It’s the time of the year to fill out the tax forms.
2017 was the second full-year of the bargain hunting strategy. The total return for the portfolio was 18.8 %. This return includes fees, FX and taxes (transaction taxes and realized capital gains). The average share return was 23.9 %, which may interest anyone considering the NCAV/Market cap as a key ratio.
Unfortunately, I have stepped on a mine. Swing Media is trading halted and the situation smells bad. Either due to poor management or some shenanigans the company is facing bankruptcy due to liquidity problems. I’ve taken the conservative stand and marked it to zero value. Maybe I’ll write some more on the lessons learned later.
|Boom Logistics Limited
|ODAWARA AUTO-MACHINE MFG.CO LTD
|NICHIWA SANGYO CO., LTD.
|EIDAI KAKO CO., LTD
|Renesas Easton Co Ltd
|Magnificent Hotel Investments
|Kawasumi Laboratories, Incorporated
|Coventry Group Ltd.
|NIPPON ANTENNA CO., LTD
|KK Chuokeizai-Sha Holdings
|Oriental Watch Holdings Limited
|Sasakura Engineering Co Ltd
|Dickson Concepts (International) Ltd
|Charle Co Ltd
|Clarius Group Limited
|Sin Ghee Huat Corporation Ltd.
|CosmoSteel Holdings Limited
|C C Land Holdings Limited
|QC Holdings, Inc.
|Sino Agro Food Inc
|Kingboard Copper Foil Holdings Limited
|UKC Holdings Corp
I received a notice from my old provider that they where going to charge me 400$ per year to run the blog. Since I have circa 5 readers per month I decided to move it to a cheaper (and almost non-working…) solution. 🙂
This is back-dated post. I have entered Ambertech. It’s a small Australian net-net. Entered at 0.12 AUD.
Took a quantitative bet on Sanko Co. Sanko manufactures mechatronics and plastic components for automotbile and IT products.
Low margin business, strong balance sheet. Dividends. Only ~1200 shareholders according to IR info. Entered at NCAV ratio of 0.6 or 460¥.
So UKC hit a valuation of above net current assets a lot sooner than I expected. Not because the share price took of on a rocket, but because the company made large write-downs of receivables and prepayments.
The share has traded up since I took my position, but I feel a bit anxious about the write-downs so I sold. You know “Misfortunes never come singly” – there could be more problems with the books. The need to put together an independent audit committee indicates managerial problems.
Exited at ¥1922, so return of about +17 % in 5 weeks.
I took a small position in GIGM today. It’s a Taiwanese mobile game/IT company listed in the US. The share has been trading at below net-cash valuations for some time.
It’s a quantitative bet, the balance sheet is strong. The underlying business is poor, but cash burn-rate is slow. Some recent inside purchases. No share issues. Trading at net-cash ratio of 0.57.
Not much else to say. This share should obviously be part of a large basket net-net holdings.
UKC Holdings is engaged in the sales and distribution of semiconductor and electrical components. It´s a typical Japanese net-net low margin business. Entered at ¥1630 or a NCAV ratio of about 0.51. The company pays dividends and have some IR info in English.
|| ¥ 134 895 000
|| ¥ 85 111 000
|Net current assets
|| ¥ 49 784 000
|| ¥ 25 500 000
Sin Ghee Huat is a stainless steel sales and distribution company, a one stop shop for shipbuilders, oil and gas companies etc. SGH is in the pipes, fittings and plates business. There are a number of similar net-net around the world, for example CosmoSteel (B9S). The sector is obviously hit hard by the declining oil and energy prices.
None the less, SGE has a strong balance sheet with plenty of cash and almost 0 liabilities. The company does also seem to run prudently.
Entered at 0.2 SGD. NCAV ratio at 60%. Market cap of 44 million SGD.
Clarious Group is a requirement service company listed on the Asx. The share is trading at NCAV ratio of 0.47 and the current assets are mainly receivables. Entered at 0.089. Market cap is circa 8M AUD.
A more detailed write-up is available at Cigarrfimpar.
Today I exited Kingboard at 0.405 SGD. There is a tender offer for all shares in Kingboard.
During the time I’ve owned the share there has been a pending lawsuit from minority share holders against the company. The story has many twists and turns and you can read more at the blog Cigarrfimpar.
As the shares where tendered at a slight premium to net current assets I am pleased. I decided to sell the shares on the market instead of accepting the tendered offer, mainly because it was nice to take some gains of the table.
I entered at 0.181 SGD, so the gain ended up at +124 % for a 18 months holding period.