is not available?
e) Is there a way to find info out WHEN companies are planning their declaration of divs?
Thks so much for a great site.
December 3rd, 2008 at 12:26 pm
Hi Desmond, thanks for your comments indeed. Here are the answers to your questions:
(a) Genting
Dividends for FY2007 include an Interim Dividend of 2.7 sen paid on 25/10/07, Final Dividend of 4.3 sen paid on 23/7/08 and a Special Dividend of 30 sen paid on 21/12/07. According to their Annual Report (p47), the Special Div was in memory of the late founder, Tan Sri Lim Goh Tong.
(b) Ratio Calulation
I believe we compiled most of the calculation methods here: Financial Ratio Calculation
Note that Dividends may consist of both normal and special dividends. Our Dividend Yield is based only on the normal divided by latest share price. Return on Equity & Return on Capital Employed calculations are based on Average Equity and Average Capital Employed. Some people calculate based on Opening Equity/Capital Employed only. There’s no right or wrong here but you will find that using just the Opening figure can be misleading where the company’s equity has grown signficantly during the year. See for example Sime Darby – ROE and ROCE is extremely high now if you use Opening Equity to calculate. This is because Opening Equity is on a pre-merger basis while earnings include Golden Hope & K Guthrie earnings during the year. Hope it makes sense.
(c) Rule of 72
You’re right! Thanks for pointing it out
(d) Diluted EPS
Where there is no Diluted EPS, most likely the company’s share capital did not change during the year, and they did not have potentially dilutive instruments such as options and warrants issued.
(e) Dividend Date
We currently track upcoming dividends only for a few selected counters. Don’t have the resources to do it systematically yet
Thanks again for your great encouragement! Hope you have been blessed
December 27th, 2008 at 5:24 pm
Hi Larry,
I stumbled upon this site while i was surfing the net for investment advice. Really cool site with great advice/tips on Malaysian stock market! Will be visiting this site again in future…cheers
December 29th, 2008 at 7:49 am
I tried to subscribe to your website. However the email that was sent to me did not give me any password and I am note able to log on to your service. Could you kindly assist me as I would very much like to read your articles.
Thank you
December 29th, 2008 at 12:16 pm
Hi Roy, thanks! Hope to write some good articles in the coming year.
Hi Sally, there are 2 different subscription. The first is the RSS at the top – for this one, you key in your email and every time there is a new article, the Feedburner system will email to you automatically without any password or login. The second is the Portfolio Tracker system here: http://www.horizon.my/portfolio/ – for this one you need a password to login. When you register, you can just set your own ID and Password, the system will then email you an activation link and you need to click on it to activate your account. Once activated you can use the free portfolio tool to manage your stocks. Just drop me a note if you have any problem activating it.
March 23rd, 2009 at 5:45 pm
Hey Larry,
I navigated into this website accidentally, and I found it to be a great and informative site!
Besides those company fin analysis tools, the analysis articles written are great!
Keep up the good job! I will make it a habit to browse and read your articles from today on. =)
March 23rd, 2009 at 6:16 pm
Hi Jeff, Thank you for your compliments indeed. Haven’t really had much time to write in the last few weeks, but will certainly do my best on the articles & content
June 13th, 2009 at 5:31 am
Hi Larry,
Found your website by googling Baltic Dry Index.Great website.I live in South Africa and hold local stocks via our stock market,known as the JSE, short for the Johannesburg Stock Exchange.
Hope to see some of you guys from Malaysia at the soccer World Cup which we are hosting,starting in 364 days.
Thanks again for a super website, happy and profitable trading to all your readers and especially yourself Larry.
June 13th, 2009 at 3:01 pm
Hi Andrew, thanks for visiting and also your well wishes. I don’t have any experience on the Johannesburg Stock Exchange but I’m sure there are some great gems out there, hope you find some good ones! Let me know if you start a website one day, would love to hear your stock investment experience on the JSE
June 14th, 2009 at 6:19 am
Hi Larry,
For an accurate insight into the goings on in South Africa,visit http://www.moneyweb.co.za, a highly respected stockmarket website,founded and edited by Alec Hogg.
As you know we are heavily oriented toward resource stocks.
