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Re-investing Dividend

With the dividend received in August, I have added more Valuetronics at $0.74, bringing my average price to $0.595. With the growth of ICE segment and expected return to normalcy of CE numbers, it is likely the company will continue to declare an interim dividend in the coming quarter, especially with the strong cash flow reported in the first half. Assuming the same dividend of HK$0.27 (HK$0.07 + HK$0.20) for this financial year, it will provide a yield of about 6.3% at my recent purchased price.

With the remaining cash, I took a small stake of ISEC at $0.295. I have exited from the counter last November at $0.315 for a small profit of 2.9% (including dividend). Since then, the group has reported good results with growing revenue, net profit, cashflow and dividend. Better results yet offered at a slightly cheaper price, so decided to take a punt on its continual growth going forward.

Accumulating STI ETF with CPF

As the market continues to weaken for the past month, the cheap Singapore Market is cheaper now. Based on a recent article on Motley Fool Singapore, the long-term (1973 – 2010) average PE of STI is about 16.9. At the time of writing, the PE of STI ETF (ES3) is only 10.9! So decided to add more yesterday at $3.16, bringing my average price to $2.99.

Fine tuning US Portfolio

Decided to sell some JD at US$29.44 and booked a loss of 29% after the latest allegation of its CEO’s sexual misconduct.  This followed an earlier news where a sexual assault case involved a person who had been a guest at a party hosted Liu at his home in Sydney 2015.  While he could be innocent in both cases, I am uncomfortable with the association and decided to give this company a miss. Fortunately the position isn’t too big and the 30% loss in position only dented the portfolio by 0.5%.

With the cash from above sale, I decided to accumulate the following counters which I am confident of its growth in the next few years.

Arista Networks
This has been my favourite counter recently, primarily due to its strong management team. Chairman Andy Bechtolsheim (founder), CEO Jayshree Ullal and Chief Technology Officer Kenneth Duda have led the group to disrupt the networking industry and has grown the company at tremendous pace (40% to 50%) over the past 5 years.

The latest purchase was at US$292 which brings my average price to US$268. Again, I am extremely bad with timing. The very next day after I bought, Morgan Stanley downgraded the company and for the next few sessions, its price dropped to my average purchase price of US$268! Sigh, but oh well I am looking at much bigger gain in years to come.

Booking Holdings
Added another lot at US$1906, bringing my average price to US$1987. A leader in the industry and it has continued to grown its free cash flow (~20%) over the past 5 years.

Ulta Beauty
Added more Ulta at US$272, bringing my average price to US$232. The share price has spiked after the latest quarter’s earning call. However, I still think it’s still good value at current price as things are shaping up nicely with the various strategies that the management has rolled out over the past two years.

With the remaining cash, decided to initiate a very small position (0.5% of portfolio) in VISA at US$145.37. I had owned Mastercard for a short while and did not re-acquire it after switching to FSMOne. Since then, Mastercard has continued to do well in its business and share price has appreciated much higher. I was contemplating between the two and decided on VISA as (1) I have more VISA than Mastercard in my wallet, (2) VISA (PE 35) is trading at a relative lower valuation than Mastercard (PE 47) now, and (3) most importantly I like VISA’s net margin of about 40% and its cash generating ability.