Election, election and election. Every time I turned the corner this week, I was asked my views on the upcoming election. One of my friends even told me that I should put more thought into this election because the future of Singapore depended on our collective vote. So what did I do? I went onto Youtube to watch videos of the various opposition candidates on show. Never have I ever expected Singaporeans to be so passionate about the general elections. To make it even more exaggerating, I had a friend who smsed me at 8 am in the morning to ask if I was going to the Workers Party Rally at Serangoon Stadium. I would totally understand if he was living in the area of Aljunied and going to be voting for Low Thia Kiang but guess what? He lives all the way in Sembawang! And me? I live in the area but I cannot even be bothered to walk 1 km to listen to it.
Have you all looked at the candidates? Nicole Seah? Chen Show Mao? Impressive? I have to agree for a 24 year old, Nicole seems like a a sensible girl with a good head. But my question to anyone who is reading this...How much did you know when you were 24? Enough to contemplate policies? In life, there is something which brains cannot replace...that is experience. So all I can say is, vote wisely. As for Chen Show Mao, I cannot deny he seems to be a very intelligent man, but I get the feeling that there is more that meets the eye. Make sure you go onto Youtube to look at his speeches in mandarin. He is a totally different person when he starts speaking in his mother tongue. His true facial expressions are revealed and that did not give me a good feeling about him.
When it comes to listening to candidates rally speeches, I never pay attention to what they say that much. The reason is, I feel every candidate will make promises and give you their passionate views, but the best way to view them is to pay attention to their facial expressions to see if they really mean what they say and whether there are any other hidden intentions. I am sure all of us have been in a courtship before. When someone is courting you, they will promise you the world. But talk is cheap. When you get into the relationship, you realised that those were just words and empty promises and you have just accepted a jerk or a bi%*h into your life. By then, its too late.
Anyway this is meant to be an investment blog so I am not going to get into too much political talk in here.
So what should I write about this week? The USD is still weak? $1.227 to the SGD. Gold has moved to another all time high. Silver is broken its all time high. The last time silver was this high, the Hunt brothers had cornered it and it was artificially pushed to this price in 1980. Some "experts" are calling for $100 dollar silver and $2100 gold. I am not saying that I disagree but that would mean the USD has dropped to a point where the markets are inflated to a point which makes the tech bubble look like a bargain to Warren Buffett.
My little titbit on the Malaysian market this week is on an IPO called Focus Lumber. It IPOed at $0.60 and closed at $1.20 on the first day of trade. I rest my case. I just want to emphasis how great the Malaysian market is for investors and traders that is why I keep throwing in the little movements.
I remember my call on Fragrance some time ago and since then the stock has just gone from strength to strength. Another bonus issue again! Look back at the company's track record, it has given back so much to the shareholders and if you were a shareholder since the beginning, you will be laughing your way to the bank. In my post on Fragrance, I have already given you all the reasons to buy the stock. Fragrance should be used as a template for all of us on deciding which stocks to buy and put into our portfolios. It is also important to note that Fragrance did not start performing immediately. Value takes time to show its true form. Like what Warren Buffett said, "in the short term, the market is a voting machine, but in the long term it is a weighing machine." Value always shines through.
The Singapore market was a little weaker this week because people did not like the fact that 94% of the seats will be contested at this coming general elections. In the short term, it will not be too good for the STI, but in the medium term, people will not remember how many popular votes our PAP lost or won. So just take the pull back as a buying opportunity.
Earnings have been quite good so far in Singapore. The large caps all did well and the small caps have reported impressive earnings too. No negative surprises so far and I am looking through the books of some of the companies which I like to see if things have changed. So far I have not found any reasons to sell any of my calls. So lets see how it goes. Will keep you guys informed when if I should find any of my calls turning for the worse.
In the US, earnings have been not too bad with the usual suspects like Microsoft and Research In Motion underperforming. Overall it has been a decent earnings season over there but that does not really justify the gravity defying US markets. The Dow and S&P 500 has risen more than 10% this year. Interesting thing is, if you were a Singaporean investor and bought into the US market, your returns will only be 5% after taking into currency losses. It may seem like a good market environment this year, but even the STI is down by 0.5% for the year. All in all, it has not been an easy market to make money in. Take it from an investment professional (me), it has been tough to manage portfolios in such an environment. Where you have to juggle large fluctuations in currencies while trying to find good companies to buy.
Nothing much more to talk about unless you want me to start writing about what I think about the Royal Farce oops Wedding I mean.
Till the next week. Have a good trading week ahead.