Our two largest are Anglo American and BHP Billiton,followed by some heavyweight platinum equties.
Regards, Andrew.
June 15th, 2009 at 11:13 pm
Hi Andrew, thanks for the link… I’m checking it out now and WOW there’s a lot of info there. I used to follow BHP on the ASX, and of course who can miss Anglo American with all its diamonds and he glitz surrounding the Oppenheimers! In Malaysia, we have the palm oil sector which is a little like your mining sector, all the analysis revolves around commodity prices and how well you can extract the commodity.
July 21st, 2009 at 2:26 pm
Hi Larry, I am amazed at what a closed shop the Baltic Dry Index is (in terms of the availability of free information ). Finally found a website which gives you the daily BCI info for free,as well as the fine detail of the 3 main constituants, which are the index’s for Capesize – BCI, Panamax – BPI and Supermax – BSI. The link is http://www.dryships.com/pages/report.asp
July 26th, 2009 at 6:20 pm
Hi Larry
I really like your blog.. I live in Japan but i really like Malaysian reits for thier discounted price and yield. I have been investing in quill capita trust since its debut. I really like the management and their semi-conservative leveraging.
It is still giving 8% returns at current level do you reccomend going in more? Most reits around the world have lowered dividends but qct seems to always be progressing upward.
Please let me know your thoughts,
Thanks so much.
B D
July 27th, 2009 at 4:22 pm
Thanks BD. If you only have Quill Capita in your portfolio, then it might be better to diversify a bit. Their gearing is at the higher end of the REIT spectrum – currently 37% of gross assets - and they are generally more acquisitve than the others (except for Axis REIT perhaps). I don’t hold any QCAPITA myself but if you had bought it at the listing price of RM0.84 and held it till now, you’d be outperforming the REIT sector generally. For me, I starting buying some REITs 2 months back, but focusing more on the battered-down ones like Atrium REIT, Star REIT and Tower REIT. Like Quill Capita, these have moved up along with the rest of the sector generally.
September 2nd, 2009 at 2:23 am
Hello Larry,
I found this website while googling for some information on Bursa. I am new in investing. Could you please advise me on the information I should be aware? What are the long-term stocks that you personally like to invest in?
Thank you and keep the good work by providing lots of useful information on this website!!
September 2nd, 2009 at 11:18 pm
Hi James, thanks for visiting… glad you find this site useful
Personally I focus a lot on a company’s track record, integrity, earnings, cash flow and valuation. I only follow quarterly results to check if it confirms the story that management is telling. If I’m happy with how they have done for at least the last 3 years, I’d then form a view as to the price I feel it’s worth. I lean more towards value investing, so I seldom pay more than 12x PE on a stock, unless there is a compelling growth story in it. Currently, my portfolio is around 60% concentrated in 3 large caps including AMMB, COMMERZ and PETDAG. These should track the FBM KLCI index quite well but I’m confident will beat the index in the medium term because of superior growth & valuation profile relative to the rest of the bunch. Another part of my portfolio consist of higher yielding stuff such as NCB Holdings, APM Automotive, a couple of REITs to provide some income. The balance is in smaller cap stocks which I feel have decent growth potential, eg JOBSTREET, NOTION VTEC, MANULIFE.
As a new investor, I believe that quality & security of income should be the key criteria for you, You need to experience some wins to build your confidence so that you can become a good investor in the long run. I would stay clear of companies that have gearing of more than 35% of Shareholder Funds.
September 3rd, 2009 at 1:00 am
Dear Larry,
Many thanks for taking out your time to share you valuable experience with you. The information is really useful. Thanks again!
September 22nd, 2009 at 11:11 pm
Hello Larry, just stumbled on to your blog. excellent info. I am from singapore and would be interested in investing in a KLSE counter. If you were to invest in 1 REIT would it be the starhill?
other counters that you hold doesn’t excite me. any new ones that you have added lately?
