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Absolute jewel
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furnaces
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11-May-2007 08:37
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This counter is definitely severely undervalued. Given its latest total number of shares of 339million shares due to conversion of tranche 3, its FY2006 PER stands at only 4.1 times. Strong growth in the North America and European market is expected to continue due to increasing demand for consumer entertainment products. Management also expects FY2007 to be better than FY2006 which means we will likely see the PER go down even more if it still stays at current price. However, this counter seems to be on a downtrend and may go down to around 0.17. Suggest accumulation for value investors at around 0.17- 0.175 for medium term gain. Its likely to double in its value then. |
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donaldduck
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10-May-2007 09:46
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Hi Ray, Thanks for your TA input, reckon this stock is not for the punters. But then again, there are so many other stocks that are trading at crazy valuations with no actual solid biz or financial figures to back the prices hogging the highest volume index these days, I dont see why speculators should shy from this safe and cheap bet. But this stock definitely packs the punch on fundamentals. A virtual give away at current price, growth company trading below NAV ~ 0.21 sgd cents...consider vesting in it as an insurance against a sudden market about-turn. |
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rayphua
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09-May-2007 23:56
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imho, this counter is not showing any signs of a move at this moment in time. Those looking to contra should not be touching this at the moment. Good luck to those who decides to vest anyway. Cheers. |
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donaldduck
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09-May-2007 23:46
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Super laggard gone largely unnoticed in bull run For folks out there looking for undervalued stocks, this one should trump them all. EPS based on conservative estimate of 10% growth in earnings for FY07 and assuming full conversion of SGD 50 million notes issued to advance opportunities fund @ avg price of sgd 0.20 (assuming exchange rate =sgd1.5/usd 1 ) = (1.1* USD 15,153,000*1.5)/530429978 = 0.047 sgd PE (estimated based on above assumptions) = 0.19/0.047 = 4.04 This is still extremely low considering full conversion of notes (although full conversion would not be complete till 2011) to shares has been taken into consideration and low growth of 10% in earnings for High definition dvd consumer electronics industry. ROIC (excluding interest bearing assets) ~ 17% > 9% estimated WACC, based on 3.3% after tax cost of debt ROE ~ 27% Residual value based on required rate or return of 16% (1/target PE of 6) and terminal growth of 5% = 0.37 sgd. This represents ~ 95% upside potential yet to be realised. With company's intentions to establish foothold in emerging markets like russia for which flat panel tvs are on the rise and reinforcing market share in south america and mature markets like usa and europe with new product releases, the company looks set on track to achieve another year of improved profitability. |
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