My Core Portfolio

Aim to review my stock portfolio half yearly and my rationale for holding them.
I will just highlight my top 5 significant holdings especially since they make up the main proportion of my investment portfolio (the core), without being distracted by some of my other scattered small number of lots in other stocks, preference shares, bonds and precious metals which serves more as diversification and/or "tikam tikam".

	Lots	Cost Price	Market Price	Paper Gain/Loss
FCL	6	1.5	1.525	1.67%
Naratel	15	0.67	0.73	8.96%
CM Pacific	12	0.88	0.905	2.84%
Saizen	14	0.865	0.885	2.31%
FCT	7	1.64	1.735	5.79%

1. Fraser Centerpoint Limited is my latest addition.  Am of the opinion that this one owns blue chip assets like capital land and Keppel land but more undervalued at current prices.  Also am hopeful that they will be giving out a generous dividend, as alluded to in their annual report.  We shall see...
2. Naratel I like its stable earnings and bought it for dividends, am delighted of its recent 6 cents dividends which is very generous.  Gives me a close to 9% yield. Am however unsure if this level of dividends is sustainable.
3. CM Pacific also like it for its stable earnings and brought it for dividends too.  Also think that it is undervalued, probably due to its status as a S chip.  Was delighted with the 7 cents dividends giving me a close to 8% yield.  But also need to try to understand if this is sustainable as well.
4. Saizen REIT is an undervalued REIT owning Japanese residential units, giving stable returns of 7.5% yield. 
5. Fraser Centrepoint trust is giving me close to 7% yield.  I like the stable earnings from its two main contributing assets, namely Northpoint and Causeway Point.

I realised that I used the words stable earnings and dividends a lot haha. I guess it reveals the kind of businesses that I look for to invest in, those with stable earnings and generous dividends.

I am getting approximately a good 7-8% dividend yield on this core portfolio.

China Merchant Pacific

Added a little today at SGD0.90.

I am investing in the economic moat of toll roads in China. 
The company buy toll roads and operates them.  Warren Buffet love businesses that exhibit "toll bridge behaviour", as they offer only one option for local consumers, use it or you don't cross the bridge at all...
So how about investing in the "real thing", the "toll road itself"?

The PE ratio is about 7, and dividend yield more than 6%. 
I think it is undervalued and intrinsic value should be more than SGD1.
I am also anticipating dividend growth from this company which is continuing to grow.
The company has announced that they are aiming for a listing in HK, and to qualify they will need to continue to acquire more toll roads. 

The gearing is high, but mitigating factor is the economic moat of this type of business which provide the company with steady and consistent cash flow.

One risk I suppose is that this is a S-chip, I suppose it being a S-chip has also something to do with it being undervalued...

Saizen REIT

Added a little at SGD0.89.

On Economic Moat:
This is a Residential REIT owning apartments in Japan and renting them out.
In a country like Japan, there is a sizable population who rent (as opposed to Singapore who are mostly owners), so while nothing exciting, I am expecting this type of REIT to remain stable over the long term.

On Margin of Safety:
Its NAV is currently estimated at about 1.20, that is more than 20% margin of safety.  I think Saizen REIT is one of the more undervalued REITs in SGX. Not sure why, but my wild guess is that it is just too boring? (think boring apartments in far faraway Japan... yawn...).

Dividend: Current dividend yield more than 7% which meets my expectations.

Debt: Gearing is 30% plus which is not low.  With the impending rise in interest rate due to QE tapering (which I suppose is a question of when not if), I need to be assured that the interest rate hike will not "kill" this REIT.  What I understand is that most of its loans are fixed at relatively low rates (I think Japan is trying to keep its interest rates low), as well as a recent refinancing of their loans extended their loan maturity commitments to 2018 (from previously 2015). Sounds like the management has got the situation under control.

Additional risk: Country risk and especially FX risk with the JPY possibly seeing further decline with so much "printing of money" under the new Japanese Prime Minister.

Fraser Centrepoint Ltd

Added little more at price SGD1.42.

Previously I bought a little at 1.6.  During the recent market correction, many stocks fell and FCL is not spared.  At 1.42, the margin of safety is more than 30%.  There are some other stocks that I am monitoring that are also near my target prices.  But I have only "one bullet" to spend and after some deliberation, decided in the end to take this opportunity to add to FCL.  Among the shortlisted stocks, this one at current prices look most attractive.  Super subjective of course.