Cheers…kt
September 23rd, 2009 at 11:52 am
Hi KT, thanks for dropping by. As you know, Singapore SGX has a much more developed REIT market compared to Bursa Malaysia. However Malaysia does have a lot to offer in terms of good yields, quality properties and increasingly good & professional management. Personally I invest in more than 1 REIT for diversification purposes and also to get exposure to certain sectors. It really does depend on your objectives. If you are conservative, Starhill REIT, Tower REIT and Boustead REIT have a lower range gearing and are conservatively managed (although Boustead REIT has single-tanant risk). For these guys, you hardly see any new acquisitions, as compared to say Axis REIT which is very active in buying more and more properties. Axis is more highly geared, which can be rewarding in low interest rate environment such as this.
When investing in the more aggressive REITs such as Axis and Hektar, you need to look at entry and exit, more so than the more conservative ones where you can just stick in your money and leave it there to collect income distributions.
Cheers, Larry
September 23rd, 2009 at 4:40 pm
Thanks for the info. Yes, sgx has more reits but they are no more cheap. with their high gearing now and they are calling a lot of rights issue which defeats the purpose of income yielding stocks.
any other stocks(mid-cap) in klse worth investigating or tracking. with all the indices running ahead of fundamentals, it’s just tracking now to pounce at the right time.
If you are interested or want to know any sgx stocks do let me know.
bye…kt
September 23rd, 2009 at 5:00 pm
You are welcome. I’m also tracking a company called APM Automotive. It’s an auto parts manufacturer with good management, I bought some shares recently between RM1.50 to RM2.00, they are currently 2.06/2.10 but I’m hoping for dips below RM2 before adding some more. Here’s a recent article on it:
http://www.horizon.my/2009/04/apm-automotive-holdings-berhad/
Thanks for your offer. Would love to cover SG Reits at some stage but just don’t have the time to do so now. After Malaysia REIT will probably be Australia REIT which I follow quite closely too. Aussie REITs have had terrific returns during recent months (since the market crashed last year) and is one of the most developed REIT industry in the world.
October 11th, 2009 at 10:02 pm
Hi Larry, pls let me know what you think of this stock mamee double decker(sounds like a bus company). Seems undervalue gem or am I missing something here.
Cheers..KT
October 12th, 2009 at 9:43 am
Hi Larry, do you or anyone by any chance has a copy of the latest OSK top 50 small companies article. Like to get hold of one to better understand and research for potential gems.
tks..KT
October 15th, 2009 at 1:34 pm
Hi KT, Mamee has been around for a while, I don’t follow it that closely but it does look like a steady performer. Revenue growth in the last few years have been impressive and their products are all over supermarkets – Mamee, Mister Potato etc. I’m not sure why it’s called Double Decker… does sound like a bus haha! Took a quick look at their Annual Report and note that 2 of their directors are drawing salary close to RM1 mil each which is quite high for a company this size. But they have net cash of RM40+ million and profit growth looks decent. I guess it’s not expensive at 12x PE but dividend payout is pretty low and value is not exceptionally good given the huge share price run up recently. I don’t have the OSK Top 50 Small Companies article but will ask around for you, email you if I get hold of it. Cheers, Larry.
October 15th, 2009 at 2:01 pm
Thanks Larry, 2 other counters that I started tracking are NTPM and hock seng lee. NTPM need to question director selling and HSL is not cheap and low div yield despite high profits but steady pferformer. let me know what you think.
Cheers…KT
October 17th, 2009 at 1:18 pm
Hi KT, you’re right in that HSL is not cheap… I did think of buying it when it was around 60sen not long ago but did not do so in the end. It’s a cyclical stock and I’m not sure if it’s the right time in the cycle to buy it. But HSL is decently managed with a good track record. I really have no idea why the share price has run up so strongly, maybe Sarawak is one of those states which is more resilient? I hadn’t heard of NTPM before, but when I saw the Premier & Royal Gold tissue paper in their Annual Report… now I know who makes the tissue paper I buy haha! Once again, it wouldn’t be cheap by my standards and the share price has a lot of growth expectations built in. Looking at their cash position, it’s not that strong either although I have not done a detail analysis. They have been making so much profit over recent years, wonder where it all went to? Contrast with other small-to-mid caps like say APM or Zhulian which have accumulated cash piles over years of profit making. I’ve got APM but am starting to look at Zhulian which has no big institutional shareholders apart from Tabung Haji, although this could be due to low liquidity.
October 17th, 2009 at 3:42 pm
Hi Larry, great comments. I never like MLM companies.
