Friday, March 6, 2015

7 Counters With Fugly Charts

Anyway, being a contrarian, I love looking at fugly charts. Check out these bad boys if you're feeling up to it.


Advanced Holdings is trading at a sexy 30% discount to NAV. Perhaps it is because it is in the petrochemical industry? Based on their recent statement, their past quarter and past year had negative earnings. Tread with caution. I've actually met their COO before and he left a very decent impression on me, but of course he did not know who I was. I never probed about the company either, but I just thought it was an interesting bit of trivia to mention since it's on topic.


ARA Asset Management is a services company, so it stands to reason that their NAV has absolutely no use unless we believe that they will be liquidated. Instead, we have to turn to earnings. Full year EPS was 10.35, which gives a PE ratio of 15.2 at the current price. EV/EBITDA is 14.6. As good as a company that it might be, that sort of valuation doesn't turn me on and it would be a far way from being able to do so.


Food Empire is trading at an 18% discount to NAV, likely due to the fact that their assets are valued in USD and that the USD has been on a global gang rape as of late. Similar to Advanced Holdings, negative quarter and full year EPS. Tread with care.


Genting was a counter I talked about just a while ago. NAV premium and valuations based on earnings are not attractive to me yet, especially with all the fundamental headwinds that they face. I heard that they also have a lot of receivables from their highrollers outstanding. Is that true? Anyway, I don't think that their slip and slide is over yet.


Second Chance is actually sitting right on it's NAV now. A lot of air was let out of this counter when they couldn't spin off their properties. I always thought that their price was a bit elevated for me before. I don't know about others, but I have read up a lot about strata titled commercial property and I am actually very hopeful about them. Of course, most people scoff at strata titled commercial property. Less competition for me I suppose.


SingHoldings is selling at a pretty disgusting 43% discount to NAV, most likely because it is in the property business. Many other developers are also having deep discounts too, but SingHoldings have a pretty ugly chart. Their properties actually don't look too bad, but they haven't been doing too well.


ValueMax is actually the least ugly of the 3 pawnbrokers. EV/EBITDA under 5, oh come on how hard it is to sell me something like that?

In all honesty, these companies aren't horrible companies. There are many more companies out there with much more ugly balance sheets, fundamentals and valuations, but for some reason they aren't being treated as such. All I do is look out for ugly looking things and see if they are a buy.

Personally, I own Second Chance and ValueMax. For me, their price is right. Every time I see their charts, I feel like buying more.

If Genting and ARA Asset Management were at more attractive valuations, I wouldn't think twice about investing in them. If the fundamentals of the property market gets better, SingHolding would be a counter I'd look at again. If Food Empire and Advanced Holdings can turn a profit in the future quarters, I also wouldn't mind to look at them again.

Value investing is NOT only about buying ugly counters. I don't just sit around the dumpster all day and try to eat all the crap that I find.

Sure, some of the holdings that I have did not turn out perfect (China Fishery), while some get more ugly before they get better (New Toyo), but no one said it was going to work 100% of the time. Sometimes a piece of shit is really only worth a piece of shit.

9 comments:

  1. Hahahaha! Sometimes a piece of shit is really worth a piece of shit! Quote of the Day!

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    1. Thank bfgf, hopefully when I become a famous billionaire, people will use that quote, ahaha!

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  2. yongnam can join the gang of fugly too!

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    1. Yoma Strategic too! Quite a few more out there too actually, hehe. I skipped on those because I don't feel as knowledgeable about their business and history as I am with the rest.

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  3. Is Food Empire the one with a heavy dependence on Russia?

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    1. Haha yes Lizardo, Food Empire has a very high dependence on Russia, 58% of their revenues come from Russia alone! Contrarian play on the recovery of Russia and the stabilization of the ruble perhaps?

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    2. Need a strong heart to make such a contrarian plunge given other macro factors. But not unthinkable.

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