Best,
SVI
Friday, April 29, 2011
Friday, April 22, 2011
ISDN Holdings farming for a stronger future. $0.175
Another week flies by and April is coming to an end. The good news is, pay day is here, the bad news is, bills are all coming in fast and furious. Another bright spot for the week is...its a long weekend! So what should we do during this long weekend? One thing may be to think about who to vote for in the coming elections. You have no idea how concerned investors are about elections. I was attending an investment seminar on wednesday and during the question and answer time slot, most questions were with regards to the upcoming elections and how the market would react to it. In my view, the best thing to come out of this coming election is the extra day off in lieu to be credited to our leave balances. We all know that its going to be a non event and just sit back and enjoy the festivities and all the political drama over young and "wet behind the ears" candidates.
Summary for this week's market....up again. Many say its due to the elections, I say its due to the weakness in the USD. It has reached $1.23 to SGD and all of you out there who are looking to go to the US for holidays, get ready to pack your bags cos your holiday is getting cheaper by the day. Earnings have come in strong, with Apple defying gravity once again. Earnings grew by what? 95%! That is just nuts, it seems like people just cannot get enough of Iphones and Ipads. Personally, I have been getting lots of grief from my colleagues and boss on my reluctance to buy an Iphone and sticking to my poor Nokia. Well there are a couple of reasons as to why I do not buy an Iphone....No Money. Oops thats only one reason. So I do hope they get off my back soon. As for Apple, it is a company which I have admired for a long time but I would like to give investors who love Apple stock a word of advice. The law of big numbers is going to be tough for Apple to continue its current growth rate, secondly, technology is a fickle industry. Remember how people raved about Sandisk, Research in Motion, Palm and many more? Just don't get too carried away with loving Apple. I even saw a research titled "An Apple a day keeps Asia happy". That is just worrying.
Earnings season has had a good 2nd week and the 3rd week is going to be similar but May is coming so do try to be more conservative. I would also like to inform my readers that I have finally taken profit on my United Overseas Australia. Although I continue to love this company, but I really think that returns in excess of 90% is something I have to take off the table. There are still may stock ideas which I have up my sleeve and it kills me for not having enough money to buy into them. Most of you shold know that I have been bullish on Malaysian stocks for sometime and I have moved most of my holdings into Malaysia. All I can say is, Malaysia better be "boleh" or else I am going to underperform the market this year.
I know many of you do not have the confidence to move into Malaysia because of the clob shares debacle more than decade and a half ago. It is understandable but not acceptable because investing is about being willing to take risks and the risk levels here are more than acceptable. Malaysia is not longer the same as what it was back then.
This week instead of going for a Malaysian stock I have decided to write about a Singapore company which I feel has some potential but it is no UOA. So lets just get straight into it. The company which I would like to focus on this week is ISDN Holdings.
Founded on its precision and motion control engineering capabilities in 1987 and listed on the Singapore Exchange Main Board since 2005, ISDN Holdings Limited has today transformed into a multi-industry corporation with diverse strengths.
With more than 89 offices spanning key Asian growth markets, ISDN’s business interests now include, in addition to engineering, the energy and agriculture sectors. These three key sectors are expected to propel the Group to its next level of growth which would introduce fresh revenue streams and open up a new vista of business opportunities.
Powered by its alliances with strategic partners in Europe, Asia and Australia, ISDN is poised to combine and thereupon benefit from the best-in-class technology and business systems these collaborations have to offer. Additionally, ISDN seeks to accelerate its growth momentum by complementing organic growth with acquisitions and joint ventures.
The Group continues to build on its trademark strengths underpinned by its sound business fundamentals, prudent and measured business approach as well as its widening global footprint that encompass markets in Greater China, Hong Kong, Taiwan, Malaysia, Indonesia, Vietnam, Thailand, India and the Philippines, from its headquarters in Singapore.
A leading engineering solutions provider, ISDN offers a wide range of engineering services including Motion Control, Industrial Computing Solutions and Other Engineering Solutions, mainly to customers who are manufacturers and original design manufacturers of products and equipment that have specialized requirements in precision controls.
Their manufacturing network that spans across China and South-east Asia including Singapore and Malaysia ensures a quick response time and excellent service support. By tapping into its core engineering competencies, ISDN is able to serve a multitude of industries including defence, medical, aerospace and oil & gas.
ISDN’s exposure to the energy market began with its supply of solar panel parts to industrial customers in China. This endeavor grew steadily and received a boost with ISDN’s appointment in the mainland as the official distributor for a US solar equipment manufacturer. Elevating the Group from representative status opened the door for ISDN to capture the vast Chinese solar energy market.
More recently, ISDN cemented its presence in the renewable energy sphere in 2009 through W2Energy that has since entered the initial testing phase. W2Energy will leverage on its catalytic depolymerization method, CPD for short, to recycle and harness organic and biological wastes such as plastic, wood, waste oil, rubber tyre, animal and refinery residue and municipal solid waste into synthetic diesel fuel.