BTW do you know of any good blog sites on klse stocks other than your own. I find this site pretty good on the macro front:http://www.investmentpostcards.com/. You might like to look at it.
cheers…KT
October 19th, 2009 at 7:43 pm
Hi KT, there are quite a few blogs out there but I don’t follow most of them, I usually rely on my own research and read as much as I can from Analyst Reports and good publications like TheEdge. From time to time, I’d drop into ZeMoola & Salvator’s blogs. ZeMoola specializes in exposing baddie companies, while Salvator has a lot of knowledge and insight in investment. Here’s the link:
http://whereiszemoola.blogspot.com/
http://malaysiafinance.blogspot.com/
Checked out InvestmentPostcards but it took ages to load… seems there are lots of articles which were very bearish. I also like The Motly Fool for US markets.
Cheers, larry
November 2nd, 2009 at 10:30 pm
Hi Larry, enjoy reading your REITs posts.
What do you think the effect of the fixed 5% real property gains tax (RPGT) that will be reintroduced next year under Budget 2010 on REITs?
November 3rd, 2009 at 11:05 am
Hi HY, thanks for your feedback. The RPGT shouldn’t have too much effect on REITs for now. Most of them are not selling their properties and are still in acquisition mode. As we saw, REIT unit prices have shrugged off the announcement.
November 23rd, 2009 at 6:50 pm
Hi Larry, very informative site, espeacially like the Top 50 data!
I’m new to investing and would appreciate your views on Technical Analysis since majority information that I found on your website points to a very fundamental opinion.
Cheers!
November 23rd, 2009 at 7:39 pm
Hi Danny, Thanks! Glad it’s useful for you. Sorry but I’m no expert on TA at all, tried using it about 9-10 years back and lost money. I resolved then not to continue with it, and since then Fundamental Analysis has worked pretty well for me. Short term trends in the market are highly unpredictable and depending on your strategy, you can make it to be irrelevant. For example if you listened to some notable banking analysts last year, some of them were saying sell on stocks like AMMB at levels of less than RM3.00. In hindsight they might have been right in the short term because AMMB did drop way below RM3. But today, just a year on it’s cracked RM5. Even if you held it and took a paper loss in the short term, you’d still be looking pretty good today. The lesson I’ve learnt is that if earnings, cash and dividends keep going up, then the share price will nearly always be higher in the long term!
January 14th, 2010 at 7:43 pm
Larry
Are u still active on this site. I stumble upon this site and found it interesting. But the posts seem to stop in late 2009.
January 18th, 2010 at 1:03 pm
Hi Lok, thanks for dropping by. I haven’t been able to write much for now, however the Investor database is still updated periodically. Hoping to make this website more alive and happening later this year. Just need to clear some work projects and find some people to help me
February 17th, 2010 at 3:16 am
Hello Larry,
I visit your website on a regular basic. I know and hear quite a lot about buying the metal and energy stocks. Larry, could you suggest some for me to keep for long-term?
Many thanks Larry
February 23rd, 2010 at 4:36 pm
Hi James, I don’t really follow the metal and energy stocks. At the most, I keep an eye on YTL Power and Tenaga from time to time. But I’m not too keen on these stocks as they both have heavy debt burdens. Tenaga also has huge foreign currency exposure which makes its earnings very hard to track.
March 18th, 2010 at 5:47 am
Just want to say hi and wonder why the blog hasnt been updated since November last year.
Keep up the good work.
August 6th, 2010 at 1:34 am
Dear Larry,
I am just wondering which stocks you are holding now. I am thinking of selling my stocks (Maybank and Genting). Could you please suggest stocks that I should consider of buying? Many thanks Larry.
August 9th, 2010 at 6:23 pm
Hi James, I quite like NCB Holdings Bhd and Manulife Bhd for the long term. NCB has had a big run-up recently but it is still good value, I’m hoping for a pull-back to add more. Manulife has been steadily climbing although it hasn’t gone up as much as many other second-liners. Valuation is decent and the company knows the life insurance business. I’ve also got shares in AMMB, Petronas Dagangan, APM Automotive, Plenitude and a couple of REITs currently.
