Spindex Industries - 5.6% Yield, P/E 6, 50% discount to NTA

[starbugs]

I recently saw this under-valued stock called Spindex.

Dividend yield 5.6% based on $0.25 share price
P/E ratio about 6
50% discount to net tangible asset

Very rare to find a low P/E stock paying good dividends. Caveat emptor please.

Comments welcome.

 

[addict951]

It's in electronics mfg right?
Bearish, no thanks

 

[bradputt]

manufacturing? still not in play yet.

will it ever be in play?

 

[starbugs]

This stock is for investors using fundamental analysis, not for speculators seeking to "play".

On another note, this is probably the better managed manufacturing companies. I would be happy to analyze the financial reports of better ones if you know of any.

 

[Mecisteus]

lol everyone will start buying when the sector is hot. right now electronics is bearish so no one bothers

thanks anyway i will take note of Spindex

may i suggest you take a look at Tai Sin

 

[starbugs]

Thanks for the heads-up on Tai Sin. I saw your post on CNA too.

I have taken a quick look at the latest quarter results and annual report.

Share price: 23.5 cents
NAV: 25.53 cents
PE: 9.7 (2009), 8.4 (2010 my own estimate)

+ve points:
Revenue growth before the recession is very impressive: 24% compounded
Gearing is low at about 36%
Dividend is 6.4%
Operating cash flow positive

-ve points:
Receivables and inventories form a large part of the balance sheet
Depends on Singapore for 77% of revenue
Lack of institutional investors (seems to be tightly controlled by a family)

I would say Tai Sin is a growth stock. Can also hold for the dividends. Growth is very correlated to the construction industry in Singapore. Not as compelling as Spindex though.

 

[koxinga]

I recently saw this under-valued stock called Spindex.

Dividend yield 5.6% based on $0.25 share price
P/E ratio about 6
50% discount to net tangible asset

Very rare to find a low P/E stock paying good dividends. Caveat emptor please.

Comments welcome.

I guess the question is whether they can continue to pay dividends at this rate. Based on SGX,it wasn't always 5.6% yield. Discount to NTA rather irrelevant as far as manufacturing companies is concerned as factories and equipment is needed and cannot be converted to cash readily.

Second, the type of business that spindex is in has low entry barrier. This as well as general weakness (eg. demand) will continue to dodge the manufacturing sector. Companies that can pay steady dividends normally has a business model where there is some unique form of competitive advantage, eg geographical, mono/duopoly, unique patents/tech, access to resources which other do not have.

 

[starbugs]

The dividend track record for Spindex is:

2007: 1.4 cents per share
2008: 1.5 cents
2009: 1.4 cents

Spindex has 18 cents cash per share and little debt.

 

[starbugs]

This stock rose 10% since I first posted a week ago.

Again, this stock is for medium to long term investors using fundamental analysis only. Collect dividends while you wait.

 

[starbugs]

China Precision Technology was recently taken private at 10X 2009 PE and 0.95X NAV.

Spindex is now just 7X 2009 PE and 0.6X NAV. 50% upside.

 

[milo]

I recently saw this under-valued stock called Spindex.

Dividend yield 5.6% based on $0.25 share price
P/E ratio about 6
50% discount to net tangible asset

Very rare to find a low P/E stock paying good dividends. Caveat emptor please.

Comments welcome.

Are you still holding or divested already?

 

[starbugs]

Are you still holding or divested already?

There is no reason for me to sell. This one is for keeps.

 

[starbugs]

Spindex’s 1H10 results are just out: click

Revenue increased 1% year-on-year and 71% compared to 2H09.
Net profit increase 10% year-on-year and 49% compared to 2H09.
Net cash per share increased from $0.180 to $0.186 even after paying $0.014 per share in dividend for FY09
Trailing PE is 5.6 and annualized PE is 4.7
Net tangible asset is now $0.4665 per share

Share price is just $0.235 (50% discount to NTA)

 

[strangerjun]

5 years now, fundamentally strong. Anyone in hwz vested?

 

[direbmem]

me! but 4000 shares only, for many years

 

[Perisher]

Me, a few months back before I restarted my portfolio. Now, no more...

 

[denn23]

havent looked at this.

care to share their customer concentration? (hope its not like UMS where its mainly 1 customer concentration)

 

[benart]

advise you to ignore this stock. it is too low volume means you buy higher price and hard to sell. it happened to me, bought when i was an employee of a can of worms at 70+ cents in 1999 before crisis plunged down to faraway less than half price. I was stucked until now 2016 just sold off all shares with still having few cents lost per share. Imagine at 1999 to 2000, a bowl fishball noodle only $2 but now $3.50 to $4 at my home. This means I have lost half of my money to money devalue, shares sold below few hundreds $ and this money can be paid towards my other loans which has interests. So I lost more 60% of my money and stucked for 17 years plus on this lousy stock. I have learnt my lesson well not to buy such a low volume stock. If you insist, you can compare this with their competitor Santak which has the same price value. Do not forget, this stock had climbed too high now, and the market now is very bubble. Usually as what I know it is only invested by people with relevant.

 

[Perisher]

Spindex vs Innovalue?

 

[wahkao3]

fresh highs
anyone vested?
TA+FA good. Low risk high return. Can buy. Buy liao can huat