Wednesday, 31 January 2018

Charting Ascendas H Reit



Recent News

DIVESTMENT OF ASCENDAS CHINA HOTEL INVESTMENT LIMITED AND
ASCENDAS HOSPITALITY CHINA PTE LTD

Ascendas Hospitality Reit will be divesting Beijing Novotel Sanyuan and Ibis Beijing Sanyuan  for RMB1,156.4 million (or approximately S$235.9 million). Aggregate valuation of the Properties was RMB574.0 million (or approximately S$117.1 million) (“Independent Valuation”) as at 31 October 2017. Completion is expected to take place in first half of FY2018/19.

Reasons for the divestment:
  1. Agreed Purchase Price is Attractive
  2. To free up capital and provide greater financial flexibility for fund deployment towards potential acquisitions, value enhancement and/or debt repayment.

Reference: http://ir.a-htrust.com/newsroom/20180129_174423_Q1P_VBYBLFV4BCKKIEBG.1.pdf


The divestment proceed could be used for debt repayment, acquisition or other financing activities. I would be concerned with whether they can find value accretive acquisitions elsewhere to boost their rental revenues as their debt level is quite healthy. Their hospitality assets, after the divestment, will only be left with the ones in Australia, Japan and Singapore.


I will hold off this REIT for now until they announce concrete actions on their divestment capital use.

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For more information relating to trading strategies, check out my Trading Strategies page.

Sunday, 28 January 2018

Charting DBS, Keppel Corp

I know this is like looking at the rear-view mirror but I shall see how I can apply past lessons to future trades. I charted periods of both when their stock prices declined and also when they ascended.

(I prefer to use stoch 20 as it is smoother instead of 14, one of them I forgot to change.)


DBS




No wonder share price chiong chiong chiong...

Keppel Corp



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Elder's favourite indicators

I was reading Alexander Elder's book "Entries and Exit" and he mentioned using 5 indicators to help him determine trade actions (there is no need to use more than 5). They are namely - moving averages, channels, MACH-Histogram, Force index (invented by him), and momentum indicator such as Stochastic.

Here are a few indicators which I think are relatively easy to use and worth re-visting. I am a believer of using technical analysis to buy fundamentally good stocks. As a reminder to myself when choosing indicators, I have briefly summarized their key features below and if you want to read the full details from calculations to usage please click on the reference links.


  • Elder Force Index = Change in price x volume
- Measure of buying and selling pressure.  Only indicator which factors in volume.
Reference: http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:force_index


  • Envelope (a simple trend channel), Bollinger band (trend channel which depicts volatility)
  • MACD
- MACD fluctuates above and below the zero line as the moving averages converge, cross and diverge. Traders can look for signal line crossovers, centerline crossovers and divergences to generate signals. It is not particularly useful for identifying overbought and oversold levels.

- Signal line is a 9-day EMA of the MACD Line and trails it. A bullish crossover occurs when the MACD turns up and crosses above the signal line. A bearish crossover occurs when the MACD turns down and crosses below the signal line. 

- Can be used to spot divergence patterns.


  • Stochastic Oscillator 

- A momentum indicator bound between the range of 0 to 100
  While momentum oscillators are best suited for trading ranges, they can also be used with securities that trend, provided the trend takes on a zigzag format. Pullbacks are part of up trends that zigzag higher. Bounces are part of downtrends that zigzag lower. In this regard, the Stochastic Oscillator can be used to identify opportunities in harmony with the bigger trend.

- Below 20 would signify oversold and above 80 would signify overbought. The indicator can also be used to identify turns near support or resistance. Should a security trade near support with an oversold Stochastic Oscillator, look for a break above 20 to signal an upturn and successful support test. Conversely, should a security trade near resistance with an overbought Stochastic Oscillator, look for a break below 80 to signal a downturn and resistance failure.
Also look out for higher highs and lower lows (eg. Even though the stock held above its prior low, the lower low in the Stochastic Oscillator shows increasing downside momentum).

- The settings on the Stochastic Oscillator depend on personal preferences, trading style, and time frame. A shorter look-back period will produce a choppy oscillator while a longer look-back period will provide a smoother oscillator.

- A 14-period %K would use the most recent close, the highest high over the last 14 periods and the lowest low over the last 14 periods. %D is a 3-day simple moving average of %K. This line is plotted alongside %K to act as a signal or trigger line.
You could also adjust the duration to suit your chart analysis time frame.

Reference: http://www.stockcharts.com/school/doku.php?id=chart_school:technical_indicators:stochastic_oscillator_fast_slow_and_full


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Friday, 19 January 2018

Asset play - GL limited

Instead of sitting on my current holdings and hoping that the bull doesn't lose its energy, I decided to reap some profits from OCBC (after reaping Genting last month) and put the freed capital into other 'down' stocks with potential of rebound. Recent purchases made are M1, Singtel, Comfort Delgro and GL limited. Regretfully, I didn't watch the market closely last year and missed the semi-conductors' crazy price climb. Now I am not sure if it's a good time to jump into the bandwagon or just let it run on without me. Venture Corp has made it into the STI with a sky high price currently (you could check out the climb from year 2015). I shall not start another 'if only I could turn back time' grouse.

The latest addition to my portfolio is GL limited [B16], which I happened to chance upon with a stock screener. It is an investment holding company under the Guoco Group. It holds a portfolio of hotels at prime locations in the UK. Part of its income comes from the Bass Strait Oil royalty.

Based on its financial statements, its Asset value per share is approximately $1.24. Now it holds a price-to-book ratio of 0.8. Debt-to-equity is low. Dividend per share has been consistent. That's what I took a liking to. On the side note, its free cash flow is a bit disappointing. The company has growth potential if the global economy outlook is favorable for tourism and if it unlocks value in the loss-making assets to generate other business revenue.

Some risks as mentioned in the Chairman's statement are - uncertainties around the full impact of Brexit, the continued threat of terror attacks and an expected increase in room supply.

It will remain under monitoring as an asset play stock.

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Next post: Elder's favourite indicators

Distilled thoughts on business & people management

There are many great articles out there, notably from Harvard Business Review and Inc.com, that talk about leadership and how to manage a business. I would say I am quite an amateur in terms of people and business management (as I only started taking on a managerial role in 2013). Regardless of where our core expertise lies - we can be our 'own shepherd', the entrepreneurs or in the corporate world climbing the career ladder, I dare say that these two are the most important aspects to master. Within the scope of people and business management, there are of course many skills involved such as communication, marketing, strategic thinking etc which can form multiple modules under any academic course and may take years of experience to master.
I would just like to share some of my thoughts from academics and experiences, particularly in the context of operations, in this post.

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