Simply stock trading

Your_Full_Name · 19 July 2026 15:24

Today I screened the MSCI Hong Kong. Five interesting companies (for my investing style), two in buyable valuation territory (AIA and Jardine).

AIA Group Ltd.

AIA Group Ltd. is an investment holding company, which engages in the provision of life insurance. It operates through the following geographical segments: Mainland China, Hong Kong, Thailand, Singapore, Malaysia, Other Markets, and Group Corporate Centre.

Adjusted Operating Earnings:

Forecasting:

Dividend CAGR of 13.7%, on the low end of what I want as a dividend yield (still higher than VXUS, I think, only slightly undervalued but expected to grow earnings at double digits.
Sadly, they pay their dividend only twice a year (in June and in September).

Hong Kong Exchanges & Clearing Ltd.

Hong Kong Exchanges & Clearing Ltd. engages in the operation of stock and futures markets. It operates through the following segments: Cash; Equity and Financial Derivatives, Commodities, Post Trade, and Technology.

Sadly overvalued, but all other metrics look good. I won’t bother pasting them here as the stock is just too expensive from here.

These exchanges and clearing companies are just like having a license to print .

Techtronic Industries Co., Ltd.

Techtronic Industries Co., Ltd. is an investment holding company, which engages in the manufacture and trade of electrical and electronic products. It operates through the Power Equipment, and Floorcare and Cleaning segments.

Sadly overvalued, but all other metrics look good. I won’t bother pasting them here as the stock is just too expensive from here.

HKT Trust & HKT Ltd.

HKT Trust & HKT Ltd. engages in the provision of telecommunications and related services. It operates through the following business segments: Telecommunications Services, Mobile, and Other Businesses.

Looks interesting, but I’d like to see what happens to their dividend in the next year or two when their FCF drops.

A little high on debt as well.

I’ll keep it on the radar.

Jardine Matheson Holdings Ltd.

Jardine Matheson Holdings Ltd. is a diversified Asian-based group with unsurpassed experience in the region. It holds interests directly in Jardine Pacific (100%) and Jardine Motors (100%), while its 85%-held Group holding company, Jardine Strategic, holds interests in Hongkong Land (50%), Dairy Farm (78%), Mandarin Oriental (79%) and Jardine Cycle & Carriage (75%) (JC&C). JC&C in turn has a 50% shareholding in Astra. Jardine Strategic also has a 58% shareholding in Jardine Matheson. The Group companies operate in the fields of motor vehicles and related operations, property investment and development, food retailing, health and beauty, home furnishings, engineering and construction, transport services, restaurants, luxury hotels, financial services, heavy equipment, mining, energy and agribusiness.

Earnings Forecasting:

8½% dividend CAGR, reasonable payout ratio, still (or again) undervalued. 46 consecutive years of dividends paid, no cuts during recessions. Dividend payout twice a year (May and October).
Low debt, stellar A+ credit rating.

Just for narrative kicks I like that they own the Mandaring Oriental group. I already own (via UBS) part of the building – maybe a sandgrain or less – of the Mandarin Oriental Savoy on Zürich Paradeplatz.^$$$ Would be nice to also own part of the business in that building (like the equivalent of one of their pens at the reception or so).

Once my dividend income cross ½ million (15 years out according to plan) I might even spend a couple of nights there …

^$$$ Mandarin Oriental Savoy in Zurich:

Jardine currently looks most attractive to me.

RobBob · 20 July 2026 07:48

Could this be a good time to invest in YUM? Your privacy choices

Phil_MCR · 20 July 2026 08:03

Jardine has a long history. The last time I wanted to buy HK stocks, all the HK specific ETFs had closed due to lack of demand!

cubanpete · 20 July 2026 08:18

YUM looks OK. The first quarter data appears to break one of my rules for the dividend portfolio, but that may be a seasonal thing.

The rule is “EV/FCF <34” and for the first quarter it is like 39. So, when it gets a bit cheaper (like 13%) or makes more cash flow next quarter I would be able to buy it.

And it is from the right sector for this kind of investment. At the moment after the movements of last weeks I am not allowed to buy anymore stocks from the financial or healthcare sectors, because both went over 20% of my total investments in that strategy. I feel like we are seeing some sector movements…

Your_Full_Name · 22 July 2026 08:00

Looks expensive to me. But historically it’s usually expensive.

I guess there’s a brand premium for this. Kinda like McDonald’s.

Your_Full_Name · 22 July 2026 08:04

Aye Oy …

“ A Nikkei investigation found that Alphabet, Microsoft, Amazon, Meta, and Oracle have $1.65 trillion in debt that doesn’t appear on their balance sheets, more than the $1.35 trillion they officially report. These are GPU contracts, data center leases, and joint ventures that don’t count as debt under accounting rules until the facilities go live. Meta’s hidden debt is $420 billion, triple its reported debt. Oracle’s grew 30-fold in four years. All five declined to comment.”

(Source)

cubanpete · 22 July 2026 09:32

FastGraphs shows more overvaluation for YUM than my simple formulas. But I suppose it is because you use earnings and I use OCF and FCF. Also I use a fix number, a binary decision as I need it for my mechanical strategies.

For this kind of stocks I don’t care for earnings. The planned retirement of the CFO often has more influence on the earnings than what really happened in that company. Was it Ben Graham that said “Company reports are lies that contain exactly the amount of truth to be still legal”.

Stock market behaves a bit strange, I think some changes are due. Maybe sector rotation, I don’t know. I wondered that I could keep my oil stocks that long. Yesterday was strange, oil went up and everything else too. That made me 4% on my gambling portfolio, which is a rare performance considering that I hold 37 companies there.

I hold much of the oil food chain. At the moment refineries are the high flyers, the crack spread has never been higher since gasoline exists!

