The market has been down about 20% or so from its peak in 2020, which means that there are plenty of good deals lying around for you to pick up! Therefore, I’ll be sharing 3 different ways I’d invest $10,000 in the stock market right now.
100% Growth Portfolio
| Stock Name | Cost Per Share | Dividend Yield (FY2019) | # Of Shares | Cost (SGD$) | % Of Portfolio |
| AEM Holdings Ltd | 1.99 | 1.96% | 1600 | 3184 | 31.94% |
| Dairy Farm International Holdings | USD$ 4.88 | 4.30% | 300 | ~2083.27 | 20.90% |
| The Hour Glass Ltd | 0.64 | 4.69% | 3000 | 1920 | 19.26% |
| Delfi Ltd | 0.715 | 3.96% | 2000 | 1430 | 14.35% |
| Silverlake Axis Ltd | 0.27 | 6.67% | 5000 | 1350 | 13.55% |
| Total | – | ~3.90% | – | 9967.27 | 100% |
Rationale behind each pick :
AEM Holdings provide handling and test solutions to the most advanced manufacturers in the world. They deliver many products in the 5G economy including microprocessors, high speed communications, IOT devices, and solar cells. They are supposedly the sole supplier of test handlers for Intel, who is also their biggest client. I’m pretty bullish on the semiconductor industry and its expected recovery coming into FY20-FY21, therefore AEM has been given a higher portfolio allocation.
Dairy Farm owns various businesses, in many countries. They not only own supermarket chains like Cold Storage and Giant, but they also own convenience stores (e.g 7-Eleven) and beauty shops (e.g Guardian). When looking at their financials, we can see that they have a huge potential to grow with the expansion of its associates and other business ventures. Therefore, Dairy Farm at its current valuation seems to be a great growth stock pick right now with its huge potential upside !
The Hour Glass Ltd is one of the world’s leading specialty luxury watch retail groups with an established presence of 40 boutiques in 11 key cities in the Asia Pacific region. So most probably you would’ve seen its shops and stores around town or in other countries, at the airports, etc. I like the great value we are getting at its current price, with its P/B ratio standing around 0.6. When the Covid-19 situation calms down and shops open back up again, I can see that The Hour Glass will be back on track to grow !
Delfi Ltd markets and distributes its Own Brand of chocolate confectionery products in its core markets of Indonesia, Philippines, Singapore and Malaysia. With the feds printing so much money, inflation is bound to rise as a result. When inflation sets in, the food industry will be one of the first industries to benefit since revenues will be going up ! So imagine if they increased the cost of their products by 5%, they’d be earning an extra US$ 23.58m, which is insane !
Silverlake Axis Ltd provides technology and related services to the Banking, Insurance, Payments, Retail and Logistics industries. In addition, I covered it in the linked article so check it out there for an in-depth analysis!
100% Dividend Growth Portfolio
| Stock Name | Cost Per Share | Dividend Yield (FY2019) | # Of Shares | Cost | % Of Portfolio |
| SATS | 3.01 | 6.31% | 1000 | 3010 | 28.15% |
| Ascendas-iTrust | 1.21 | 8.43% | 2000 | 2420 | 22.63% |
| Development Bank of Singapore (DBS) | 19.50 | 6.15% | 100 | 1950 | 18.24% |
| Oversea-Chinese Banking Corporation (OCBC) | 8.90 | 5.39% | 200 | 1780 | 16.65% |
| VICOM | 7.66 | 5.99% (inc. Special Dividends) | 200 | 1532 | 14.33% |
| Total | – | ~6.56% | – | 10692 | 100% |
Rationale behind each pick :
Development Bank of Singapore (DBS) is one of the 3 banks in Singapore. With a strong history of growing their dividends, it is a must buy in this portfolio! Also, with their payout ratios maintained ~50%, they have the financial strength to sustain and maintain their current dividends.
SATS is the leading provider of gateway services and food solutions in the region. They caters to the needs of the aviation sector and a host of other businesses in hospitality, food, healthcare, freight and logistics industries besides governments. I covered it in the linked article so check it out there !
Ascendas-iTrust is focused on capitalizing on the fast growing IT and logistics industries in India. AIT’s policy is to distribute at least 90% of its income available for distribution. Meanwhile the retained 10% of its income available for distribution is used to provide greater flexibility in growing the Trust. I covered it in the linked article so check it out there !
VICOM is Singapore’s leading provider in inspection and technical testing services. Holding more than 75% market share of the vehicle inspection business in Singapore, they have a strong economic MOAT. Not to mention, with their healthy cash flow, they can not only give out high amounts of dividends but increase it as well year on year !
Oversea-Chinese Banking Corporation (OCBC) is also one of the 3 banks in Singapore. Their dividend growth is the most consistent out of the 3 banks, increasing it every year, from a $0.11/share dividend payout, to a whopping $0.48/share dividend payout. That is an amazing 336.36% growth for the last 14 years, averaging 28.03% increase per year. The best part is that they are only paying out less than 50% of their earnings. This means that they have plenty of room to increase their dividends even if their earnings remain the same.
Hybrid Best of Both Worlds Portfolio
| Stock Name | Cost Per Share | Dividend Yield (FY2019) | # Of Shares | Cost | % Of Portfolio |
| Ascendas-iTrust | 1.21 | 8.43% | 2000 | 2420 | 23.30% |
| SATS | 3.01 | 6.31% | 800 | 2408 | 23.18% |
| Development Bank of Singapore (DBS) | 19.5 | 6.15% | 100 | 1950 | 18.77% |
| CDL Hospitality Trust | 0.925 | 9.75% | 2000 | 1850 | 17.81% |
| Ascott Trust | 0.88 | 8.65% | 2000 | 1760 | 16.94% |
| Total | – | ~7.78% | – | 10388 | 100% |
DBS, SATS and Ascendas-iTrust has been chosen for the same reasons as mentioned above.
CDL Hospitality Trust
CDL Hospitality Trust is one of Asia’s leading hospitality trusts, owning 19 properties with a total of 5,089 hotel rooms, their total assets are valued at S$2.85 billion. The main reason for choosing CDL Hospitality is due to the fact that it is severely undervalued at its current price. Currently, its P/B ratio stands around ~0.61x and its yield is around 9.75%. I see that there is a huge upside once the COVID-19 situation dies down. The best part is while waiting for it to go up, you get paid an attractive 10% yield.
Ascott Trust
Ascott Trust mainly focuses on residential real estate properties, which are used as serviced residences, rental housing properties and other hospitality assets in any country in the world.
I personally like Ascott Trust’s properties. For me, when investing in a hospitality REIT/Trust, you yourself have to like their assets, be it hotels or serviced apartments. If you don’t even like them, how can you expect visitors and guests to like the place and stay there?
Also, another reason is because it is also very undervalued after being beaten down due to negative market sentiment towards hospitality sector. At its current price, its P/B ratio stands around ~0.71x and its yield is around 8.65%.
Rationale behind 3 Hospitality picks
When the COVID-19 situation dies down, the hospitality sector will be the first to recover. This is why I included 3 hospitality picks in this portfolio, to take full advantage of its recovery when the COVID-19 situation dies down. I hope this article can give you some ideas on what you should put in your portfolio based on your investment strategy or game plan moving forward!
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