Soup Restaurant is the first F&B counter I invest in, as well as the first ultra penny stock that I traded. It is due to the low share price and the huge effect of a 0.5 cent movement of the counter on my profits and losses, I dare not venture too much on this counter. Hence after some thought, I decided to buy 15 lots of this counter, at a price of $0.10 per share.
As this counter is very thinly traded, the share price has been rather stagnant. However, due to the rather high dividend yield from this counter, it is worthwhile to keep it for some time. This is the case until July 2010 when the interests in this counter suddenly rose and its share price rose with it. I believe that was the time where many traders realize the potential of this F&B counter that caused them to flock to it and hence pushing up the price.
All these interests pushed the share price up to a new high of $0.160 at around March 2011, which was an impressive 60% above my purchase price. However, due to greed, I was hesistant to sell it and hence missed the opportunity to realize the hefty gains.
In late 2011, when the Singapore budget was announced, the share price of Soup Restaurant begins its downtrend, as most of their employees were foreigners. The Singapore government has announced an increase in the levy for hiring foreign workers, causing an increase to the operating expenses and thus result in a downward pressure on its profits.
True enough, ever since then, the share price of Soup Restaurant hovered around the $0.120 and $0.135 band. After a few quarters of decline in operating profits the company announced a cut in dividend payout. The situation was made worse by a legal tussel between the main shareholders of Y.E.S. group and Soup Restaurant. Although the matter was soon brought to rest, I believe with the cut in dividends and the heightened difficulties to increase their operating profits, it is time to for me to realize my gains in this counter to look for better investment opportunities.
My thoughts at that time: Due to greed, I have already missed out the opportunity to sell at a high profits. If I don't sell now, the dividends I will continue to get may not be more than the possible gains I may make if I reinvest this sum in other stronger bluechip counters. Moreover with STI climbing above 3,000, this may be a signal for me to sell and reposition my portfolio.
Lessons learnt: As always mentioned, in investing, always set a buy and sell target for every counter, and stick to it. This will prevent any regrets later.
No comments:
Post a Comment