In the tech sector Supermicro starts it’s next attack. Hopefully this time without cheating in the books as when it was at $120. Yesterday 7% and pre-market yet another 17%. I bought in January 22 so I just lean back and watch. My profit taking after each 500% of gain did give me back already multiple times my investment and I still hold a nice position:

cubanpete · 22 July 2026 09:46

There is a whole generation of investors that has not seen real trouble in the stock market. That may end very bad.

I think I said it before and if I repeat it is because it really counts: it is easy to win, everybody knows how to win. But the difference lies in knowing how to lose!

Our brains are not made for losses, we fear dead on any small danger. But in the stock market the chances are zero that you never lose. The point is not to avoid losing but to handle it correctly.

I use completely mechanical systems. But even if you don’t do that as most investors, you should have a mechanical position management. That should tell you exactly how to handle losers. Sell it as soon as your strategy allows and forget about it!

Your_Full_Name · 22 July 2026 09:52

Yum looks slightly more attractive through the lens of FCF (but still overvalued for my taste).

I like their strong ability to generate cash flow. However, I kind of don’t like their below investment grade credit rating. Gemini claims: “Share Buybacks & Dividends: Instead of hoarding cash or paying down debt to earn a “safer” BBB rating, Yum! continuously borrows money to fund massive share repurchases and dividend payouts to reward shareholders.” and cites as a source an S&P Global report.

I came across Yum a couple of times in recent weeks in the WSJ:

Phil_MCR · 22 July 2026 09:55

I also prefer to look at OCF/FCF.

I happened to notice DELL, I had bought Dell back in 2024 on AI but got bored of waiting and sold. More evidence that the stock market transfers money from the impatient to the patient.

I just had to wait 2 years.

cubanpete · 22 July 2026 10:04

I care about rating agencies the same I care about analysts: absolutely nothing. We have seen over and over again that it does not work, at least not better than a simple formula. It may work as a self-fulfilling prophecy because many people listen to analysts and rating agencies.

My measurement of debt affordability is a simple formula, OCF/Debt > 0.1. YUM is at 0.15 for the last year and 0.13 for the last quarter.

Actually I was thinking back in '22 that Michael Dell would buy Supermicro to get the tech. That would probably have doubled the price of SMCI, but then it stayed alone and did multiply with like 25…

Your_Full_Name · 22 July 2026 10:22

Well, it does affect the rates with which the company can borrow.

cubanpete · 22 July 2026 10:30

Yes, self fulfilling prophecy. But then the interest is included in the cash flow, using cash flow neutralizes the rating agencies effect on interest.

I mean there is nothing wrong with picking up much information. But some is more useful than other and except maybe for contrarian trades I have not found an edge using analysts or rating agencies.

Aargauer · 22 July 2026 12:23

I feel like if this info graphic exists, institutional investors are very much aware of it.

Phil_MCR · 22 July 2026 13:12

A post was split to a new topic: Ignoring users

Phil_MCR · 22 July 2026 13:34

@Your_Full_Name

You previously looked at Sika but found it too expensive. Have you noticed it has fallen in price recently?

Your_Full_Name · 22 July 2026 15:38

Throw Goofy a to chew on and he’ll immediately fire up FASTgraphs. Can’t help himself, poor dog …

I like SIKA the company/business …

FCF and OCF fetishists click here to expand

… but still not the price:

If you bought the entire company in whole at its current price and keep to yourself all of the profits it generates (no more dividend payments to anyone since the company and the profits are yours), you’d currently get 4.45% on what you paid. That’s not enough for me.

Things I like about SIKA:

(as mentioned) the business and its ability to grow earnings (and cash flows) at about 10% over a 20 year period in the past and according to analyst expectations also going forward
only moderate cyclicality (in earnings and cash flows)
Kinda surprising for a chemicals business – I guess they have some kind of moat (maybe acid water in their moat surrounding their castle instead of plain water filled with
A- credit rating
14 consecutive years of dividend raises, dividend CAGR of almost 13%
(I asked Gemini about the cut that FASTgraphs shows in 2012 – apparently it’s not a cut but some financial shenanigan thing – dig deeper at your own pleasure)
their name: it always reminds me of SIKU – best die-cast models evaarrrr.

Things I don’t like about it:

the price

Things that make me go meh:

relatively high dividend payout ratio for an I assume relatively capital intensive business:
- 55% of earnings
- 36% of OCF
- 46% of FCF
analysts’ earnings (and OCF/FCF) expectations for the next couple of years have been falling steadily

Footnotes

Earnings forecasting

Earnings revisions by analysts

Analyst scorecard:

Translation: the analysts are not terrible at forecasting earnings. If anything, they are a little optimistic, which can be blamed on the analysts, the company guidance, or both.

cubanpete · 23 July 2026 10:16

Again a new high in the Dollar. I switched my debt from USD to CHF the end of last year in expectation of the new Swiss tax laws. I think next year is the last year that you still can deduct debt interest so I accept losses in Forex for lower interest payments.

Normally I would win some on interest difference and lose some on the exchange rate. This year is different (until now), I save interest and gain with the exchange.

cubanpete · 23 July 2026 10:32

A simple mechanical strategy that I did recommend to a friend after he got an inheritance. Traded since 15dec2021 with 7 digits:

76% SCHD
4% O
20% QQQ

Then re-allocate every 7 months.

CAGR up to today is 13.56%, Nasdaq has 11.44%, SP500 9.68% and the Dow made 7.46% per year in the same period.

Shannon’s demon at its best. 15 minutes of work every 7 months.

Refugee · 23 July 2026 11:24

tsk tsk tsk

Thankfully here there seem to be less neckbearding ACKCHYUALLYs to tell you “why only US”, “didivedns are irreverent”.