The decision to explore and venture into US market 5 years ago is bearing fruit. Once I got used to the volatility, US is really a fun market to be in. And I am not talking about the share prices, but the amazing myriad of growth companies to invest in. From technology to healthcare to retail, the global companies are here. This is also the market where all the lessons from investing legends such as Benjamin Graham, Warren Buffet, Charlie Munger, and Peter Lynch come to life!
It’s another good start to the year for the US market. Year to data, SPY is up by 12% and I am pleased that my portfolio is ahead at 16%. Hence, it’s no surprise that the top 5 gainers are all from the US portfolio.
But surprise surprise, top of the list is not any AI-related company but a cardiovascular medical device company, Shockwave Medical (SWAV). Another that made it to the top 5 and is not technology related is Tractor Supply (TSCO).
For this post, I would like to share bit more on SWAV.
ShockWave Medical
SWAV was an impulsive buy last August after I chanced upon the drop of its price. As mentioned in the post, I bought a bit to motivate me to learn more about it. Its price continued to plummet after that, and I was able to add more in November with another 20% discount.
The jump in price this year came after a better than expected Q4 results and guidance. Coupled with the recent buoyant market, it continues its march northward.
So it’s pure luck that I am already up 35% 56% from my initial investment. I was drafting this post last week but on Tuesday, there was a news report that Johnson & Johnson is in talk to purchase it, which resulted the price to spike up by another 10%. This is not the first time a company wanted to acquire Shockwave. Last year, there was also news that Boston Scientific was exploring the option but it did not materialise.
The interest from such large companies can only mean that Shockwave is doing something right and the acquirers see their growth potential! The following two videos provide a good introduction to the company.
I do not think they will grow like they did from 2019 (IPO) to 2023, where they increased their revenue 17 times! For FY2024, they have projected revenue of US$910-930mil, and that is about 25-27% growth. Growing around 25-30% for many years will also provide a very good return.
Due to the exponential top line growth, they are already earning and free cash flow positive since 2 years ago. Finally, it does feel good to know that they are helping many people as they grow. Who knows, one day I might be using one of their devices.
I do hope that the acquisition will not go through as I think Shockwave has a huge market to grow into. Hence, it has the potential to become a multi-bagger in the future.
SG portfolio
My SG portfolio is lagging ES3 again. Weighted down not only by REITs, but also by iFAST and Micro-Mechanics. The consolation comes from dividends received and the good run of the three banks, especially DBS, which already gives me a double digits return over the past month.
Taking into consideration of headwinds, I would say that the underlying businesses of most of my Singapore counters are performing from good to excellent. I opine that in general, Singapore investors (at least for those investing in local market only) are more cautious and prudent. Hence, they will only take action when there are greater certainties.
As such, if the counters continue to report good numbers in the coming quarters, then my SG portfolio stands a good chance of closing the gap by the end of the year. For REITs, as long as they can keep the occupancy up and inch up the rental, then they will report better numbers in time to come.
iFAST’s price has always been volatile as it does attract both long term investors and short term traders. With the expected strong growth for the next two years, I do think its price will become double digits eventually IF they can continue to execute their plans well. So I am not overly concern with its short term price fluctuation.
As for Micro-Mechanics, while I can attribute to the weaker than expected 1H results (and hence lower dividend) for the price drop in end January, I do not know what causes the recent weaknesses in price. As I mentioned in my previous post on its Q2 results, I do think that there is a good chance of better 2H performance. My current estimation is a 3-5 cents dividends for 2H and together with the interim dividend of 3 cents, that translates to a 4-6% yield based on the current price of $1.42.
Looking forward
It is a good start to the year. I am looking forward for better performance by the various companies for the rest of the year.
It is also the AGM season. Given that I am working part time for the moment, I am unlikely to attend as many AGMs as last year. Thus far, I will be able to attend DBS (this afternoon), UOB and HRnetGroup. Likely to attend a few more if they don’t clash with my work days.
Referral
These are the referral links for the services and platforms I used. If you would like to use any of them, do sign up my referral links.
Trust Bank (code: 1X9DDP1V, additional $10 Fairprice voucher)
Keppel Electric
FSMOne (code: P0003528)
StocksCafe (code: TFI)