October 29th, 2010 at 10:26 pm
hi Larry,
Do you pick companies that have a great management team and visionary leader plus with high aim of enhancing shareholders value and truthful chairman’s statement? If yes, can you pls recommend some that values returns to shareholders?
I still have a long ways of learning in terms of understanding all the numbers to find real values, so i m trying to start with the basic fundamentals. I picked deleum and ecs recently.do you think they share those values?
thanks
November 1st, 2010 at 5:20 pm
Hi Sunny, usually Honest Management is more important than Great Management. Combine this with a wonderful business with a moat around it and you get what is potentially a great candidate for investment. You know the saying… the business has to be so easy that any fool can run it, because one day, a fool probably will run it. Usually one of the first things I look at is the Director Remuneration page… I eliminate companies that pay their key people millions a year each unless the valuation is so compelling or prospects so bright.
Some examples of companies that are relatively simple to analyze include Petronas Dagangan and NCB Holdings. In the case of NCB, the bulk of its earnings come from Port Operations. It is controlled by PNB and Petronas, its a duopoly business and its only competitor is Westport, so its earnings are mainly driven by the volume of cargo handled which in turn is mainly driven by population growth and economic activity. Valuation wise, it has risen more than 20% recently, but I’m still nibbling at it at the RM3.60-3.70 level (EV/EBIT of less than 5 times). All you need to do is periodically verify its earnings story against its cash flow, and make sure the dividends keep coming in. The company is generous with its dividends, unlike some other cashed-up companies which prefer to hoard cash. It has net cash of almost RM900 million and this ensures it has money to pay good dividends for a long time to come. Importantly capital expenditure requirement is not huge. The main downside of this stock is the lower growth prospect in terms of earnings. Deleum earnings seems to be quite volatile, valuation wise is quite OK at around 4-5 times EV/EBIT and financial position is quite OK but I don’t know anything about Oil & Gas service providers so can’t really comment on the prospects for this company. Will check out ECS and revert to you.
November 2nd, 2010 at 2:28 pm
Hi Sunny, I had a quick look at the ECS ICT Prospectus just now, looks like it distributes ICT products which most likely makes it a cyclical business. If you read One Up on Wall Street by Peter Lynch, he has a chapter that talks about 6 categories of stocks including cyclicals. For such stocks, timing of entry and exit is crucial because you don’t want to be buying at the top of the cycle. Also looks like ECS has thin margins and high working capital requirements. Personally I would not be comfortable with this type of stock unless I know something others don’t. The track record for small ICT companies on Bursa Malaysia has been quite dismal so far, what is it that will make this one different? Took a look at the latest ECS quarterly report ending 30/9/10 and while profit figures look good, the Cash Flow statement reveals that earnings are eaten by by high working capital requirements. So is this a situation that is likely to continue? Are the Sales actually real? Can they collect on their receivables? What is it that sets them apart from their competitors in this highly competitive industry? or What is their “moat” against the competition? If the directors are selling down their stake in the IPO, what is their reason for doing so? These are the questions you need to ask before committing your hard earned money.
November 2nd, 2010 at 3:21 pm
Thanks again Larry,
Had a great time learning, GBU
November 2nd, 2010 at 3:29 pm
hi Larry,
What would your fair price be for manulife and plenitude as of 2nd november.and what do u still think of their prospects for the next four years?
Thanks
November 3rd, 2010 at 3:26 pm
Hi Sunny, great to talk to you yesterday, thanks for calling all the way from China! I do like both Manulife and Plenitude at current prices. I’ve received the takeover notification from Manulife board recently, I’m glad to see that it’s not a 100% takeover. It seems they intend to keep the company listed on Bursa Malaysia. Therefore I’ll be looking to add to my position in the near future. I have yet to work out the intrinsic value for this company but I believe it is one of those companies that has great potential for an increasing stream of dividends in the next 5 years. Also note that Public Mutual has large holdings in Manulife through 8-9 of their managed funds, they are obviously a believer in this stock. I believe Aberdeen Asset Management also likes it. As for Plenitude, this is one of those rare gems on the market. It has honest management, a fantastic cash position to capitalize on its core markets in Johor & Penang and at RM4.70 trades at EV/EBIT of less than 3x. I have not bothered to work out its intrinsic value coz its cheap valuation just screams out at you! Only thing is that it has had a huge run up in the last 2 months so I’m waiting for decent dips before adding to my position. Hopefully this will take place soon after the bonus issue and we’ll be seeing sub RM2 prices again
November 11th, 2010 at 5:29 am
Super article
I know how profitable gold investing can be. My brother made really good money doing just that, and myself I am making good money investing in gold.
