Centurion Corporation is still cheap and a strong BUY.

Regular readers know that a business which I like very much as an investment for income is Centurion Corporation.

I like accumulating stocks of businesses which have a proven track record as reliable income generators.

I especially like accumulating them when they are trading at a big discount to NAV.

If they offer an attractive dividend yield with a relatively conservative payout ratio, even better.

To understand why I invested in Centurion Corporation back in early 2017,

See:
Added Centurion Corporation to my portfolio.






In fact, I like Centurion Corporation so much that I increased my investment in the business this year a few times.

I shared this in a blog in July 2019.

See:
Largest investments updated (3Q 2019).

I bought more when Mr. Market wasn't paying Centurion Corporation much, if any, attention.

Persistent insider buying, however, prevented the share price from falling below 40 cents a share.

So, I would queue to buy at 40 cents a share but often would buy at 40.5 cents a share.






On 25 October 2019, Centurion Corporation's share price closed at 43 cents a share, rising on the back of very high volume.

It broke resistance provided by the 200 days moving average (200dMA).

A bullish sign.

Question:

Could we see share price moving higher from here on?

Answer:

Your guess is as good as mine.

Well, more importantly, what is the implication for someone like me who likes the business?

I think it could be more difficult for me to accumulate closer to 40 cents a share in future.

Look at the chart again.

The 200dMA is gently turning up now and should approximate 41.5 cents soon.

The shorter term 20 days moving average (20dMA) has risen sharply and is currently providing immediate support at 42 cents a share.






Fortunately, I am cool with not buying more at higher prices because my investment in Centurion Corporation is pretty significant right now.

However, for anyone who still wants to get a bigger slice of the pie, paying a slightly higher price now is something probably worth considering.

Why do I say this?

Centurion Corporation got the attention of the analysts at DBS recently.

This reminds me of the time when analysts in UOB Kay Hian sank my plan to continue accumulating Hock Lian Seng's stock on the cheap.

Some readers might remember this blog from December 2014.

See:
Hock Lian Seng: Robust order book.

I said:

"If Hock Lian Seng should attract coverage from more analysts and if they are mostly positive about the stock like I am, I think opportunities to accumulate the stock on weakness could be harder to come by in future."

A case of deja vu?

Maybe.

Newer readers might also be interested in this blog from February 2017.

See:
Hock Lian Seng returns 100% and more.







Some points from a report by DBS earlier this month:

1. Centurion Corporation's purpose built workers accommodation (PBWA) segment is resilient and the expected increase of 3,600 beds in this segment may boost income by 11%.

2. Centurion Corporation's purpose built students accommodation (PBSA) bed count increased by 12.4% so far this year and this may improve top line by 11.2%.

3. Demand for PBWA in Singapore continues to outstrip supply by about 135,000 beds and despite a tightening on the number of foreign workers, occupancy rate rose from 96.9% to 97.4%.

4. Over in Malaysia, Centurion Corporation's PBWA occupancy rose from 90.2% to 91.2% as the Worker's Minimum Standard of Housing and Amenities (Amendment) Bill was passed in July.

5. PBSA occupancies improved from 90.3% to 91% in the UK.

6. PBSA occupancies in Australia improved from 80.7% to 89.8% in RMIT Village and from 82.1% to 93.9% in East End Adelaide.

DBS has issued a DCF based target price of 52 cents a share for Centurion Corporation.




I am more concerned with Centurion Corporation's ability to generate income for me consistently and meaningfully.

However, if DBS is worth their salt, there is more than 20% upside from Centurion Corporation's last Friday's closing price of 42 cents a share.

Time will tell.

I like being paid while I wait.

In the meantime, I will munch on an Old Chang Kee curry puff and watch the following video.





Related post:
More on Centurion Corporation.

Also see:
Centurion Corp posts 21% rise in 3Q earnings to $8.8 mil on higher revenue.

Wilmar: "Target reacquired" and target prices.

Regular readers know that I have been a Wilmar shareholder for many years.

It is difficult not to find Wilmar impressive as a business entity with its breadth and depth of activities.

Many years of Mr. Market's pessimism towards Wilmar gave believers a big window of opportunity to build their exposure.

In the last two years or more, I have been accumulating shares of Wilmar until 3Q 2018 when I decided to sell into the rally, reducing my investment significantly while keeping a core position.

See:
Largest investments (3Q 2019).

It is a strategy that regular readers should be familiar with.

It is so that I would still stand to gain in case the bull had legs.

Some might call it a hedge as, always, I don't know everything.

Well, as it turned out, the bull grew tired and needed a break.






If you are new to my blog or if you are rather forgetful, to understand why I was building a relatively significant long position in Wilmar,

See:
Accumulating Wilmar on price weakness.

You will see how I did temporal comparative analysis in that August 2017 blog.

To understand why did I buy more when Wilmar's share price went under $3.00 a share instead of cutting losses,

See:
3Q 2018 passive income: Wilmar.

Conviction.

Good reasons make it stronger.

Of course, being paid while I waited made patience more affordable.






I watched the latest Terminator movie recently and Arnold Schwarzenegger (aka Carl) in one scene said:

"Target reacquired."

A man of few words, as always.

OK, no spoilers in case you have not watched the movie.

Anyway, Wilmar was still an investment target for me after the partial divestment exercise to lock in gains earlier this year.

Using my limited knowledge of technical analysis (TA), I waited for what I thought could be the right time to increase exposure again.

Over time, as its share price retreated, I thought Wilmar's chart could form either a falling wedge or a cup and handle pattern.





If it was a cup and handle pattern, share price should find a floor at approximately $3.50 a share (i.e. the lowest point of the handle).

Could be a few cents lower or higher. 

I was also keeping an eye on the rising 200 days moving average (200dMA).

Being a long term moving average and a rising one at that, it should provide a stronger support.

By the time I decided to increase exposure again in a big way, the 200dMA was at $3.54 or so which tied in nicely with the approximate low (of the handle) in a probable cup and handle pattern.

I started buying at $3.60 and bought more as it did eventually hit $3.54.

Wilmar became one of the largest investments in my portfolio once more after that. 

If you do not remember reading about this in my blog, you might want to see related post #1 at the end of this blog.








As usual, I scribbled all my TA on a scrap of paper and, unfortunately, I cannot find that paper scrap now.

However, I remember the measurements I took from charting.

Measurements?

Yes, the measured target prices.

Prices?

Yes, that is not a typo.

In the plural.

If Wilmar's share price were to move higher after forming a falling wedge, the measured upside target would approximate $4.50 a share.

If Wilmar's share price were to move higher after forming a cup and handle pattern, the measured upside target would approximate $5.00 a share.






Take my TA with a pinch of salt because I am an amateur, after all.

I know some of you do not believe me but I am just being honest.

Well, amateur or not, if things pan out like I think they might, I would stand to book a pretty handsome capital gain.

If things don't pan out like I think they might, all else remaining equal, I would still stay invested as I am comfortable with my level of exposure in a business that provides me with both elements of income and growth.

Now, who says we cannot be an investor and a trader at the same time?

Older readers would remember this masterpiece of a pyramid drawing by AK the artist:

See:
Investing for income and dividend yields.

and also:

Motivations and methods in investing.

The former was a blog from March 2017 while the latter was a blog from July 2013. 

Newer readers who wish 

1. to know what the pyramid drawing is about 

and 

2. to understand my investment style 

should find the blogs useful.






Newer readers might also want to read related post #2 at the end of this blog. 

Why do I invest the way I do?

You tell me.

Related posts:
1. Largest investments updated (4Q 2019).
2. Peace of mind as an investor.