Portfolio Update.. and is Value Investing Dead?

Time flies. It has been a whole month since I last posted here. Work has kept me very busy for the past few weeks and I could not squeeze out the time to write.


Portfolio Developments

Powermatic Data (SGX:BCY)

Powermatic Data finally announced their special dividend! PMD has agreed to return $$9,996,602.62, or $0.286 to its shareholders. It is about 11% dividend yield based on current share price of $2.60.

The sum is definitely lower than expected but it is because they were unable to sell their Harrison Road property, which is valued at about $33.7mil versus their purchase price of $19.5mil. In the Q&A of their AGM, PMD has stated that they were trying to monetize their property since Oct 2019.

Business-wise, they are on the cusp of the 5G revolution. Apple went ahead to release their newest Iphone with 5G capabilities. This should imply that the rest of 5G infrastructure should be coming along soon and PMD will stand to benefit with their suite of products. For more information on how their products stand to benefit from 5G, you can refer to the link below.



Other than some labour and serious portable toilet supply shortage, Singapore construction industry is about 80-90% (of projects) in full swing. Orders for BRC products should start coming back as per pre-Covid levels.

In my previous post, I have mentioned about their hidden asset which is the property along Nassim Road.

In this quarter, BRC managed to sell this property for $38.38mil, which frees up cash for their working capital and to reduce debt. Finally some good news for the company.


Union Gas (SGX:IF2)

Personally, I’m surprised by the surge in share price. I suspect that it has got to do with the potential acquisition of various assets from UEC. As the Investingnote community loves to say, something is definitely brewing.

Stake Decreases/ Exits

Maxar Technologies (NYSE:MAXR)

I mentioned Maxar during my last portfolio update. It turned out to be a great play and is one of my multibaggers of the year.

Ever since their new CEO, Dan Jablonsky, took over in Jan 2019, Maxar has improved their balance sheet from “almost bankruptcy” to “stable for now”. This is achieved through a series of debt refinancing and asset divestitures.

Satellite imaging is a recurring revenue, high gross margin, cash generative business. Building satellites is not. So in truth my preference would be for them to complete the Legion Satellite build and then exit the satcom hardware market. If they managed to accomplish this, there would be an immediate upward revaluation of profit.

After gaining almost 200% from my average price, I have reduced my stake in Maxar to take some profits off the table.

Herman Miller (NYSE:MLHR)

Herman Miller’s most recent quarterly financial report has beaten expectations and they have also restored their dividend. Share price rose about 40% as a result. However, after diving into their financials, I realized that not everything is as rosy as it seems.

  1. Office furniture is not likely to recover in the next 12-18 months. The catalysts just aren’t there. Many companies are using a ‘wait and see’ approach before remodeling offices. I don’t think decisions will be made before a vaccine is widely available and administered.
  2. Retail segment was down 19%, but the Work From Home segment specifically was up 126%. This shows how insignificant the WFH segment is for it perform so well, but still leave the segment down almost 20%.
  3. Developing gaming chairs is a good move to enter into the esports scene but I think that the market is overestimating its impact on their financials.

Hence, I took this opportunity to sell my holdings in MLHR.

New Stakes


VIRTU Financial is a market maker that provides liquidity in global equity markets. In essence, what VIRT does is to act as the middle man between buyers and sellers. They profit on the spread of the bid/ask. As market volatility increases, the bid/ask spread increases and market makers like VIRT make more money.

On Sept 24, shares of VIRT are down 15% on lower than expected preliminary results of the July and August earnings. The market’s reaction is understandable as trading income was down 38% quarter on quarter.

However, August volumes were still up about 12% in equity trading and 38% in options trading volume. Volatility looks to be higher yoy however you see it. With the upcoming November US elections, potential 2nd wave of Covid-19 and the economic downturn from the pandemic (not to forget the parabolic rise and potential downfall of tech stocks), it’s hard to believe that volatility will normalise anytime soon.

VIRT’s short term performance relies mainly on then volatility of the markets. In the long run, 1) the increase demand for liquidity, 2) new breed of Robinhood investors and 3) additional class of assets that can be traded electronically, will bring increased trading volume and volatility into the market which will benefit VIRT.

Its current PE Ratio is 6.96 but this is unsustainable as recent topline and bottom line growth is due to the volatility spike in March. However, I feel that August’s trading volume could be “new normal” going forward.