ISDN offers office and industrial space solutions to new businesses gaining a foothold in China through its $22 million ISDN-Wujiang Industrial Park. Built originally to consolidate ISDN's diverse operations in the mainland, the hub's strategic location within the Wujiang Economic Development Zone, makes it an ideal entry point into China's thriving hi-tech and R&D ecosystem.
Sitting on 36,000 square metres of built-up area, the high-tech park is equipped with cutting-edge production capabilities and modern amenities, including staff dormitories, office space, warehouse, training and research & development facilities. The centralization of ISDN's joint ventures and associates in one single location creates a vibrant business environment that allows for an exchange of know-how and synergies beyond the Group.
ISDN’s foray into the fast-growing agriculture market is marked by the establishment of Ell-Gro Hydroponics Pte Ltd in 2010. It is a fully-owned subsidiary of ISDN Investments Pte Ltd., a newly-formed investment holdings vehicle of ISDN Holdings Ltd.
Ell-Gro Hydroponics is principally engaged in the business of high-tech hydroponics with farms in Malaysia and China. Ell-Gro offers a viable alternative vegetable farming method based on environmentally-friendly and toxic-free practices based on international standards. It has secured exclusive distributorship of the proprietary technology of its Australian partner, Boxsell Hydroponics.
What I like about them is their venture into agriculture in the form of hydrophonics vegetable farms. In the short run, worries about food shortages and inflaion is going to play right into this company's plans. I have spoken to their top management on the cost of these hydrophonics farms and it seems like the venture is not going to take a lot of capital and their first farm in Malaysia has already been a success. The Malaysian government have been very supportive to the company and expansion of the farm is already on its way. The company has also indicated that they will be setting up farms in China. They also have the franchise rights to their hydrophonics technology in Asia therefore there is little chance of replicating their technology. Management indicated to me that they have no intention to franchise out this technology to any other company in Asia.
I have personally had a couple of meetings with the top management of the firm and I really liked what I saw in them. Down to earth and humble. Very realistic with their projections and quietly optimistic. Very unlike the cocky managements which I have met in my time, FerroChina, Delong etc.... This is something I look for in management and ISDN fits the bill.
The company has been generating approximately SGD 7 million operating cash flow over the last 2 years and capex can easily be financed from within. Trading at 4.4 times p/e 2010 earnings. I believe a 20% growth this year could be very possible for the company which means that it is trading at a very attractive valuation. It is also trading at a discount to its NAV of $0.23 per share. At the current price $0.175, this company looks like an absolute bargain. Good valuations, expansion into a good industry and an honest management. That is all I need to say.
Have a great trading week ahead!
Best,
SVI
Summary for this week's market....up again. Many say its due to the elections, I say its due to the weakness in the USD. It has reached $1.23 to SGD and all of you out there who are looking to go to the US for holidays, get ready to pack your bags cos your holiday is getting cheaper by the day. Earnings have come in strong, with Apple defying gravity once again. Earnings grew by what? 95%! That is just nuts, it seems like people just cannot get enough of Iphones and Ipads. Personally, I have been getting lots of grief from my colleagues and boss on my reluctance to buy an Iphone and sticking to my poor Nokia. Well there are a couple of reasons as to why I do not buy an Iphone....No Money. Oops thats only one reason. So I do hope they get off my back soon. As for Apple, it is a company which I have admired for a long time but I would like to give investors who love Apple stock a word of advice. The law of big numbers is going to be tough for Apple to continue its current growth rate, secondly, technology is a fickle industry. Remember how people raved about Sandisk, Research in Motion, Palm and many more? Just don't get too carried away with loving Apple. I even saw a research titled "An Apple a day keeps Asia happy". That is just worrying.
Earnings season has had a good 2nd week and the 3rd week is going to be similar but May is coming so do try to be more conservative. I would also like to inform my readers that I have finally taken profit on my United Overseas Australia. Although I continue to love this company, but I really think that returns in excess of 90% is something I have to take off the table. There are still may stock ideas which I have up my sleeve and it kills me for not having enough money to buy into them. Most of you shold know that I have been bullish on Malaysian stocks for sometime and I have moved most of my holdings into Malaysia. All I can say is, Malaysia better be "boleh" or else I am going to underperform the market this year.
I know many of you do not have the confidence to move into Malaysia because of the clob shares debacle more than decade and a half ago. It is understandable but not acceptable because investing is about being willing to take risks and the risk levels here are more than acceptable. Malaysia is not longer the same as what it was back then.
This week instead of going for a Malaysian stock I have decided to write about a Singapore company which I feel has some potential but it is no UOA. So lets just get straight into it. The company which I would like to focus on this week is ISDN Holdings.
Founded on its precision and motion control engineering capabilities in 1987 and listed on the Singapore Exchange Main Board since 2005, ISDN Holdings Limited has today transformed into a multi-industry corporation with diverse strengths.
