Since my previous post on increasing my exposure to BBR Holdings (BBR Holdings Investing Thesis) at prices between $0.165-$0.174, the company now has a new substantial shareholder: Dr Chiu Hong Keong
A quick google search would reveal him to be the founder of Pintaras Jaya berhad, interestingly, a piling and construction company listed in Malaysia. BBR’s top shareholder lists include several construction companies.
In my view, this can only be a good thing. Why would competitors take up individual stakes in your company with their own personal money otherwise?
BBR’s share price has also risen since my last bulk purchases. At the current price of around $0.185, the gain is approximately 10% or so. Not something to be scoffed at time-weighted wise, as it’s only been 1 month or so.
Still, the volumes are too thin to be indicative, and anyway as a deep value investor, I’m looking for much much larger gains to justify the time spent analyzing.
Looking forward to the financials coming up in the next few quarters. If there are no surprise losses from the general construction arm, the gains should be quite substantial.
Nothing much to say or add here. Boustead’s CFO, Mr Loh Kai Keong, just won the best CFO at the SGX Corporate Awards 2016, following in the foodsteps of FF Wong, who won the best CEO award back in 2009.
I don’t spend much time updating myself on Boustead’s activities. With FF Wong at the helm, I just trust his investing acumen. This guy’s track record is not to be scoffed at. He has proven to be value accretive, and most importantly, guards the company’s $$$ like his own.
It is telling that ever since the company introduced a scrip dividend scheme, I have not taken the dividends in cash, but instead permanently opted for scrip.
To paraphrase WB: I don’t think it’s my business to be telling Messi how to play soccer.
Again, not much to add here. CFO has previously answered all my queries. I’m eagerly awaiting news of how the latest guide panels are doing. There should be more info on that in the upcoming quarterly results.
Until then, I’m sitting tight in this position, without increasing or decreasing it.
This is another company whose management I respect a lot. I have previously spent a lot of time analyzing hard, quantifiable data. I enjoy doing it, and it’s how my brain works. However, increasingly, I’ve started to realize that soft data like how strong is the management team is actually equally as, if not more important than data alone.
However, after the massive run up, I am not adding to my position. I haven’t reduced either, but will be monitoring the upcoming results.
I’d like to see more data that the integration of their acquisitions is proceeding smoothly. Dutech has grown by acquisitions in recent times, and the key thing with acquisitions, is to prove there’s synergy and show results from cost savings, cross selling products, sharing of client base etc.
Hock Lian Seng Group
Since my divestment, the share price has languished and remained largely flat. This is what I predicted based on both FA and TA (Post-mortem of Hock Lian Seng Divestment, Hock Lian Seng – Staying a step ahead of Analysts). I’m pleased with how this investment has turned out, as I can literally feel a direct correlation between the amount of work and the level of understanding, and the accuracy in predicting/guessing how the share price would react.
I’ll continue to study HLS’s financials, but I am unlikely to take a position again anytime soon.
King Wan Corporation
Obviously I’ve been occupied with this of late. Part III is still pending. The next step for me is to figure out what to do and this is turning out to be much much tougher than I expected.
CFO has been trying to answer my questions, but each time as I delve deeper and ask harder questions, I uncover more and more potential problems. At least now I know for a fact, that MD Chua Eng Eng knows of a number of shareholders (most certainly myself), who are not very pleased with her.
I hate to create trouble. I hate the limelight, and I value my anonymity greatly. My sole interest is to see the companies I have invested in, create value and do well. Unfortunately, in this instance, the management actions are so asinine that it really boggles my mind.
It’s very unlikely that I’ll go down this route, but I’ve done some back of the envelope calculations and with my capital, together with other deep pocketed investors’ capital that I do not directly control, but can strongly influence, and perhaps even adding in other disgruntled minority shareholders; together the position is sufficient to create some real problems for management.
Again, not much to add here. Just awaiting the next quarterly results. Mr Chu Sau Ben has articulated many grand plans for the company, it remains to be seen whether he can execute them.
Meanwhile, the valuations remain very attractive for me to stay vested. The good thing about bottom fishing is that you don’t need to get many big things right to realize a big gain.
Anyway, my position in this is rather small.
It’s going to be incredibly hard to take control of the company though, without the blessings of the Chengs. I don’t see any activist coming in anytime soon, although surely if I can see it, many “pros” should be able to see how easy it is to realize value simply by delisting and breaking up the company.
In my mind, LTC Corporation also forms like a mini insurance for my portfolio. At the current price, it is unlikely to drop any further. Both from a FA and TA perspective.
Which means the only other 2 scenarios are it remaining flat, or rising sharply.
I’ll take my chances with this.
I’m behind in my analysis with this. Still, based on my last analysis, I am generally not too optimistic about the company going forward. The company has done well, and is now incredibly cash rich.
