Saturday, 26 May 2012

Review of FY 2012 Results: Stamford Land

Stamford Land announced their FY11/12 results last Thursday.
Chairman Ow announced the highest ever 4Q dividend of S$0.04 per share.
My annual dividend income from this co alone will reach five figures!
Based on my buy price of $0.50, it works out to be 8%. A nice bonus while waiting for ultimate value unlocking (my target price $1.00).
But this is likely a one off and i believe my analysis on its recurrent earnings in my previous post still stand.

Stamford Land's key assets on its balance sheet are now as follows:
1) 8 four/five star hotels in Australia, NZ
2) Dynon's Plaza in Perth
3) Unsold apartments from Stamford Residence Auckland & Sydney (the latter accounting for more)
4) Cash of S$87m (of which $35m will be paid as dividends)

Stamford Land's only key liability on its balance sheet now:
1) Bank loans of S$350m

*Stamford Grand Adelaide (picture taken from Stamford Land's website)

Outlook:
1) Potential listing of more Aussie hospitality assets(e.g Ascendas Hospitality REIT) in SGX might trigger a re-rating of Stamford Land
2) Weakening of Aussie dollar actually makes Aussie assets cheaper than 6 months ago. Hotel Buyers might take advantage of this and make an offer.
3) Possible writedowns in Stamford Residence Auckland should more apartments be sold below cost
4) Debts are much lower now. Profit margin might increase, ceteris paribus.
5) No big projects in the works

I will continue to hold out this investment over this year while enjoying the dividend.
That is, unless another more compelling investment that I can understand easily comes along.
Meanwhile I am working hard on discovering other discounted gems to add to/rebalance my portfolio. It is too skewed towards property.
Will update my blog in due course! :-)


Note to my readers:
I'll be starting a new series in my Blog titled: Investment Philosophies.
It is done with the intent to share my knowledge of some fantastic ideas I came across over the years which impacted my investing methods. Most of it came from books I read and courses I attended.
I will strive to give real life examples too to show that some of these good stuff works! :-)

2 comments:

  1. As a value investor I have often found myself highly dependent on thinking in terms of “margin of safety” when it comes to value.

    I think being right more than you are wrong is not what makes a good investor. What makes a good investor is the magnitude of your correctness.

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