We managed to catch Wilson from Stockflock.co for an interview. Here’s what he has to say!
What is Stockflock all about?
Stockflock is about helping people invest better.
If your full-time job is to invest, more information is better. But most retail investors do not have the luxury of spending days doing research. Stockflock comes in to help simplify information so you can focus on the crucial things.
We provide comparison charts and tools such as watchlist for SGX announcements and personalized screeners in future to help you save time as an investor.
Who is behind Stockflock?
We are 4 young entrepreneurs with 3 software engineers and 1 business development guy.
We believe that technology will help narrow the gap between the institutional investors and retail investors. With better technology, retail investors will be less disadvantaged against the big boys.
I hope Stockflock will help investors be more informed of the companies they invest in and make better decisions over the years. By simplifying them, I believe it will help people invest better.
What are some of the simple but important numbers which you look at? And how Stockflock can help me with these numbers?
If you search for any company, you will notice that Stockflock picked up 8 key ratios that an investor must look at. They are:
- Profit margin
- Earnings growth
- Returns on equity
- Dividend yield
- Operating cashflow
#1 Valuation. Is the stock too expensive?
Just like when you do your shopping, you want to find the cheapest store to buy from. The same principle applies for investing. You wouldn’t want to buy a company that is too expensive.
Here is the chart of Amara, a hotel operator of the luxurious Amara Sanctuary Resort in Sentosa. First, we look at the Price-earnings of Amara. It runs at 8.91, the lowest among the 3 competitors. That makes Amara the cheapest company to invest in as compared to its competitors.
#2 Earnings Growth. Is the company growing?
We want to invest in companies that are growing. Amara’s growth has been stagnant for the past 5 years, hence it does not have an exciting growth story. However, that could pick up once Amara Signature Shanghai opens in China.
#3 Returns for investors. How much can you make as an investor?
There are two important things we look at. We want to know how much returns can the company generate for its shareholders, and of course, the more the merrier.
For that, we look at Return on Equity, also known as ROE.
Amara definitely generates the best returns for its investors as compared to its peers. Over 8% returns for the past 5 years?
That is a good business to be in. If they keep this up, the share price should increase year after year.
The second factor to look out for is dividend yield. Amara gives only 1.83% dividend yield.
If you are looking for passive income, then this stock is probably not for you. In fact, all 4 hotel companies give low dividends so investors should be looking for capital gains from rising share price.
#4 Insolvency risk. Will the company go bankrupt?
No matter how fast the company is growing, you must always pay attention to the risk of a company not being able to pay its debt.
History has proven that fast growing companies often borrow too much and when they fail, investors suffer. Therefore you should stay clear of companies that borrow excessively.
As seen from the pie chart above, Amara has almost 50% debt and 50% equity (slightly more equity).
This is on the high side.
A safer proportion will be 30% debt and 70% equity. Nonetheless, it is manageable for now but investors should be mindful if Amara’s debts keep rising.
Access to all the information on Singapore listed companies are now available for you to help you invest better.
Can a beginner know what to invest after going to Stockflock?
A beginner will find it easy to understand the information on Stockflock.
But they wouldn’t know what to invest in, not yet at least until we complete our screeners and portfolio analysis. Dr Wealth provides great investment education and beginners should certainly start there to learn the basics.
What is your investing style like?
I like to invest in companies that I believe is able to grow over the next 10 years.
Personally, I enjoy reading up on the businesses and it is exhilarating to own good businesses. It is also partly because I like to hold concentrated portfolio over long period of time.
I like the buy and hold forever approach and so I hold under 10 stocks usually (restricted by my time to read up on companies). There are many good literature covering what determines a good business.
I would recommend reading “Good to Great” by Jim Collins.
In essence, a track record of good management, strong branding and cost efficiency. I think most people will recognize a good business when they come across one. The question should be, what price makes the investment rational?
What do you think is the most important thing about investing?
Every company has the few key features that you should understand before you invest in them.
For example, OCBC is a bank and hence, focus should be on interest rates and bad debts.
OCBC is selling around 10x P/E, returns 10% equity every single year for past 5 years and gives ~3% dividend yield even in low interest rates environment, not to forget it is close to impossible for new entrants to compete. It is an attractive company to invest in for long term. In addition, bank stocks make good sense for my portfolio because I have REIT exposure which tends to suffer when interest rates rises.
Why should investors use Stockflock over other platforms?
Because we try really hard to make the platform easy for investors to use.
On Stockflock, you should be able to save time. We help you understand and monitor your investments better. Of course, we are still heavy in development and many features are waiting to be released.
We are going to have personalized screeners that help you keep track of companies that falls into your radar after a major price movement or a new earnings report.
Other features include portfolio analysis, price alerts and other tools to manage your investments.
Stockflock has discontinued its services in 2017.
CEO of Dr Wealth. Built a business to empower DIY investors to make better investments. A believer of the Factor-based Investing approach and runs a Multi-Factor Portfolio that taps on the Value, Size, and Profitability Factors. Conducts the flagship Intelligent Investor Immersive program under Dr Wealth. An author of Secrets of Singapore Trading Gurus and Singapore Permanent Portfolio. Featured on various media such as MoneyFM 89.3, Kiss92, Straits Times and Lianhe Zaobao. Given talks at events organised by SGX, DBS, CPF and many others.