AEM share price dented my portfolio

LIFETIME MEMBERSHIP As a matter of policy, I do not usually share my stock investment portfolio in this blog. This is because I do not want to create the impression that I am showing off my wealth. However, at the request of an SG Wealth Builder member, I will provide at an update on my investment portfolio as at 12 May 2021. The recent devastating meltdown of AEM share price has dented the market value of my portfolio. So this update will be quite unflattering to say the least.

Given the current crisis of confidence for AEM share price, the thought of cutting losses did cross my mind to be honest. But my portfolio diversification and contra gains helped to mitigate the unrealized losses from AEM. Furthermore, AEM constituted just 11.5% of my portfolio. Henceforth, the damage from the fallout of AEM share price is largely contained. In view of this, I have decided to hold this stock for the time being and give the management the benefits of the doubt to prove themselves.

From $4.18 on 29 April to a low of $3.40 on 11 May, AEM share price plunged by a whopping 18.7%. The crash of AEM share price followed the release of Q1FY2021 financial result which saw revenue collapsed 45.4% year-on-year. Obviously, investors were horrified and ran for their lives, causing AEM share to suffer carnage.

The volatility of AEM share price means that this counter is not for the weak-hearted. I have always emphasized that there are no good or bad stocks. Instead, there are only good or bad investment strategies. There are opportunities to make money out of the wild swings of AEM share price, provided you set the right entry and exit levels. More importantly, it also drives home the importance of maintaining a diversified portfolio across different sectors.

At the moment, I have incurred paper losses for my AEM holdings but the amount is still manageable. In my opinion, it is certainly not the end of the road for AEM share price. In this article, I will reveal my investment portfolio and also the outlook for AEM share price. Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market.

My portfolio ambushed by AEM share price

For sure, the explosive free-fall of AEM share price is ignited by the financial performance for Q1FY2021. Many investors were caught by surprise at the sharp fall in revenue. To be honest, I struggled to make sense of the performance as well. After all, AEM’s US competitors, Cohu and Tetradyne, all reported year-on-year revenue increases in Q1FY2021. The narrative for chip demands certainly remained robust. Chip manufacturers are ramping up their capacities, thereby driving up demands for chip testing. Yet AEM bucked the trend to record a plunge of 45% in revenue.

What upset me is that there is absolutely no warning about what is coming. Whilst it is true that Q12020 had been an exceptional period which saw sky-rocketing demands for chips, I did not expect AEM’s revenue for Q1FY2021 to drop by so much. I was expecting a single digit year-on-year decline, and definitely not to the extent of 45%. It seems that the effect of being over-reliant on Intel is rearing its ugly head. Its high time that AEM management grab the bull by its horn and tackle this problem to halt the meltdown of AEM share price.

My investment portfolio (as at 12 May 2021) [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

Congratulations on your first step to becoming part of SG Wealth Builder community! For a one-off payment of $200, you can get full access to all the articles and enjoy the benefits of SG Wealth Builder Membership.

The full benefits and privileges of SG Wealth Builder Membership:

1. Access to the latest premium articles of SG Wealth Builder
2. Email notifications of latest blog articles
3. Request for coverage on stocks, insurance and other personal financial topics
4. Comment in articles

Note: After payment is made, you will be prompted with registration form to create your user-id and personal password.