With more than 89 offices spanning key Asian growth markets, ISDN’s business interests now include, in addition to engineering, the energy and agriculture sectors. These three key sectors are expected to propel the Group to its next level of growth which would introduce fresh revenue streams and open up a new vista of business opportunities.
Powered by its alliances with strategic partners in Europe, Asia and Australia, ISDN is poised to combine and thereupon benefit from the best-in-class technology and business systems these collaborations have to offer. Additionally, ISDN seeks to accelerate its growth momentum by complementing organic growth with acquisitions and joint ventures.
The Group continues to build on its trademark strengths underpinned by its sound business fundamentals, prudent and measured business approach as well as its widening global footprint that encompass markets in Greater China, Hong Kong, Taiwan, Malaysia, Indonesia, Vietnam, Thailand, India and the Philippines, from its headquarters in Singapore.
A leading engineering solutions provider, ISDN offers a wide range of engineering services including Motion Control, Industrial Computing Solutions and Other Engineering Solutions, mainly to customers who are manufacturers and original design manufacturers of products and equipment that have specialized requirements in precision controls.
Their manufacturing network that spans across China and South-east Asia including Singapore and Malaysia ensures a quick response time and excellent service support. By tapping into its core engineering competencies, ISDN is able to serve a multitude of industries including defence, medical, aerospace and oil & gas.
ISDN’s exposure to the energy market began with its supply of solar panel parts to industrial customers in China. This endeavor grew steadily and received a boost with ISDN’s appointment in the mainland as the official distributor for a US solar equipment manufacturer. Elevating the Group from representative status opened the door for ISDN to capture the vast Chinese solar energy market.
More recently, ISDN cemented its presence in the renewable energy sphere in 2009 through W2Energy that has since entered the initial testing phase. W2Energy will leverage on its catalytic depolymerization method, CPD for short, to recycle and harness organic and biological wastes such as plastic, wood, waste oil, rubber tyre, animal and refinery residue and municipal solid waste into synthetic diesel fuel.
ISDN offers office and industrial space solutions to new businesses gaining a foothold in China through its $22 million ISDN-Wujiang Industrial Park. Built originally to consolidate ISDN's diverse operations in the mainland, the hub's strategic location within the Wujiang Economic Development Zone, makes it an ideal entry point into China's thriving hi-tech and R&D ecosystem.
Sitting on 36,000 square metres of built-up area, the high-tech park is equipped with cutting-edge production capabilities and modern amenities, including staff dormitories, office space, warehouse, training and research & development facilities. The centralization of ISDN's joint ventures and associates in one single location creates a vibrant business environment that allows for an exchange of know-how and synergies beyond the Group.
ISDN’s foray into the fast-growing agriculture market is marked by the establishment of Ell-Gro Hydroponics Pte Ltd in 2010. It is a fully-owned subsidiary of ISDN Investments Pte Ltd., a newly-formed investment holdings vehicle of ISDN Holdings Ltd.
Ell-Gro Hydroponics is principally engaged in the business of high-tech hydroponics with farms in Malaysia and China. Ell-Gro offers a viable alternative vegetable farming method based on environmentally-friendly and toxic-free practices based on international standards. It has secured exclusive distributorship of the proprietary technology of its Australian partner, Boxsell Hydroponics.
What I like about them is their venture into agriculture in the form of hydrophonics vegetable farms. In the short run, worries about food shortages and inflaion is going to play right into this company's plans. I have spoken to their top management on the cost of these hydrophonics farms and it seems like the venture is not going to take a lot of capital and their first farm in Malaysia has already been a success. The Malaysian government have been very supportive to the company and expansion of the farm is already on its way. The company has also indicated that they will be setting up farms in China. They also have the franchise rights to their hydrophonics technology in Asia therefore there is little chance of replicating their technology. Management indicated to me that they have no intention to franchise out this technology to any other company in Asia.
I have personally had a couple of meetings with the top management of the firm and I really liked what I saw in them. Down to earth and humble. Very realistic with their projections and quietly optimistic. Very unlike the cocky managements which I have met in my time, FerroChina, Delong etc.... This is something I look for in management and ISDN fits the bill.
The company has been generating approximately SGD 7 million operating cash flow over the last 2 years and capex can easily be financed from within. Trading at 4.4 times p/e 2010 earnings. I believe a 20% growth this year could be very possible for the company which means that it is trading at a very attractive valuation. It is also trading at a discount to its NAV of $0.23 per share. At the current price $0.175, this company looks like an absolute bargain. Good valuations, expansion into a good industry and an honest management. That is all I need to say.
Have a great trading week ahead!
Best,
SVI
Subscribe to:
Posts (Atom)
Posts
