Entered a new Australian mining/industrial/resource net-net. Discounting an earlier dividend from the balance sheet I entered at 66 % of NCAV (ie 1.47 AUD).
As with most companies trading at big discount to net current assets Coventry has it’s share of problems. F-score is at the lower-end (4). Blanace sheet is cash rich and mangament is implementing a stragetic review. At the current brun-rate I expect the company to last quite a while, It may be a bumby ride though.
The depressed HK markets triggered another buy, this time PC Partner Group. PCP is an OEM of computer parts, especially graphics cards. They’ve actually manufactured the graphics card (Zotac card) on the very PC I’m writing this.
PCP is trading at 0.42 NCAV. I see three reasons the company has such a depressed valuation.
- Personal computers are in decline
- They are tied up in litigation
- Asset/liabilities ratio is not very good.
Interestingly PCP has had a good run over the last years due to a graphics card boom, due to bitcoin mining. However, now the bitcoin miners have turned to other solutions – such as custom integrated circuits.
How about a manufacturer of CD and DVD discs? Apparently demand for discs has not decreased as much as one (I) would expect, Swing seems to be doing pretty well.
I am a bit concerned about the historical share increases and swelling working capital, but I find it offset by stable margin and pretty good balance sheet.
Entered at P/NCAV 0.35.
I have put some of the proceeds from sale of Hengxin in Oriental Watch Holdings. Oriental is in the business of luxurious watches. They have a flag ship store in Hong Kong and some other stores across Asia. The business has slowed quite a bit during the last year but the balance sheet is strong. They also seem to have some control of cost, which is important as fixed costs and inventory write-downs have killed many net-net retailers before.
On the plus-side Oriental seems to be a shareholder friendly company with a good history of dividends.
Entered at @ P/NCAV of 0.43.