This is an update to my Singapore stock portfolio for End February 2013. For previous months, please see
As stated in the last post, I have been looking less at REITs, but at other stock investments which have strong free cash flow and dividend yields.
It is a very strong infrastructure company with a diverse business portfolio including Geospatial Technology, Industrial Property Design and Waste Water as well as Energy engineering. It has very strong economic moats from having the exclusive license in geo spatial technology for many countries as well as one of only 3 full turnkey industrial real estate solutions players.
It has a reasonable yield at about 9x and attractive dividend yield of above 5% with very low leverage. Other investment merits are high free cash flow, low payout ratio of about 50%, which indicate further dividend upside. I bought it around $1.20.
Kingsmen Creatives is similar to Silverlake Axis in many ways. It is a business services company just like Silverlake, except that it specializes in corporate interior, events and exhibition design while Silverlake specializes in IT services. Due to little asset requirement, capex is minimal, hence free cash flow is very high.
The free cash flow track record can be seen in increasing net cash balance and it has an excellent dividend payout track record. I bought it at around $0.75, which gives about 5% yield and single digit P/E.
I also increased my stake slightly in Silverlake Axis and substantially in STX OSV as the price dropped to about $1.245 due to the uncertainty around the offer. As you can see, I raised the STX OSV as a percentage of my portfolio from 3% to 13%.
STX OSV was definitely one of the value buys among a relatively high valued market, now that E&Y has advised shareholders to reject the offer, the general is even more unlikely to go through. See Ernst & Young Report Recommends STX OSV Shareholders to Reject $1.22 Offer
For further information, you may be interested in: