Powermatic Data Systems has long been a darling of some value investors. The stock's undervaluation has been primarily owing to
| 1) its freehold investment property that has appreciated, 2) its cashpile (with zero debt) and 3) its growing wireless connectivity business. |
Basically, its $35 million of cash and the $35 million market value of the property (as of end-FY19) add up to the current market cap of the company.
So, the market has ascribed zero value to its thriving operating business, which generated $7 million net profit in FY19 on $21 million of revenue.
See AGM presentation material here and NextInsight's past articles (links at the bottom of this page).
 Executive director Katherine Ang and executive chairman Dr Chen Mun at the FY19 AGM. NextInsight file photo.Powermatic Data this evening announced a positive profit guidance with respect to its upcoming financial results for the half year ended 30 September 2019. "The Board expects the 1HFY2020 Results to show a significant improvement in profits as compared to the profits recorded in the corresponding period of the previous financial year." The company will announce its 1HFY2020 results on or around 7 November 2019. |
|
Stock price |
$1.99 |
|
52-week range |
$1.38 – $2.00 |
|
Market cap |
S$70 m |
|
PE (ttm) |
9.95 |
|
Dividend yield* |
4.0% |
|
Year-to-date |
34% |
|
Shares outstanding |
34.95 m |
|
*Includes special dividend |
|
In addition, the Board announced that it is reviewing the capital structure of the Company (including options relating to the Company’s property at No. 7 and 9 Harrison Road Singapore 369650 / 369651) which may or may not involve a capital reduction.
The Company has engaged professionals to advise the Board on the review.
"The review is still ongoing and is at a preliminary stage, and the Company has not made any decision with respect to, and has not entered into any agreement for, any possible transaction, at this juncture."