Sector Rotation

Some charts that can help time an entry to a stock. Do note that the stock market always precedes the economic cycle.

http://www.sectormarketwatch.com/principles.htm

http://stockmarketspore.blogspot.sg

http://www.sectormarketwatch.com/cyclicals.htm



Piotroski Score

Score of 8-9 is considered good. Two or less is weak stock.


  • Net income
    • Score 1 if last year net income is positive
  • Operating cash flow
    • Score 1 if last year cash flow is positive
  • Return on assets
    • Score 1 if last year ROA exceeds prior-year ROA
  • Quality of earnings
    • Score 1 if last year operating cash flow exceeds net income
  • Long-term debt versus assets
    • Score 1 if ratio of long-term debt to assets is down from the year-ago value
    • If LTD is zero but assets are increasing, score 1 anyway
  • Current ratio
    • Score 1 if CR has increased from the prior year
  • Shares outstanding
    • Score 1 if the number of shares outstanding is no greater than the year-ago figure
  • Gross margin
    • Score 1 if full-year GM exceeds the prior-year GM
  • Asset turnover
    • Score 1 if percentage increase in sales exceeds the percentage increase in total assets

REIT evaluation

  • Gearing of 30% - 35%
  • Yield 5% - 8%
  • Increasing DPU over the years
  • Stock price below or near NAV
  • Type (retail, office/ commercial, industrial/ logistics, healthcare)
  • Geographical exposure (China, Singapore, Indonesia, Malaysia, Australia, etc)

Valuation methods

  • Heavily geared companies
    • Use EV/ EBITDA
  • Companies with negative cash conversion cycle
    • Use FCF yield
  • Property companies
    • Use NAV or RNAV
  • Asset-heavy companies
    • Use P/B
  • Firms with highly variable earnings
    • Use P/S


These methods are not entirely mine, some are taken from other blogs and comments (link: http://singaporeanstocksinvestor.blogspot.sg/2013/09/tea-with-solace-valuation-per-and-value_12.html)
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