How I Made 80.65% Returns on My Staycation
As a value investor, I do not monitor the share price of my stocks very often at all. Instead, I’m more concerned whether the underlying business of my stock is still performing. If the business performs and grows, I believe profits will grow, eventually leading to growth in share prices.
Today is a day where one of my stocks surprised me. After a month of not checking my stock prices, I realized one of the stocks I invested has made 80.65% for me in less than a year! This stock is a GEM and right under everyone’s nose — it is Breadtalk.
How did I get to know that Breadtalk is a great company to invest in? Because I patronize them almost every weekend! If you think Breadtalk only owns its ubiquitous bakery chain, then you are wrong. They also own eateries such as Toastbox, Din Tai Feng (where they offer my favourite xiao long bao), Food Republic, RamenPlay, Icing Room, etc.
I believe the above eateries are as well known brands as Breadtalk itself. I also realized I actually patronize Breadtalk more than once over a single shopping trip. If you observe close enough, you will find that Breadtalk loves to place their eateries almost everywhere in a shopping mall. This is an excellent strategy. Customers will not miss them. One of the malls that has almost all the Breadtalk eateries is Resorts World in Sentosa. Here’s how how I got interested in this stock.
Last year, my family went to Resorts World for a staycation and Breadtalk was the one that “took care” of the meals for my family. As we got to Resorts World, we had our brunch at RamenPlay. After we checked in and had our fun at Resorts World, we opted for our favourite xiao long bao at Din Tai Feng for dinner. The dinner queue over the weekend was terrible. Thankfully, we had an early dinner and we got our table in less than 15 minutes. The service was fast. We finished our dinner in less than 45 minutes, which is good table turn for a restaurant. As we stepped out of the restaurant at around 6pm, I noticed the approximate waiting time for a table was now about 30–45 minutes. And then before we headed back to our hotel for more fun, I dropped by at Breadtalk to get some bread in case the kids get hungry at night. The following day we took a monorail to Vivo City. We had our lunch at Food Republic (which was the nearest food court from the monorail) before we headed home. As I unpacked my luggage back home, I took a look at the receipts and realized our family contributed quite significantly to Breadtalk during this short trip. An investment idea suddenly struck me!
Immediately that night I started to analyse this stock – going through their annual reports, our 8 Investment analysts’ research report. After working through the numbers, I realized Breadtalk was undervalued! And so I took action, investing this stock when it was only $0.465 per share. As of 12 Mar 2013, the share price has gone up to $0.84, a whopping 80.65% capital appreciation in less than a year.
Moral of the story. There are many investment ideas around. But notice how I unearthed a great stock during my staycation. Keep your investment strategy simple by investing in businesses you understand. NO trading, NO reading of charts, NO use of options. Value investing rocks! 🙂
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This is NOT a recommendation to buy or sell any of the above mentioned securities. This case study is for educational purposes only. Always do your own research and practise independent thinking!Earning Disclaimer
“Please note that the material here is provided to you for general information and illustrative purposes only, or as descriptive case studies on how our value-investing principles may be applied. It is not intended to be and should not be construed as any form of general or specific financial advice. For the avoidance of doubt, we do not recommend or provide opinions on how or what you should or should not be investing in, and you should always do your own research and independent assessment before making any investment decisions, taking into account your own specific circumstances. If you require any financial advice on investments or any other financial matters, please consult the relevant professional financial advisers.”