Accordia Golf Trust - The Final Write Up
I have previously written about Accordia Golf Trust here and here.
Today, Accordia Golf Trust just announced the dividend for the second half of the year - 4.31 cents per share. Although it is slightly lower than previous dividend during the similar period - 5.71 cents per share, but it is still significant.
Looking at the financials, the golf trust actually did better this year. Revenue increase and Net Profit increase.
Even the future looks good as quoted from the financials;
"All of AGT’s golf courses are located in Japan and due to the gradual recovery of the Japanese economy, the number of golf plays has been stable, especially among those golf courses located in the metropolitan areas. This trend is expected to be stable. Despite the downtrend in Japan’s population size, the number of plays per golfer has been increasing. This is due to 1) decline of cost per play as compared to previous years, 2) increase in plays by seniors who tend to play more frequently, and 3) increasing population of large cities due to urbanization in Japan..."
However I am still skeptical after holding this stock for more than 1.5 years due to the following:
1. Accordia Golf Trust is heavily held by Mitsubishi UFJ Financial Group, Inc. and Morgan Stanley Capital Management, LLC. These funds regularly buy and sells the golf trust, creating volatility. Just look through the SGX announcements and you see increment and disposal constantly. If your heart is unable to understand these fluctuations, you will make rash decisions. I am an example.
2. Golf as a sports is affected by the weather. This is seem in the last Dec financials and decreased the dividend significantly. This also may have cause the price to fall drastically at that time.
3. Japan is prone to earthquake. What happens if it actually affected most of the golf course? Revenue will be greatly affected.
4. The market is currently in a downtrend. The economy is in a downtrend. IMO, Golf is a luxury sports. I believe less and less people will play this sport if the economy continues to stay in trend.
5. When I first bought Accordia Golf Trust, it is due to a recommendation. In relation to point 1, this resulted in me getting jittery when the price went down significantly. I should have stay by my investment methods or do my own analysis before buying.
In short, it is not my style to sell or reject a stock solely basing on non-financial reasons. However, I am already sitting on top of a huge paper loss and due to the above reasons, I am prepared to sell all of my holdings if it hits my target price of above 70 cents (even at 70 cents, I am still making losses). If it does not hit my target price and I am not desperate to buy new stocks, I may just continue to hold it much longer.
Please do your own analysis if you intend to sell. Don't blindly follow me. Don't be like me.
Today, Accordia Golf Trust just announced the dividend for the second half of the year - 4.31 cents per share. Although it is slightly lower than previous dividend during the similar period - 5.71 cents per share, but it is still significant.
Looking at the financials, the golf trust actually did better this year. Revenue increase and Net Profit increase.
Even the future looks good as quoted from the financials;
"All of AGT’s golf courses are located in Japan and due to the gradual recovery of the Japanese economy, the number of golf plays has been stable, especially among those golf courses located in the metropolitan areas. This trend is expected to be stable. Despite the downtrend in Japan’s population size, the number of plays per golfer has been increasing. This is due to 1) decline of cost per play as compared to previous years, 2) increase in plays by seniors who tend to play more frequently, and 3) increasing population of large cities due to urbanization in Japan..."
Showing my white flag
However I am still skeptical after holding this stock for more than 1.5 years due to the following:
1. Accordia Golf Trust is heavily held by Mitsubishi UFJ Financial Group, Inc. and Morgan Stanley Capital Management, LLC. These funds regularly buy and sells the golf trust, creating volatility. Just look through the SGX announcements and you see increment and disposal constantly. If your heart is unable to understand these fluctuations, you will make rash decisions. I am an example.
2. Golf as a sports is affected by the weather. This is seem in the last Dec financials and decreased the dividend significantly. This also may have cause the price to fall drastically at that time.
3. Japan is prone to earthquake. What happens if it actually affected most of the golf course? Revenue will be greatly affected.
4. The market is currently in a downtrend. The economy is in a downtrend. IMO, Golf is a luxury sports. I believe less and less people will play this sport if the economy continues to stay in trend.
5. When I first bought Accordia Golf Trust, it is due to a recommendation. In relation to point 1, this resulted in me getting jittery when the price went down significantly. I should have stay by my investment methods or do my own analysis before buying.
In short, it is not my style to sell or reject a stock solely basing on non-financial reasons. However, I am already sitting on top of a huge paper loss and due to the above reasons, I am prepared to sell all of my holdings if it hits my target price of above 70 cents (even at 70 cents, I am still making losses). If it does not hit my target price and I am not desperate to buy new stocks, I may just continue to hold it much longer.
Please do your own analysis if you intend to sell. Don't blindly follow me. Don't be like me.
Hi,
ReplyDeleteThe full year dividend is not 4.31. It's 6.63c.
Regards,
FFE
Hi FFE,
DeleteOps, sorry that's my mistake.
I am trying to say the second half of the year's dividend. Not the full year.
Will amend the wordings.
Thank you.
Regards,
TUB
Well. The previous second half was an 8 month period and had non recurring cash flow thus its higher than this current H2.
ReplyDeleteThus not a good comparison
Hi FFE,
DeleteThanks for the additional pointers. Yup, I did read that it was actually 8 month period and I guess I should be clearer in the writing.
But I wasn't trying to bring across that the dividend was lower and that why is it is worse off.
In fact, I felt the dividend was good. Just that I had other concerns.
Hope this explains.
Cheers,
TUB
Hi T.U.B Investing,
ReplyDeleteI just added Accordia into my portfolio recently at 62 cents. Agreed with weather and earthquake prone are not controllable factors but I foresee that the upcoming Olympic 2020 will bring some positive impact to the golf sport.
Hi Richard,
DeleteYup. I did read up on Olympic 2020 and I do feel it will definitely bring some positivity into the financials and dividend then.
Although my post doesn't state properly, I do feel that this is a good stock to hold.
But just as my post stated, there are a few things here that scares me - and its not the business or financials.
In addition, I am not a dividend-yielding stockholder. I prefer to look for capital gain. So overall, maybe this stock is not for me.
But if you are in for the long long long time, please keep hold of it.
Hope this explains.
Regards,
TUB