Second Chance   

good divident yield

good to see Sec Chance on the verrrrge of a breakout.

my other fave, Best World, is up 1 ct. Long Q to buy, suggesting a possible breakout will take place soon.

Such a fundamentally great business , with strong operating cashflows to rival Sec Chance,



best world continues to have prospects of high profit growth and low capex ....which will translate into higher & higher dividends. Feb 14 announcement of results will be eagerly awaited.

 

why will there be a blastoff in the coming weeks? I thought it has given out the dividends?

 

hi victorian, what a great and useful analysis! I'm vested becos of low PE and good dividend. You can't get this type of return from FD. Keep up the good work, we love it. thanks!

 

nice work victorian. thanks for the insightful analysis of this counter.

 

victorian, nice work again!

but tell me what's yr forecast EPS?

 

victorian, i am sure if you took a closer look at Best World, you'll like what you see.

1. Profit growth has been fantasic -----> it's the first strong sign of a biz that's wonderful for whatever reason.

FY03: Net profit was $3 m (up 165%)

FY 04: Net profit was $5 m ( up 69%)

FY 05: Net profit $8.5 m ( up 68%)

H1 '06" Net profit $5.7 m ( up 32%)


2. Cash flow: this is very beautiful, with operating cashflow almost matching net profit through the years.

FY03: Net profit was $3 m 
net cash from operations was $3.6 m

FY 04: Net profit was $5 m

net cash from ops was $4.8 m 

FY 05: Net profit $8.5 m

net cash from ops was $5.6 m

3. Net profit margin: consistently at around 16-18%. This is a very laudable margin.

4. Growth in the next 3 years: the exec director has announced that growth will be at least 30% p.a. in the next 3 years.

I don't agree with anyone who suggests that the announcement is merely to provide support to the stock price. Surely, there must be solid reasons for making such an announcement. For one thing, if u look at the schedule best world has for entering new markets, you know they have action in mind.

as for yr point, granted the price/book is high, but hey, this is not an asset-intensive biz. It's asset-light, capex-light.

The results announcement will be on Feb 14. we are just weeks away from what i think will be a turning point in how the market will rate this stock. if a PE of just 10 is accorded, the stock is worth about $1 (compared to 74.5 cts today).

I believe it's worth at least 15 x becos of its great track record and the high chance of continuing to deliver the best of results.

 

tks Victorian, for sharing your experiences..

 

I already own second chance, Would people interested in FA recommend some more good value stocks like second chance.

My other holdings are bright world and the STI ETF.

I usually prefer illiquid stocks with ROE > 15% , dividend yeild >2% and no debt.

 

Victorian,

Good insights in 2nd Chance. Am new to stock mkt and would like to know if there are good references to analysing FAs of a company?Where to get such info and which indicators (such as ROE, P/E, Mcap etc) do FAists use in their analysis to determine if a counter is undervalue...Understand that ChinaFlex is cash rich and undervalued..

 

Hello victorian...



I must say I take my hats off to you for making such detailed analysis and giving us such a meaty piece of posting to chew on. I can see you have expended much effort... :)



I expect this stock to trade sideways around it's current level for many sessions more, maybe lower than now.

 

great analysis, victorian. it's v much in sync with my own.

hv one stock to ask u abt : best world international.

it looks great on all metrics too - roe, pe ratio, cashflow and, most impt, future growth prospects.

hv u taken a look at it? or are u already in it?

lots of postings at CNA and this forum. cheers

 

volumes still quite weak, but u never know when it may suddenly break out like seksun. may need to hold a bit longer. about 2-3 mths

 

Singaporegal any comments on this counter?

 

Hi victorian,

I don't use patterns like head and shoulders. I rely more on trend analysis than on identifying patterns.

From what I see on 2nd chance, this counter has low volumes and is a penny stock. So TA may not be entirely accurate. Signals are now mixed for this one.

 

Up 1 cent today. 5 cents since Nov 17 ex Div.  Uptrend is gradual. and very promising. Can't imagine how the breakout will be when it comes.

 

Reading the charts, it's definitely sideways for a while as its in accumulation phase and waiting for 1st half results to confirm whether new biz growth area  is reaping what the management is forecasting double digit growth in top line and bottomline.

Vested since September. Very encouraging to see the counter trending upwards even after its bumper 3 cent dividend ex-d in mid Nov. From high of 33.5 cents to ex-d 27.5 to now 31 cents. Counter is very tighly held hence volumn

PE ratio a low 7xs, Forward EPS almost 5cents, gross margins 30%, P&L at halftime should come in at $7m, up by $2m, ROE is in the double digits, price to NVA 1.2. dividend yield 10%. Operating positive cashflow is almost $10m annual for the last 2 years. 

In terms of earnings, it is earning hell of lot of money and free cash paring down debt fast. Its earnings is much more than what it was 3-4yrs ago but not reflected in the share price.

Unless the founders do a placement of shares to increase liqudity, high vols would be in the region of 0.5m-1m daily for prices to rise significantly hence TA is tough on this counter as it's in uncharted territories as earnings does not reflect its true value. Its a fundamental play if one wants to sleep easy at night esp these 2 years with fantastic yield of 10% which mgt has commited for 2007 and 2008.

 

Lousy volumes so TA may be inaccurate ..... but from charts, I think it would either be stagnating or downtrending.

 

Was at the AGM at 2nd chance in October last year and they sure was lots of auntie and uncles there as shareholders there. Almost 50-60 of them as I counted. They sure were educated as they asked the CEO , Salleh lots of questions. 

 

Previously, many aunties and uncles did not receive alot of education.  Nowadays, the new lot of aunties and uncles are educated people....

 

Do you know of such uncle, aunty?

But uncle, aunty will have more time to analyse than me as too tight withup with the jobs.

Sign!!