In conclusion, I feel that the current dip in price is a good time to add VIRT into my portfolio. Furthermore, their CEO purchased $2m shares in August at an average price of $22.45.

Intelligent Systems Corporation (NYSE:INS)

INS operates in the fintech industry via its wholly-owned subsidiary – CoreCard Software, Inc. CoreCard is involved in the business of providing tech solutions and processing support to the fintech industry.

CoreCard offers software solutions for managing any type of credit/debit program or records system. Unlike its peers like Fiserv and Global Payments, INS is not subject to the many banking and financial services regulations because they do not underwrite credit themselves. Rather, they must make sure the CoreCard software allows their clients to be compliant.

Despite being a small player ($35m rev in a $7b industry), CoreCard has demonstrated the ability to land large clients. In 2019, Goldman selected CoreCard to provide the processing software behind the Apple Card collaboration.

This year, GS announced the purchase of GM card operations. INS should be a major beneficiary as GS card volumes should double and further integration and services work will be required.

Excluding license fees, INS business grew almost 20% Y/Y. Underlying business is doing extremely well and is going to do even better in the following quarters. Perhaps we will start to see some license income as well.

Of course, this company is not without risks. One of the major risk is its concentration of clients. 60% of their revenue came from the GS credit-card partnership with Apple Inc. As they secure new clients, this concentration risk should go down, but only time will tell.

In conclusion, I like the growth potential of INS and CoreCard. Securing another large client should boost their topline and bottom line.


Transcat is a leader in the calibration and laboratory instrumentation service market. They also distributes test, measurement & control instrumentation equipments.

Those working in labs and other sectors that uses sensitive instrumentation should know that it is a pain in the a** to ensure that your instruments are calibrated periodically. However… you still have to find someone to do it. This also implies the stickiness of Transcat’s customers.

What I like about Transcat is that their service segment is a recurring, high margin business which achieved 11+ years of quarter over quarter growth.

They stated that their proprietary “C3” Caltrak online portal for their customers gives them a competitive advantage over their peers. This portal allows their customers to track their assets and their servicing dates. They can also arrange calibration through this portal.

The calibration services market is highly fragmented but Transcat holds a pretty decent 7% market share, which is the largest among the 3rd party service providers.

I like what the management has done throughout the years. Even during the Covid-19 pandemic, their service revenue has achieved qoq growth. Hence, I decided to invest in this company.

Portfolio Performance

It has been a green quarter for the Moss Piglets. The rise in tech stocks has been offset by the loss in tankers. Tankers comprises about 15% of my portfolio so it has dragged down my overall performance alot.

Is Value Investing Dead?

Value investing, the investment strategy that has made legends out of the likes of Warren Buffett, Charlie Munger, Benjamin Graham and other icons, is being sidestepped. The death has been a slow and painful one for investors who have clung to the principles of picking stocks that appear to be trading for less than their intrinsic or book value.

The last two years have seen growth streak past value like it was standing still as the FAANG and FANGMAN stocks have dominated the returns and the indexes. BofA has pointed out that the last ten years have been even worse for value investors than the dotcom bubble, with the worst returns in history for U.S. value stocks relative to growth.

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From BoFA Research

What Killed Value?

The pandemic twisted the blade in value in value stocks, which just returned one of the weakest quarters in history despite some improvements in economic conditions. If you are looking for a culprit, BofA’s research team points to the lack of inflation and an era of ultra-low interest rates. The 1970s and 80s were characterized by high interest rates, high inflation, and high oil prices. The biggest companies were much more closely tied to the macro economy than they are today.

Today’s growth winners thrive on deflation and low interest rates. Those conditions will be around for quite awhile.

While we are not ready to bury value investing, since many of its principles are important in any market condition, it is fair to say that the traditional model needs some rethinking.


3 thoughts on “Portfolio Update.. and is Value Investing Dead?

  1. Nice update and do not think value investing is dead …. Just needed to tweak our approach.

    By the way, have you disposed of both SGX P15 and D20? Interested in your view since I am both vested and accumulating them in this downturn.


    1. I have sold my Pacific Century shares after that huge dividend payout, but still holding onto Straits Trading. Feel that Straits’s move into higher risk/reward assets instead of stable low yielding assets could mean better dividends and help to rerate the share price soon. Tin mining is a drag and I really wish they could sell it. As for Pacific Century, the next catalyst could be the digital banking (im not really up to date with this company tho).

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