Wednesday, March 4, 2009

Re-positioning my holdings

There has been some major changes to my portfolio over the last few months. My present portfolio look like this:

Pfood Fujian Zhenyun (FZ) Sihuan China Ziano First Reit Man Wah

I have been quite active in the past 2 months:

Sold Karin, Sinotech, China Fish, Changtian. 

Bought China Sky due to cash per share higher than share price and possibly low cash outflow in the near future. Sold China Sky after its abysmal fall in cash. [Reason for buying no longer valid]

Added more of China Ziano. Initiated First Reit, Man Wah, PFood. 

I have re-positioned my investing philosophy. That is, to buy and hold high quality businesses with little or no debt. Quality means less cyclical businesses. Little debt means that the business is more likely to survive this recession. 

Karin, Sinotech and Changtian do not meet the quality aspect. China Fish debt levels are too high for my comfort, and it may be affected by the possible risk of falling fish prices. Hence, they are sold. 

FZ may or may not meet the quality aspet, but its cash per share is too alluring for me. And, it seems to be in a positive sector, as pipes are needed in water treatment plants and Sichuan re-building.

Man Wah and Pfood are still showing rising profits. I am hoping that their profit will not fall too much in 2009. 

Lastly, I have bought many First Reit shares (relative to my portfolio). I have looked at a number of S-reits, before making my purchase. Reasons are simple. Non-cyclical business, low debt to asset ratio (15.6%) compared to other Reit, insider purchases, high yield (17%) relative to the risk. Yes, there is re-financing risk, since it has to refinance all its debt by Q2 09. But I guess the re-financing risk is manageable, since Cambridge Reit (has higher gearing) is able to re-finance.  Another bad is limited growth prospect. 

One last reason. First Reit is under the radar. I have not seen any analyst report on this stock since Oct 08. 

Note: Above are just for my record purpose. My thoughts may be wrong. So far, roughly 8 out of 10, I will lose money when I follow other blogger's/forumer's stocks e.g. China Sky