Thursday, August 23, 2012

Asia Enterprises Holdings

This is a post to establish the value of Asia Enterprises Holdings.



































Year Dividend Growth(%)
2012 0.011 -25%
2011 0.014 17%
2010 0.012 9%
2009 0.011 -61%
2008 0.029 28%
2007 0.022 26%
2006 0.018

I have given above this the dividend payment of Asia Enterprises over the last six odd years.

They have developed from a small distributor to become a major Singapore-based distributor supplying a wide range of steel products and providing value-added steel processing services to industrial end-users in Singapore and the Asia-Pacific region.

Looking at the dividend distribution pattern as well as the book value growth, they are worth at current dates between 16 to 17 cents a share.

The share price is currently around 23 cents a share.

That is roughly around 40% over-priced.

I would recommend that you keep this on your watch-list and include it into your portfolio, if and when it drops to below 15 cents a share for a long-term position.

If you are looking for a trading idea, it will drop to around 20 cents a share in November or thereabouts.

Look to enter  around 20 cents and exit around 27 to 29 cents a share, which it will normally hit before it goes ex-dividend in May.

Here is a link to the company

http://asiaenterprises.listedcompany.com/







































Tuesday, August 21, 2012

F J Benjamin - Follow Up Post on Estimate

I had written a post on F J Benjamin earlier in May

A link to F J Benjamin's web-site is below


Prediction
 
I had estimated that FJB will earn around 2.61 cents per share for the year FY 2011 /2012.
 
Actual
 
FJB earned 2.44 cents per share for the year i.e. the prediction was 93% accurate.
 
Prediction

Based on past track record, they will announce a dividend of 2 cents per share, payable in November.
 
Actual
 
FJB announced a dividend of 1 cents per share, the prediction was only 50% accurate
 
Their closing price yesterday was around 35 cents per share.

If you had bought at 32 cents, you can exit today at 34.5 cents per share. The return is around 7.8% for your capital. With friction of trading costs, it should be around 7%, 0.4% either way.

Future till November 2012

Since the dividend is lower at 1 cents, the yield is only 2.89%, chances are the share price will drift lower.

From the report,
"While the global economic outlook and operating environment remains challenging, the
Group will continue to scale up businesses in the region by pursuing organic growth and
investing in new brands. The Group plans to open a net total of 7 new stores in Singapore
and Malaysia, and 8 new stores in Indonesia in the next twelve months, bringing its retail
footprint to 206 stores.
The Group continues to be prudent in managing business risks and costs and will invest in
technologies to further enhance productivity."

In a very extreme scenario, the share price can drift to as low as 23 cents.

In a pessimistic scenario, it can go to 30 cents, especially in December 2012, after it goes ex-dividend.
 
Full Disclosure : I am long F J Benjamin and will look to add to my position below 30 cents.

Wing Tai - Estimate of Earnings

This is a post aimed at estimating the earnings of Wing Tai in the financial year 2011 to 2012.

A link to Wing Tai's web-site is below

http://www.wingtaiasia.com.sg/index2.html

By my estimates, Wing Tai will earn around 18.33 cents per share for the year FY 2011 to 2012.

This is based on the current earnings for the first three quarters of their year as well as an assessment of what could be the earnings for their last quarter.

Based on past track record, they will announce a dividend of 6 cents per share, payable in November.

Their closing price yesterday was around 1.42 cents per share.

At that price, the expected yield is 4.22%.

In the last two years the price has hit a bottom of around 92 cents.

The peak has been 183 cents which was just before it went ex-dividend in November 2010.

The NAV estimate is 2.59 SGD per share when it announces its results.

At the very least, it will likely spike to around 1.55 per share after results, (60% discount to NAV).

Optimistically, it may hit 1.81 per share (70% discount to NAV).

In case the dividend is higher, this will help in achieving these share prices.

However, if the dividend is lower, the converse is true and the share price will react.

Full Disclosure : I am long Wing Tai

Wednesday, August 15, 2012

Genting


When analyzing Genting, P/E ratios, book values, and net income growth don't matter a bit when you're trying to value it.

Genting has built a massive, expensive casino, which is essentially a money tree.

The value of the the tree is how fast the money falls.

Other things don't matter.

This is why we need to use EBITDA, or earnings before interest, taxes, depreciation, and amortization, as a proxy for how much money Genting is throwing off.

