11th consecutive quarter of double-digit yoy profit growth. Bottom line would have been stronger if not for a S$1.1m forex loss and S$0.6m allowance for doubtful debts.
Action remains attractive, at 3x CY11 P/E and below its book value. Our target price remains S$0.40, offering more than 100% upside. This already conservatively pegs Action at slightly below 6x CY11 P/E. [url=http://www.nextinsight.net
/story-archive-mainmenu-60/903-2010-/3164-action-asia-what-analysts-say-now]ACTION ASIA, SATS: What analysts say now....[/url]
To find the answer for Erelation.s question, it is helpful to look into the background of Asian Asia.
Action Asia’s 399 million shares were listed on 15 Jan 2004. Its IPO price was 31 cents. It made a nett profit of S$6.9 million in FY 04 & incurred small losses in FY 05 & 06. Since then, its nett profits have been on a steady up trend. Its share price, which has been languishing at below 22.5 cents ever since 2005, hit a high of 22.5 cents in April 2010 and then went into a consolidation phase between the range of 16 to 21.5 cents.
Looking at its Balance Sheet, Action Asia certainly looks a great buy with its very low PE of about 3x and its improving profitability over the last few years. CIMB has a target price of 40 cents for the stock notwithstanding certain key concerns that include: (1) continuous weakening of US$ as bulk of its sales are quoted in US$; (2) more aggressive bidding by some domestic consumer electronics makers that may affect Action in terms of pricing; and (3) limited growth potentialmoving forward if the group continues to depend heavily on Philips’ portable DVD players. The company looks set to report its best ever results since its IPO. Its share price has also firmed up over the last few months prompting 2 of the insiders (probably very tired shareholders dying to come out) to unload a portion of their holdings – Lien Chien-Liang 27 Sep 2010 – Sold 147,000 shares at 20 cts 11 Nov 2010 – Sold 353,000 shares at 21 cts 30 Dec 2010 – Sold 5,000 shares at 20.5 cts 4 Jan 2011 – Sold 47,000 shares at 21 cts
Balance 50,000 shares Lai Pin Yong 4 Jan 2011 – Sold 52,000 shares at 21 cts 5 Jan 2011 – Sold 200,000 shares at 21 cts 6 Jan 2011 – Sold 900,000 shares at 21 cts --- Balance 23,938,910 shares (6%) [Source: SGX Listed Company Announcements]
Insiders’ selling often have a dampening effect on the share price of a stock but the real concern for retail investors comes when the selling takes place immediately after a sharp run up in the share price causing the stock to be fairly valued or over valued.
Great Analysis! I was thinking to buy earlier but notice that the insider are selling and scrap the idea.
Observer2,what is your thought on Ziwo? The shares went above 40 cents and fall sharply back to 34 cents today.
