As accord to Investment Portfolio Restructuring, SingPost was divested at S$0.65/share. With a holding price of S$1.0093/share, this gave a realized capital loss of -36.17%. However, the dividend collected along the years was +55.01%, this managed to offset the capital loss and gave a nett gain of +18.84%. SingPost was invested in 2008 and the divestment gave an annualized return of -3.30% and +1.3.4% without and with dividend respectively.
The reason for divestment is pure simple. The good days were over when it expanded too aggressively and now in its "recovery" and "reform" phase to put all those wrongs right. How long will that that, nobody know and even if it manages to fully reform, will it regain its glory days still an uncertain. Put it bluntly, future is uncertain and unknown with risks being difficult to be calculated.
The divestment outcome doesn't look bright as it suffered a capital loss of -36.17%. The brighter side was the dividend collected for the past 13 years managed to offset that loss and recorded a nett gain. This again proves the important of dividend, it might not give the investment the best return but it provides a cushion for the downside.
So, is investing into SingPost a bad choice ? Well if purely looking at the investment outcome believe many will say indeed it is. However, there is more story to it. Apart from investing into SingPost in 2008, this stock is also one of my main trading stock for like 3 to 4 years. During these periods, SingPost was like an "ATM" to me, almost everyday can give me some very good trading profit. In fact, during these periods the profit that I have gotten from SingPost was used to fund the investment of stocks like CapitaMall Trust, SIA, Kep Corp, SembMar, MapletreeInd Trust and CapMallAsia bond. If putting all these in, is SingPost still a bad stock for me ?
The divestment resulted in a capital loss is a battle loss but the nett gain recorded plus all those trading profits is a war that was won.
