Thursday, July 3, 2014

Chuan Hup and Hotung [Portfolio Buy] July 2014

I placed in limit orders this morning at the open on these 2 stocks which I have been looking at recently.

Hotung is an easy buy for me. At $0.149, it is was below its NAV of $0.292 as of the most recent quarter. It has $0.077 cash per share if I am not wrong too. This means it has plenty of cash on hand, more than enough for pay dividends for the next few years without any hiccups. It is a business with almost no debt also, that that's pretty good in my opinion.

Chuan Hup is also another asset play. NAV is at $0.41 while the stock is selling at $0.285. Margin of safety of 33%? Again I like it that is has just 13% debt compared to it's total assets. 33% of it's net assets is in cash too. Diversified business, but perhaps the only hiccup is that it's biggest holding, PCI does not look to be very profitable.

So, one stock selling at 49% discount and another one selling at 33% discount? They are both business without much smokes and mirrors either. Plus, they are sitting on a ton of cash on top of their discount! I hope that since I've bought these stocks at such a huge margin of safety that they will serve me well.

If not, that's okay. I would be getting paid 6.7% and 3.5% while waiting for them to realize their potential. Portfolio yield is now at 7.3%.

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