Straco -- gem?

yeng
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10 years 11 months ago #13833 by yeng

Replied by yeng on topic Straco -- gem?

Straco is an under-appreciated gem but its organic growth is a tad too unexciting for many investors. Still, the shares touched 31.5 cents today -- probably in view of the upcoming X-dividend.

The following user(s) said Thank You: pine

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stranger
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10 years 11 months ago #13834 by stranger

Replied by stranger on topic Straco -- gem?

Did anyone here attended the AGM last week? Would appreciate a summary on what was asked and your view on future prospects. tksngsicsm

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pine
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10 years 11 months ago #13969 by pine

Replied by pine on topic Straco -- gem?

It's a shockingly positive 1Q result with net profit of S$5,645,000 compared to S$1,875,000 a year earlier.

A few exceptional items contributed:

1. Other income of $0.65 million from the disposal of a Land Use Rights to the local government.

2. Administrative expenses decreased mainly due to a foreign exchange gain of $0.61 million.

Taking away these 2 items, profit before tax would have been $6.52 million, an increase of 75% compared to 1Q2012.

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zane
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10 years 11 months ago #13977 by zane

Replied by zane on topic Straco -- gem?

Up 5.2% ----> 30.5 cents. What's a fair value for this counter? Anyone?

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zane
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10 years 11 months ago #13999 by zane

Replied by zane on topic Straco -- gem?

Straco now has S$101 million cash in the bank. Does anyone know what they will do with it?

The stock price is getting higher. 32 cents last I checked

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yeng
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10 years 11 months ago #14007 by yeng

Replied by yeng on topic Straco -- gem?

Straco has gone up as I had expected and it truly deserves a rise. Its market cap is S$269 m currently (stock has reached 33 cents).

Take away the S$101 m in its bank accounts and you get S$169 as the market value accorded by Mr Market.

Next, consider that last year, Straco earned nearly S$20 m in net profit.

So the PE (ex-cash) is just 8X.

This is a steal for a business that is not only highly profitable but generates tremendous free cash flow.

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