I recommend to anyone who’s thinking of starting to invest in gold to read a book or two on this topic, as there so many mistakes and blunders that are possible to make when you first start in this industry.
Thanks for sharing this with your readers.
January 24th, 2011 at 4:43 pm
Hi Larry. Long time no hear from you. No new post since last year and update of REIT comparison from you since 2009?
Need your expertise again. What do you think of STAREIT going full-fledge on hospitality REIT? I’m interested with it, due to it’s attractive dividend yield & this new attempt. But I need other expert’s opinion like you to fine-tune my judgement.
By the way, how come Sunny got your contact number? Haha!
Thanks.
January 25th, 2011 at 4:09 pm
Hi Vincent, I’m no expert on STAREIT… sold my STAREIT sometime back, not too long after they made the big announcement. The concept of a Hospitality REIT itself is good but I’m not too keen on YTL related entities mainly because of the lack of transparency. Even the move on STAREIT is so totally unexpected and there was no communication with investors prior to that to foreshadow this move. I think that speaks volumes in terms of how they view minority shareholders. But having said that, it depends what you’re looking for in your investment. If you’re after 6-8% returns per annum, then shouldn’t be much of a problem
January 25th, 2011 at 9:00 pm
Hey Larry, I understand your concern. It is one of the few REITS that price is lower than NTA, which sounds attractive to me. Furthermore, I noticed some analysts rating it to distribute 11.x% gross dividend this year. Is it be too good to be true?
Apart from this, what do you think of Hektar and ALAQAR? Hektar is facing tight competition for retail rental and it has a lot of lease expiry clients every year, while Alaqar seems to be a better choice due to long tenure with KPJ? As for Potential revenue growth wise, it seems Alaqar has continuous actions to buy more hospitals, while Hektar still retaining 3 malls with 95.x% tenant. I think Alaqar is a lot better here? I’m not sure why Alaqar share price is down 10% lately. D/Y wise they are almost the same for now, +/-1%. Any comment on this?
By the way, do you have an email or Skype to communicate better? Thanks.
February 9th, 2011 at 12:48 am
Hello Larry,
I am reviewing my portfolio and I need your advice on the stocks that I am interested in. You gave me some very useful guidelines and stocks. I managed to make some profit. Thank you for that.
This time, I am thinking of buying certain shares but I am not too sure whether it is a good time to enter the market. What do you think Larry? I am thinking of buying some CIMB, MayBank, Axiata, MEGB and Maxis shares. What are your opinions on those shares? Would you please recommend me some shares as I have limited knowledge related to shares?
Many thanks, Larry!
February 11th, 2011 at 11:54 pm
Hi Larry
Noticed some interest in Starhill from some of the readers..I am actually very bullish on Starhill Reit for these few reasons.
Firstly, it is a YTL Francis Yeoh company and everyone knows Francis Yeoh in Malaysia and is one of the richest people there.
Secondly, he had recently sold of 2 malls in the reit at inflated prices to his Singapore Starhill Global and when I mean inflated i mean 1 billion ringgit much above his purchase price. The best part is that he had settled the purchase with a) cash and b) preffered shares in starhill global . Now Singapore property prices have been advancing and so has the share market so these preffered shares also have increased in value and have not been reflected in the balance sheet as they have not been converted yet into cash.
