Time flies and where are we now?

My god, time really flies. It seems like forever when I last wrote a post on this blog. It is not because there is nothing to say but time has not permitted me to do so.

I had a close friend ask me recently, why have I not written up on any stocks recently. I told her, good stocks are hard to come by and that we should only come out with them as an when they pop up.

Patience is a key virtue for investing. This applies to picking stocks and also waiting for a stock to perform. Remember, identifying stocks that have value and quality is the easy part. Having the patience to wait for it to deliver its value is the hard part.

Lets review my picks so far. Ziwo has done well, the performance for the stock has been decent, hitting past 40 cents since my call but the market pull back has stifled its performance. Results were pretty decent, so this is one to keep on the screen.

Trumpy Dragon...yes..my personal favourite. Reporting poor results over the weekend, a steep fall in revenue and profit. Do I still like it? Do I still have conviction...what do you think? I still believe in this counter because it has a vision. Stock has been stuck at 70 cents for a few weeks now. It may even fall below 70 cents, but remember, a pull back is a buy signal for those that has not gotten in since the beginning. Festive season is coming, alcohol consumption should pick up. Company is looking to move into more medium range products which will cater to the growing middle class in China. Rationalisation of brands and range of products may allow the company focus more on their branding and marketing. The future of this firm will be determined mainly by their acquisition going through.

Reyoung has been so well held at 30 cents, makes me have even more conviction that something is happening to it. Pay attention to this one. Results were also very decent.

Lion Asia Pac has not done that well, that is because they have been dragged into a bidding war for Polaris metals. But the value of the stock is still firmly there. So the downside is very very limited from here. I still stand by this call firmly. Remember patience?

So anything new? Do keep a look out for ONAV Omega Navigation. I like this stock for its value, a small cap with a very strong book value. Waiting for it to report earnings soon, do not expect them to deliver huge profits but it will be interesting to see if they are able to obtain financing for their oil tankers. US$3.72 looks like a bargain.

Like I said before, the rally was not over....I am right again on this. The USD weakness is fueling the market and that is something that will come back to haunt us in the future. But sticking to value will prevent you from getting burnt too badly should the market turn around suddenly. However, ride this rally as long as you can because the risk is on the upside and not on the down.

I promise I will try to write every week but a lot depends on the boss...hahaha

Take care and do feel free to post questions for me. Any stocks which you need an opinion on.

Best,

SVI

Young? Or ReYoung? $0.29

Its me again. Finally after completing a very big project in my thankless job, I am finally able to find time to look at a stock which has been on my shortlist for some time. It is rather unfair that I did not manage to make the call at a lower price because I have been meaning to do so.

Many people are very worried about the current sell down and they are calling me all the time to ask if this is the end of the rally for the year. From my experience, as long as there is skepticism the market will defy it. Is the rally over? Nope. Is there going to be weakness? I think so.

I am not going to reveal how much conviction I have in this rally because I may be committed to an asylum if I told anyone. But I have my own reasons for believing in it. All I can ask for is for you to believe in me.

Ok now to the stock in mind, Reyoung Pharma. I know...many of my friends think that I like to find needles in a haystack. Why can't I just buy stocks that are hot? Novena? Biosensors? Haha. I am like that. I do not like what is popular. I like things that are obscure.

Reyoung is engaged in the manufacture and sale of pharma products and personal hygiene products for women and infants. This is one of the few pharma companies left listed in Singapore. Gone are those like Sihuan and Asiapharm. This is one company that is still trading at a cheap price. It has quietly been bought up over the past 2 weeks. Just go look for yourself. Low volume and not many sellers.

The company generates good positive cash flow and sits on good cash levels. It is leveraged but gearing levels are comfortable. For the first half of 2009, the company made 1.44 cents. That is a potential 10 times p/e which is very reasonable for a Chinese Pharma company.

What I like is not the medicinal business segment for the company, but more of the personal hygiene side of its business. I have to say I love consumer staples and to me nothing is more beautiful than stable recurring income.

The fact that the company bought back almost 20 million shares at 11-12 cents and placed them as treasury shares was even more impressive. Buying back shares at such low prices has helped to raise the company's EPS and benefited its shareholders.

Company is still trading below its book value of 31 cents and that makes it attractive to me. A company that trades below its asset value, highly profitable, strong operating cashflow, manageable leverage and lastly a defensive business.

It could be the next pharma stock to be taken private. Look at the performance of the chinese pharma stocks, Sihuan taken private, Asiapharm bought by private equity, Tianjin Zhongxin doubling...So could Reyoung be the next one?

We shall see.

Best,

SVI