Friday, 12 December 2014

Tambun: Disaster Or Opportunity?

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.

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.

What do you think?

6 comments:

  1. A lot of good companies went up a lot for the past 2 years, during the current drop, the share price just went back to the fair value but still not undervalued yet. I think have to wait for the dust to settle first, hold some cash & be patient. Good luck everyone :)

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    Replies
    1. Yes, I need to learn to be patient...

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  2. I hv 10% of prop stocks in my portfolio, tambun has 5%.

    No matter how is the stock price or bearish prospect, we hv to accept the calculated risk.

    I adopt a diversified portfolio across multiple industries, thus i think i hv minimized my risk.

    No point to sell it now as it means buy high sell low, n we still haven't seen prop price collapses.

    Many young men r still hungry for new house, as now our avg nation age is at 27 years old, which is the most energetic age, they can work as hard as possible to realize their first dream house.

    And now we can see many directors and companies buyback their comapanies shares crazily like ynhprop, hohup, sunsuria, matrix and etc

    So, who is right who is wrong?

    I dunno but my quota of prop is 10%, that's it

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    Replies
    1. Appreciate your input. You have good discipline :)

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  3. Today the price is1.45. Do you think its undervalue??

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    Replies
    1. I think so, but no one really knows.

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