A Thought from the Recent Forum (25th July 2019)
A couple of weeks back, I spent my Saturday morning at the Mid-Year Investment Forum, an annual investment event organised by The Edge.
While part of my presentation was covered in a subsequent article on The Edge, I penned down further thoughts.
During my presentation in the previous year’s event, I told the audience that I was veering towards blue chips as they were trading attractive valuations. While my investing philosophy is largely biased towards uncovering hidden small cap gems in the market, I also believe we should be aware of opportunities and nimble enough to act on them.
In this year’s event, the macroeconomic situation is significantly different, on the back of the ongoing trade war and unpredictability in Fed interest rate policies. In addition, many of the blue chip stocks I mentioned last year have rebounded strongly from their 2018 lows.
This time round, my presentation centred around property and construction companies, which I think may be beneficiaries from prudent management and potential influx of business.
In the property sector, my preference is Sing Holding Limited, which I think got lucky with its acquisition of a plum real estate site in Sengkang, and has already sold over 85% of the units at its development, Parc Botannia.
I also believe the construction sector, which has experienced a very tough few years, will be bolstered by government intervention in releasing projects for Changi Airport expansion, the North-South Corridor and phase 2 expansion for the integrated resorts in Singapore. My preference in the sector is Yongnam.
I also shared that HRnetGroup is another company I believe in, due to its market leadership position in the HR business and strong commitment of the management team. In the manufacturing sector, Fu Yu Corp, one of the largest plastic manufacturer in Singapore may also be in the early turnaround years. Moreover, the company is generating strong cash flow and paying a dividend exceeding 8%.
Do note that this isn’t a recommendation or advise to invest in these stocks.