Dear Fellow Investor,
Weekly chart of EWS, the Singapore country fund traded on the NYSE.
Our core holding in Singapore is OCBC bank which I bought a few years ago as a stable and rising dividend payer and also its exposure to China through their Wing Hang Bank acquisition. OCBC benefits from Wing Hang China retail exposure and China Greater Bay expansion. I chose OCBC also because of their affiliation with Great Eastern Life. This is similar to Public Bank and their insurance arm LPI.
Presently,
Singapore Banks Offer Compelling Valuations
Prices of the banks have rallied somewhat since May; however, valuations are still compelling at current prices. DBS trades at 1.04x P/B, UOB at 0.97x P/B and OCBC at 0.84x P/B. If we compare this to its historical P/B valuations, DBS is trading close to its -1 SD, UOB and OCBC below its -1 SD.
Below is a quote which explains our reasoning of why investing in quality stocks is now a good idea.
"The core of what we do today is the same as what we were doing back then. It may have become more sophisticated, but essentially, it’s the same: opportunities are to be found in those parts of the market that others are avoiding and those places where change is happening. It’s about avoiding the crowd and looking in the neglected or unloved parts of the market.
If you have seven people in a room talking about a particular investment idea and everyone walks out thinking it’s a great idea, that’s a terrible idea. The good ideas should be uncomfortable. There should be something about them that’s stopping you from doing it and you have to get past whatever that is." Andrew Clifford, Platinum Asset Mgt
In the US we chose Walgreen Boots Alliance, a pharmacy chain. They are a value stock trading at a PE of 11 and a 4.4 % yield. They offer online as well as brick and mortar facilities. They are benefitting from the Covid hysteria and economic recovery now taking place in the US. It is not a fashionable stock and is unloved by the crowd but risk is low at current price and there is substantial upside . They are financially solid and a simple business which deals in basic necessities. Warren Buffet would love this company.
Our Malaysian portfolios continue to improve. It is good to see Maybank and Public Bank rise. These have been under a cloud of doom but the cloud is lifting.
Covid seems to be burning itself out and life is slowly returning to normal. Casinos are opening in Las Vegas and Macau. Once Genting Malaysia opens we could see a rally in this deeply undervalued stock.
Invest well and grow your wealth, Bill
Critter of the week is the Zoo Negara king cheetah one of the rarest in the world. The zoo should be open tomorrow 7 June.
No comments:
Post a Comment