Sunday, 16 March 2014

Stock Watch: Lum Chang

Lum Chang was started in the 1940s, a leading construction company listed in SGX. I am writing about them today because I read (in Sunday Times) of a good deed that they have done, helping a family to repair their HDB which was burnt badly. In view of slow down in the property market and tight labour, it says alot of a company to step out during this time and return something back to the society. Here is the news from Sunday Times.

The first time I noticed this company is when they announced that they had invested in a London property - Old Court House along Kensington High Street for 40.19 million pound. And the management said this is to prepare for a possible slowdown in construction and that this investment will provide them a constant income. I thought this management is forward looking and prepare for themselves. During this time, most of the property counters have corrected due to the cooling measures by the government, Lum Chang was affected as well.
So why did I invest in this counter then:
  1. Most financial experts told us to avoid property stocks (isn't it a good time to buy when no one is looking and wait - Patience is the key)
  2. Good discount to the NAV
  3. About 6% dividend (better than most of Reits and definitely bank's interest)
  4. Tapping on their expertise and get exposure to UK property market :) 
And I noticed that in the recent months despite all the bad news that had been floating up every now and then, this counter had not reacted negatively.
Am I right about this one? No one knows, but if I am badly wrong I will just cut loss and move on. But for now, it is comforting to know that the company which you have invested, is one with a good heart.

Disclosure - I am long.

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