The second most important number is enterprise value, which, in this case, is the value of securities all owners in a casino hold.

Since debtholders are essentially owners, we have taken out interest costs above, and that's the portion of EBITDA paid to these owners.

Equity owners get to keep the rest

Add the market value of the stock to the book value of the debt, and I subtract cash, on the assumption that this could be used to pay off debt. This calculation results in the value of the entire company, or enterprise value.

When you compare enterprise value to EBITDA you get a ratio -- not dissimilar to the P/E ratio, but more relevant in the case of casino companies. 

This ratio is at the heart of valuing these companies.

Caesar’s Entertainment trades at a EV/EBITDA of 10.4, Melco Crown, Wynn Resorts, and Las Vegas Sands all traded with EB/EBITDA multiples of 10 to 11.

Genting is currently at 11, although projecting into the rest of 2012 it is at 12.

So, in that sense Genting is still slightly overvalued and has another 10% to fall.

Full Disclosure : I am neither long nor short Genting at this moment.

Sunday, August 12, 2012

Datapulse

You would recollect my previous post on Datapulse.
 
Here is a link to the company page.

http://www.datapulse.com.sg

Last year, they paid a dividend of 1.8 cents for the year.

Here is a look at the share price performance last year


The trading idea is this.

Datapulse is currently trading at 19 cents a share.

They are not likely to post a loss for the 2H of 2012 (From their 9 month report).

I expect Datapulse to declare a dividend of 1.8 cents for the year.

Once the results is announced, or leading up to the announcement, the share price will appreciate to around 22.5 cents.

You can buy in at 19 cents and get out around 22.5 cents to generate a return of 18% for a three month holding period.

Now, what is the likely risk, the risk is that they may not declare a dividend, in which case the price will collapse to around 10-12 cents.

Since it is an illiquid share, there is likely to be trading costs of around 5-6%, so, all in you can still gain around 10-12%.

Full Disclosure : I am neither long nor short Datapulse

Monday, August 6, 2012

Isetan

This is a post to highlight the amazing jump in price of Isetan over the last one month.

Here is a look below at the price of Isetan in the last one month.


The stock is on a tear, gaining, a whopping 46% in the last one month.

Here is a look below at the price of Isetan last year.




In the corresponding period last year, it lost 7%.

This is a company with low levels of trading.

The company got a SGX query and its reply is below

Question 1:  Are you aware of any information not previously announced concerning you (the issuer), your
subsidiaries or associated companies which, if known, might explain the trading?
- If yes, the information must be announced immediately.
The Company’s Response:
The Company is not aware of any information not previously announced concerning the Company, its
subsidiaries or associated companies which may explain for the trading activity.
However, the Company is in negotiations for the leasing of space with a view to the opening of a new store.
There is no assurance that the negotiations will be successfully concluded.
Question 2: Are you aware of any other possible explanation for the trading?
The Company’s Response:
The Company is not aware of any other possible explanation.
Question 3: Can you confirm your compliance with the listing rules and, in particular, listing rule 703?
The Company’s Response:
The Company confirms that it is in compliance with the listing rules in the Listing Manual, in particular,
listing rule 703.

So, from the outside, it seems like that the company is looking at opening a new store and hence the share gained 46%.

I do not have any positions in Isetan.

I noticed the jump and thought it warranted a post

Here is a link to isetan.

https://www.isetan.com.sg/


Wednesday, August 1, 2012

Predicting the Prices in August 2013

This is a post aimed as an exercise at improving predicting skills.

I have put together a table of the predicted prices for some of the stocks which are among the top 20 in terms of value trading in Singapore as on date.

The prices are as of the moment of writing this post.

Stock Price
Aug 1 2012
Predicted Price Aug 1 2013
Singtel 3.52 3.09
GLP 2.33 2.14
Capitaland 3.03 2.97
Golden Agri 0.73 0.73
Keppel Corp 11.21 11.16
Genting 1.29 1.45
OCBC 9.58 9.79
DBS 14.78 15.16
UOB 19.86 20.33
Noble Group 1.075 1.54
Wilmar 3.26 4.71
F&N 8.18 6.46
SembMar 4.92 5.27
Olam 1.865 2.39

I will review this next year to see two things

a) Out of the 14 predictions, how many are correct ? (Within 2%)
b) In how many predictions was the direction right ?

If you have a strong point of view on why this prediction will not be correct, do let me know in the comments below