Largest investments updated (4Q 2019).

From my last couple of blogs, readers would be able to get an idea of what might have changed in my portfolio.


Since the last blog, however, I have made another significant investment or, more accurately, reinvestment.

What am I talking about?


Clue:

Some readers might remember that I reduced my investment in Wilmar significantly in 3Q 2019 in the month of July, booking a pretty decent capital gain in the process.

Wilmar lost its position as one of my largest investments in 3Q 2019 as a result of that move.


I explained that the move was based on technical analysis (TA) and not because I thought Wilmar was no longer a fundamentally good investment.

That meant I would be building up my investment in Wilmar again when the time is right.

I still like Wilmar as an investment today and if you are curious as to the reasons, you might want to read the following:

1. 3Q 2018 passive income: Wilmar.

2. Accumulating Wilmar...

My investment thesis remains, more or less, unchanged.

Wilmar is an amazing business that has gone unappreciated for a long time.

With the IPO of its Chinese subsidiary in the works, Mr. Market is beginning to appreciate the value that is locked within Wilmar.

Since reducing my investment significantly in July, I have been waiting to increase my investment in Wilmar again. 

Although I wondered if we could see $3.10 or even $3.00 a share again, using TA, I decided that buying at $3.60 a share or lower might be a good idea.








This is because even though Wilmar's share price has retreated, the 200 days moving average (200dMA) in its chart is still rising.

The 200dMA is a long term moving average and as it is rising, it should provide a stronger support.

The rising 200dMA is at $3.54, approximately.

Of course, TA simply shows us where supports could be found.






TA cannot tell us if the supports would be tested or not.

So, what to do?

Start buying at $3.60 a share, maybe.

TA also cannot tell us if the supports would hold or not.

So, what to do?

Make sure we don't throw in everything including the kitchen sink.

Anyway, informed by some simple TA, making use of Mr. Market's current depression, I significantly increased my investment in Wilmar so that it is again one of my largest investments.

So, together with Wilmar, what are my largest investments now?







$500,000 or more:
*CPF.

If you are laughing, I hope it is for the right reason.

Read:
Largest investments updated (3Q 2019).

From $350,000 to $499,999:
*AIMS APAC REIT.
(formerly
AIMS AMP Cap. Ind. REIT)

Nothing has changed here.

Yes, AK is so boring.





From $200,000 to $349,999:
*ComfortDelgro.
*Centurion Corporation Ltd.
*Accordia Golf Trust.
*Development Bank of Singapore.
*OCBC Bank.
*IREIT Global.

So, from having only two members, this group's membership has tripled in size, now boasting six members.

Increasing my investments in Accordia Golf Trust, DBS and OCBC meaningfully moved them up from the lower bracket.

The fourth new member, IREIT Global, made the biggest jump as it makes its first appearance in this list by skipping the lower bracket altogether.

Read related posts at the end of this blog if all these sound new to you.

From $100,000 to $199,000:
*Ascendas H-Trust.
*Wilmar International.

Wilmar returns as one of my largest investments by joining the lowest bracket in the list.

If Mr. Market continues to feel depressed about Wilmar, I would probably be buying more.



Now, remember, when we invest, we have to take into consideration our circumstances and not "suka suka" ride on other's coattails.

What?

Cannot find AK's coattails?

That is because AK doesn't wear a coat lah.

La la la la... lah. ;p

On a serious note, remember to "eat bread with ink slowly."

Don't know how?

Read:
How to have peace of mind as an investor?

Yes, peace of mind is priceless.





Related posts:
1. 3Q 2019 passive income: Numbers.
2. 3Q 2019 passive income: IREIT.

3Q 2019 passive income: IREIT Global.

I shared my passive income numbers in my last blog and also revealed that I significantly increased my investment in IREIT Global.

Now, I will explain why I chose to increase my investment in IREIT Global in 3Q 2019:

1. It seems to me that the negative interest rate will persist for some time to come as ECB just made it even more negative recently which means that IREIT Global's low cost of debt will remain low and, if we recall, the REIT actually refinanced at a lower interest rate of 1.5%, down from 2% not too long ago.

See:
ECB negative interest rates deepen.





2. Although the REIT used to have a relatively high gearing ratio which might have worried some investors, it has come down to 36%, but I have said before that what was more important was its interest cover ratio which was very healthy. 

Now, related to point #1 on deepening negative interest rates and refinancing at a lower interest rate, IREIT Global has an even higher interest cover ratio of about 11x which, if I am not mistaken, no other REIT here is able to match and compared to gearing ratio, this matters more.





3. CDL bought a 50% stake in IREIT Global's manager earlier this year in April and they also bought a big chunk of IREIT Global itself at around 75.5c a unit, if I remember correctly, which we could use as a guide as to what CDL might have thought as a fair price to pay for an investment in IREIT Global.

4. With CDL and Tikehau (the joint-owners of the REIT's manager) having relatively meaningful stakes in IREIT Global aligns their interests with those of other, including minority, unit holders which helps to give me assurance that they would most likely not do anything value destructive as they would end up harming themselves too in such an instance.





5. The original 8% distribution yield requirement was based on a 100% payment of the REIT's distributable income but the REIT has been paying out only 90% which reasonably means a 7.2% distribution yield today would be the lowest that is acceptable to me. 

Any higher distribution yield simply makes the REIT more attractive which was very much the case when I added to my investment as its unit price plunged in 3Q 2019.

I shall not detail the REIT's numbers, portfolio and future direction here because the REIT did a presentation to investors just last month and the slides can be accessed on their website. 

Look for:
SGX-DBSV-REITAS Corporate Day Investor Presentation In Bangkok. 
(Published on 5 Sep 19.)





I believe that IREIT Global has great potential and it seems that conditions are right for it to grow.

Of course, I do not know for sure whether the new management team is going to grow the REIT but it is a reasonable assumption that CDL would not have invested so much in the REIT if they had expected it to stagnate. 

To be quite honest, the status quo is not all that bad either as IREIT Global is a relatively stable and attractive investment for income in the S-REIT universe.






By having a much larger investment in IREIT Global which has shown reliability and predictability in its DPU over the years, the income investing focus of my portfolio should strengthen and this should result in higher passive income generation in the future.

For those who might have missed it, I am providing the link to my passive income numbers for 3Q 2019 below.

Related post:
3Q 2019 passive income: Numbers.