This is a mightily under recognised company. Many people still associate Metro with retail, which is kinda ridiculous seeing that for several years, it’s retail accounts for <10% of net profits and in fact, has contributed losses in recent years.
Still, Metro’s expertise in investing in foreign markets, and focusing on it’s niche (Commercial properties including shopping centres and offices) is very respectable. They are also smart enough to find strong local partners.
King Wan needs to take a leaf out of Metro’s book.
I have quietly accumulated more of this since Brexit happened. (I now own 4,800 shares of VRX). So far it has been rather profitable. Today’s news of FDA’s approval of Valeant’s Relistor as well as Brodalumab didn’t come as a surprise to me.
The share price has rallied to around $24++, and I’m rather pleased with my recent acquisitions at $19++. Still, I am talking about a small tiny scale here. In reality, I’m awaiting much longer term data that will hopefully show that the markets have greatly undervalued VRX all this while.
I suspect that would take at least the next 3 quarters.
With regard to the FDA regulatory process, I did some prior work to try to understand this better. I spoke to someone who has experience in the equivalent drug regulatory process in Singapore. Being in the healthcare industry, I can understand this sector fairly well too.
Although this hoo ha about the FDA being concerned about Brodalumab’s 6 suicide cases in clinical studies kinda dominated the headlines, in reality FDA can only control VRX’s US activities. VRX would still be able to proceed with sales worldwide without FDA’s approval.
However, the regulatory process in many other places use FDA as a “Reference agency”. This means that FDA’s decision weighs heavily on their own agency’s decision. (Singapore’s equivalent is Health Science Authority)
The exception being the EU. Europe tends to have their own individual thought process and their approval (or rejection) seems to be more independent. Canada on the other hand, pretty much echos the Americans.
Hence, FDA approval is a big thing. I was confident of approval too, because FDA tends to be rather liberal. The drug approval itself is a big thing, because it does show that VRX has many hidden gems in its portfolio that are not valued at all currently by the markets.
Still, the key for VRX is not a couple of drug approvals. The key is the upcoming Q2 results (probably in early August).
I’ll be scrutinizing the results for any improvement in scipts for key drugs. If Q1 was meant to kitchen sink the results, Q2 should BEGIN to show a turnaround. This should be exciting, and hopefully rewarding.
I’m in the market for a 3rd property in the next couple of years. My personal view is that it’s too early to start buying, and in any case I’m in no hurry to do so.
With this in mind, I do continue to follow up on the latest development, analyze, refresh my thoughts and look out for bargains.
At this point, I’d like to link to this fantastic article by Kyith over at Investment Moats:
The data in this article, and the conclusions are spot on. It tells me that the stories of astronomical gains from property investments are true…….. for a select few. It’s really not as common/often or as stable as one thinks.
As the article says, there are only that few periods where the property market showed massive falls, and it is a big question mark whether one can have the financial and mental capability to jump in during those periods.
The long wait in between these periods would also have made several buyers jump in, leaving the lucky few with adequate capital to capitalize during the large falls.
Over the long term, and considering the general market as a whole, property would actually show gains similar to an equity portfolio.
Bearing in mind that the data presented doesn’t include all the other miscellaneous costs involved. Having gone through such a process, I can safely say that these costs add up to a very substantial proportion of the actual costs of the property. There are so many miscellaneous costs that I don’t even remember the names. Basically anytime anyone or any agency has to do something to verify, file, submit, approve, transact something for you, you gotta pay for it.
If it’s the agent, it’s called a commission. If it’s the government, it’s called a tax. If it’s the lawyer, it’s called legal fees. The result though, is most assuredly the same: you gotta pay.
I enjoyed this piece a lot. It’s informative, with substantial data for substantiation.
It also gave me a new perspective, which is surely the holy grail of reading.
I have gingerly started building a short position at this levels again (SPY is 217.32 right now). The position is still tiny, as I believe this false rally has legs to run a bit more.
I call it a false rally as, well, look at the corporate earnings and one gets the idea. The markets are rallying on the expectation of more easing from BOE, BOJ and basically everyone else.
On a TA side, the rally upwards has been on strong volumes. I’m starting a small short position via options, but will continue to add to it gradually. If the rally upwards starts showing much smaller volumes, I’d more likely go short more strongly.
I’m spending quite a fair bit travelling this year. The costs of this extravagance is getting racked up, and I’m planning to do a trip to Europe in Sept with my family. Travelling with one’s family has simply gotta be one of the greatest joy anyone can experience.
On a separate note, the “portfolio performance” page is in a mess. I still trying to figure out a way to present the information in a more readable way. I’ll get down to making it neater, yet still as transparent as currently. Eventually.
I’m still looking to deploy my relatively sizable cash holdings. I am in no hurry at all. (Many thanks to those who have sent me ideas, I do look into them.)
Finally, next month is earnings season again. It’s always fun during earnings month.