Wednesday, April 22, 2015

[SGX Portfolio] Valuetronics or Expensivetronics? 70% in 6 months!

Wa, really keep going up ar? SELL!!!!

I bought Valuetronics almost exactly 6 months (and a week) ago for a fantastic price of just $0.30 a share. From my analysis back then, I thought Valuetronics was an unbelievably flashing buy. I was only hoping that it would go even lower so that I could totally back up the truck. At $0.26, I would be paying $1 for every $1 they had in their bank and getting the entire business free.

Just two months ago I did a follow up on Valuetronics again. Share price had gone up to $0.45 in just 4 months representing a massive 50% capital gains. I was debating with myself if I should take my money off the table and leave, or if I should continue sitting tight and see where we end up.

Today, the share price hit a high of $0.51 and I decided to throw it in. I'm cashing my chips out and walking away with a massive 70% gain over 6 months.

I know it's not a great way of finding calculating EV/EBITDA, but I'm hella lazy to calculate the ttm figures. Anyway, valuations are for the gist of things, I don't operate based on rules and arbitrary numbers.

When Valuetronics was priced at its peak back in late July last year, it's EV/EBITDA was 7.64 and it was trading at a pretty huge 87% premium over NAV.

When I bought Valuetronics in October, it's EV/EBITDA had dropped to 5.65 and it was selling at a nice 10% discount to NAV. Definitely a value stock by any standard at that point of time.

Today Valuetronics is trading at EV/EBITDA of 6.88 and it has a premium of 43% over NAV.

Perhaps I am selling too prematurely, but judging by it's own stock's history, it was not much higher where it faltered the last time around. It's ascent is too fast and too furious for me to handle. Dammit. I would rather hold this stock with it's high dividend yield and modest capital gains for as long as I can. Why does it have to sky rocket away from me like that? Damn all you Valuetronics investors that ran up my price! How is a value investor like me supposed to get by?

It's no secret that I'm probably one of the most bearish people out there yelling that the sky is falling. However, that sentiment is aimed towards the US markets and probably Europe. Even though I really don't think that the local markets are overvalued, the fallout of those economies will have global effects and they would not be localized.

I've been on a selling spree lately. What's wrong with me? If the stock market keeps going up, I might not have anymore stocks left to sell!

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