Buy on dip, Buy and Hold - Investment Strategy for 2010

2009 has been a great year to say the least. All the markets have rebounded sharply and I am pleased that my portfolio has broken even after the devastation caused by the financial crisis.

As we leave the troubled times behind, it has been said many times that the easy money had been made, now the route to wealth creation will rely on a strong stock selection. Many analysts have had their versions on how 2010 will pan out. Some say that this is the beginning of the multi-year bull run, others qouted that the road to recovery will be bumpy. The big question that everyone have in mind will be : When will interest rate be raised to curb inflation and speculation?

As a value investors, one must hold true to its fundamental principles. Ignore short term volatility and focus on the fundamentals of the companies.

Cut things shorts, my stock selection for this year are:

1. Adampak - Manufacturers of die-cut, labels
2. Boustead - Multi industry focusing mainly on energy-related engineering and geospatial and real estate solutions
3. Midas - Infrastructure play dealing with carriage construction
4. A-Power Generation Power - Wind Turbine Manufacturer

Reason for my choice

1. Adampak and Boustead remains my value play stocks. Low P/B, high ROE and consistent dividends. 40% of my capital are invested in them.

2. Midas and APWR are my selections for growth stock. China's growth may not be as high as before but it is still growing and as long as rail way gets constructed, there will be business for Midas. APWR is a green alternative energy play. $450 billion has been committed for the wind energy over the next 5 years. They have recently won contract with GE to build wind farms in Texas and recently concluded a license agreement to have exclusive rights to build a particular model of the wind turbine.

Current game plan right now is to build up hoards of cash in anticipation any possible correction that will present opportunity for entry.

Well, this is it. Let's see how this year will pan out.

Featured Company --- Boustead

One of the feature of my journal is to look at company which I believe is a value investment. To kick off the series, I will just use my simple stock screener to screen the company before looking deeper into it. For a start, the company that I will be featuring today is BOUSTEAD.

Part 1 of this feature will look at the stock screening criteria that I used and a brief history of the company together with some notable financial highlights.

As you can see, based on all the criteria that I have listed, BOUSTEAD financial ratio fits all of them aptly. Moving on, lets see what constitute the key business groups for BOUSTEAD.

85% of business comes from Engineering Service and they comprises of:
a. Oil & Gas engineering
b. Petrochemical engineering
c. Solid waste energy recovery
d. Water & wastewater engineering
e. Industrial real estate solutions

14% of business comes from Geo-Spatial Services

1% of business comes from Investment (Non-core)

What makes this company stands out from the rest?

1. This is the second oldest company in Singapore. Founded in 1828, it has gone through many economic booms and busts. Its ability to survive is testament to the company key business acumen throughout its history.

2. Boustead presence spans 71 countries globally and this makes it less susceptible to any downturn in any one region.

3. Based on Forbes' data over a three year period, the financial statistics speak volume:
- Sales growth: 24%
- EPS growth: 34%
- ROE: 26%
- 2008 represents 6th record year of revenues

This is just to whet your appetite. The second feature on this company will look at a simple analysis of their P&L, Balance Sheet and Cash Flow for the financial ending 2008. Stay tuned.