Thirdly, he has used part of the 1b proceeds and bought over 9 hotels which brings the reit to become a full fledged hospitality reit in Malaysia with names such as
Cameron Highlands Resort;
Hilton Niseko ;
Vistana Penang;
Vistana Kuala Lumpur;
Vistana Kuantan;
The Residences at The Ritz-Carlton, Kuala Lumpur
The Ritz-Carlton Hotel, Kuala Lumpur
Pangkor Laut Resort 3; and
Tanjong Jara Resort
JW Marriot
Fourthly, these properties have not been revalued and earnings have not been captured as it has just been transffered into the reit, I believe he will increase net asset value, earnings, etc in the near future and continue to increase these over the years
Fifthly, the share price is trading at 86 c and net asset value is around 1.25 , remember this is before revaluations, before adding in the preffered shares which have also infalted
Sixth, most reits in Malaysia are trading around and above their net asset value, Starhill being one of the the top 3 in size has not yet been brought up to value in terms of share price
Seventh, YTL and Francis Yeoh have the majority stake in this company more than they have in Starhill Global so it would be in their best interest to see this company rise in value
Eight, Francis Yeoh has just appointed his son to be the director of this company
Ninth, They are one of the only reits where the owners are the unit holders, this is an interview done last year..
“”Properties like Reits are very long-term dividend plays. How many corporation in the world like to have so many units as a unitholder? Look at our Starhill Reit in KL. We own more than 50 per cent. When do you see a property player wanting to take part as a unitholder?’ he asks.
‘They want to be the manager. They probably want to sell the property for a very expensive price and then manage the Reit, make money from it and let the unitholders suffer. But for us, we like to balance the interest between us, the managers, and the unitholders which are also us.’”"
Lastly, Francis Yeoh is a long term, value investor and thinks very much like Warren Buffett, and I believe that the share price of this company is very low and I am convinced that it will do very very well..
February 12th, 2011 at 1:30 pm
Sorry for the late reply everyone. Been so flat out at work recently.
@Vincent – Alaqar had 2 main risk factors which is its higher gearing & single-tenancy risk. I believe KPJ is their only tenant… what if they vacate or something goes wrong at KPJ? While this is unlikely, we are also not sure how their rental rates with KPJ are determined. This makes the arms-length aspect questionable. Hektar has a wide tenancy spread and while gearing is also on the higher side, it should be a lower risk vehicle compared with Alaqar. Subang Parade has a reasonably strong following as a neighbourhood convenience shopping centre but growth is limited due to strong competition nearby. I’m not concerned about the lack of acquisitions in Hektar as long as they can show that they are actively adding value to their centres. Quite often acquisitions are a hocus-pocus way of adding value to investors.
@James – I sold my CIMB at around RM6.90 few months back and thought it was overvalued then haha! My view is that the earnings line may take a few years to catch up with the current share price. But I realize a lot of analysts like it. Personally for me it does not offer much value compared to say other banks, Maybank included. I’m not sure about Axiata and MEGB but Maxis is OK for dividends. I think it falls into the Slow Grower category and valuation is not cheap for the kind of growth rate it offers. For dividends, you may want to check out NCB at RM3.70 instead.
@Basant – thanks for the heads up on STAREIT. They may need to rebuild their following, maybe some investors have lost interest recently due to bigger offerings by Sunway and Capita Mall. Regarding your point of selling their assets at a high price to Starhill Global REIT, I wonder what is to stop them from doing it the other way and sell assets at a high price into STAREIT in future? Many of our Malaysian REITs operate with a lot of conflict of interest that has to be properly managed. Remember that not too long ago REITs in Malaysia are seen as vehicles for unwanted assets by developers. Does a leopard change its spots?
February 12th, 2011 at 6:58 pm
Hi Larry,
Thanks for the quick response
I would normally agree with you but comeon, we are talking about hotels such as Hilton, Ritz Carlton, JW Marriot..these would hardly be called unwanted assests…but the exact opposite, highly wanted assets which will appreciate nicely over time.
He has traded 2 malls for 8 hotels, i think the deal is very bias towards Starhill Reit to grow..
It is true that assets can be sold to STAREIT at inflated prices in the future, but if it was me owning more than 50% of that company(remember Starhill Global Reit Singapore he owns much less than 50%) I would be bias to the one I own more off..
All that said and done, YTL nor Starhill Global does not have any more hospitality assets to sell, so if they want to grow it would have to be done by acquisitions from the market..my theory is that they will wait till their prefferential shares of Starhill GLobal to inflate, cash that out and then go hotel hunting
February 16th, 2011 at 3:20 am
Thank you Larry for the information. Do you have others stocks in mind that you would think of buying? Many thanks