I'm
sure that many Tambun Indah's investors are wondering what the hell is
going on with its stock price, which has dived from RM2.60 to RM1.56 in
less than 3 months time.
It is a massive 40% drop from its peak.
Similar
to almost all property stocks, it is likely due to guarded outlook for
property sector next year, coincides with overall bearish market.
Then
why does Tambun drop more than other property stocks? I think may be
it's because the more it went up, the more it will go down.
My paper gain for Tambun has gone down from 240% at peak to 100% at the moment.
Am I a fool for still holding on to Tambun?
Rain Tree Park 1
Since
last year, I have decided to adopt "Cold Eye's" philosophy in stock
market investment, in which I will treat buying shares in a company like
doing the business with the company.
As
long as the company can keep on generating consistent profit or even
better, growth, and giving good & consistent dividends, I will keep
its shares for longer term unless it is way too overvalued.
With
expected softer property market in 2015, Tambun might not be able to
sustain its outstanding growth shown in the last 2 years.
However, with ample cash on hand, it is able to acquire new development land.
In
a cautious property market when most people will only buy property for
own occupation, buyers will certainly concentrate more on affordability
& landed property, apart from strategic location.
Tambun will only work on its Pearl City for new launches next year, until it can find another piece(s) of land.
Recently called-off land deal is also within Pearl City which is not expected to be developed in the next 2-3 years.
Tambun still has over 450 acres of undeveloped land left in Pearl City with approximately RM2.6bil GDV which can last for at least 4-5 years.
Tambun still has over 450 acres of undeveloped land left in Pearl City with approximately RM2.6bil GDV which can last for at least 4-5 years.
For
me it is better if Tambun can acquire new land elsewhere as
diversification. So the termination of land deal was not totally
negative for me.
Closed at RM1.56 today, Tambun is trading at forward FY14 PE of 6.5x, with an estimated dividend yield of 6%.
I
think Tambun is currently trading at a very attractive price but bear
in mind that anything can happen in a bear market. It may still go
lower.
I
have relegated Tambun from my core portfolio in Sep14. However, my plan
was just half-executed as I still haven't reduce its shares to my
desired level to hold for long term.
This
is due to greed as I was waiting to sell at higher share price. My
latest disposal was done at its peak of RM2.60. So naturally I was
waiting to dispose again above that level.
When the share price started to drop from RM2.40 in early Nov14, I was still waiting for a rebound.
Now we know that the rebound does not actually happen for the past one and a half month.
This shows that I'm still an inexperience investor. I should not be too greedy.
Anyway, my investment strategy still remain the same.
I think I should not dispose at current level, as it should be a level to collect.
I think I should not dispose at current level, as it should be a level to collect.
What do you think?
http://bursadummy.blogspot.com
