Slice and Dice my stock portfolio

The below shows a breakdown of my stock portfolio which includes an ETF – Lyxor Japan 10 (base on their recent stock prices). I think it is obvious that the 4 biggest components in my portfolio is Riverstone Holdings, Super Group Ltd, Vicom Ltd and Golden Agri-Resources Ltd.

In retrospect, sometimes I fall into the value trap syndrome. Eg. Initially I bought the shares when the past earning growth was good and when share prices drop (probably due to a few bad quarters). Subsequently, I will keep buying although earning growth does not improve.

Now, there are different ways to slice a pie.

According to this article, there are 7 categories of stocks. I have classified the shares in my portfolio accordingly as per below. The ETF (Lyxor Japan 10) is not under any classification (so I have kept it as a separate entity).

1. Income Stocks (Vicom)
2. Penny Stocks
3. Speculative Stocks
4. Growth Stocks (Riverstone, ISOTeam)
5. Cyclical Stocks (CapitaLand, Sun Hung Kai, Golden Agri, SIA, Fasternal)
6. Defensive Stocks (SMRT, Colex, Nirvana Asia)
7. Value Stocks (Sarine Tech, Super Group)

This classification is subjective.

Initially I was contemplating whether to classify Vicom as an income stock or defensive stock. At one time, Vicom might even be considered a growth stock (in recent years, growth has slowed).

Vicom’s dividend yield (3.04%) is not very high if you compare to REITS / Utilities/ Telcom stocks , but still relatively high (at least in my portfolio). Example, if we compare to CapitaLand’s dividend yield which is 2.97%, Super Group’s dividend yield which is 2.33% and Sarine Tech’s dividend yield which is 2.71%.

Looking at the pie chart above, I realised that I have quite a large proportion of cyclical stocks and a relatively small portion of growth stocks. Over the years, I do set out to increase the number of growth stocks, but growth is not always consistent. Some companies initially show repeated quarters of strong earning growth (eg. Sarine Technologies and Super Group) but shortly after I bought the shares, the growth falter.

Come to think of it, it is not easy picking consistent high growth stocks at good prices. However, moving forward I will still seek to add to the amount of growth stocks.

 

Then there is another way to classify the stocks. To group them by sectors eg. The Global Industry Classification Standard (GICS) and Industrial Classification Benchmark (ICB) (read here). Let’s use the former (GICS).

I have classified the shares in my portfolio accordingly as per below.

We can check what is the sector the stock is under by referring to Yahoo Finance or Bloomberg Business. Again, the ETF is not under any classification (so I have kept it as a separate entity).

1. Energy
2. Materials
3. Industrials (Colex Holdings Ltd, Sarine Technologies Ltd, ISOTeam Ltd)
4. Consumer Discretionary (Vicom Ltd, Singapore Airlines Ltd, SMRT Corp Ltd, Nirvana Asia Ltd, Fastenal Co)
5. Consumer Staples (Golden Agri-Resources Ltd, Super Group Ltd)
6. Healthcare (Riverstone Holdings Ltd)
7. Financials (CapitaLand Ltd, Sun Hung Kai Properties Ltd)
8. Information Technology
9. Telecommunication Services
10. Utilities

Looking at the above, the biggest component is Consumer Staples followed by Consumer Discretionary and Industrials.

As stated in the article:

“Consumer staples companies include companies that provide consumer products and services that are considered necessities and thus would not be impacted severely in an economic slowdown. This includes industries like food producers and food retail stores. Consumer staples are considered a non-cyclical sector.

Consumer discretionary companies produce goods and services that are not considered necessities, and thus tend to be impacted by economic slowdown. This includes industries like automobile manufacturers, restaurants and hotels. The consumer discretionary sector is considered to be a cyclical sector.”

Healthcare is typically also non-cyclical. So looking at the pie chart above, almost half my portfolio consists of non-cyclical stocks. However, on closer look, apparently Golden Agri, although classified by Bloomberg Business as Consumer Staple, seems to me, to be a cyclical stock. While Nirvana Asia which offers integrated premium death care services, and classified by Bloomberg Business as Consumer Discretionary, seems to me, to be a non-cyclical stock.

Nevertheless, I hope the proportion of non-cyclical stocks in my portfolio will increase in the future. I am not really keen on having a large chunk of my portfolio follow the roller coaster ups and downs of the economy.

I am always looking for that one thing to turn my portfolio into a stellar one.

Shall leave you with this song.