Penguin International

Trading halt called today.  Not sure what kind of announcement.

(01-02-2021, 12:45 PM)Reenat Wrote: Trading halt called today.  Not sure what kind of announcement.

Just read the announcement in SGX.  The offerors crossed 30% threshold, so now MGO, Mandatory General Offer.  

Hope the IFA will ask them to increase the offer.

I hope they don't increase the offer so that not too many shareholders will sell. The offer by insider buyout will rarely be very attractive anyway in the abscence of competitors.
I still would like to be invested in a local shipbuilding company and I have not found much good ones left here. Used to be vested in Jaya during the recent buyout of their assets and becoming a shell. (I found at least 1 common ind director in Jaya and Penguin).

(01-02-2021, 12:50 PM)Reenat Wrote:

(01-02-2021, 12:45 PM)Reenat Wrote: Trading halt called today.  Not sure what kind of announcement.

Just read the announcement in SGX.  The offerors crossed 30% threshold, so now MGO, Mandatory General Offer.  

Hope the IFA will ask them to increase the offer.

It is not the IFA job (nor are they in any position to) to ask anything.

Their job is to evaluate if the offer is fair and reasonable. 

And make a recommendation to the independent members of the board of directors. (Not even directly to the shareholders!) So that the BOD can then just 'echo' what the IFA says and regurgitate everything back to the shareholders.

That's how things have always been done. A comedic song and dance routine costing possibly ten of thousands of dollars for ultimately a set of worthless recommendations.

(01-02-2021, 06:38 PM)lonewolf Wrote:

(01-02-2021, 12:50 PM)Reenat Wrote:

(01-02-2021, 12:45 PM)Reenat Wrote: Trading halt called today.  Not sure what kind of announcement.

Just read the announcement in SGX.  The offerors crossed 30% threshold, so now MGO, Mandatory General Offer.  

Hope the IFA will ask them to increase the offer.

It is not the IFA job (nor are they in any position to) to ask anything.

Their job is to evaluate if the offer is fair and reasonable. 

And make a recommendation to the independent members of the board of directors. (Not even directly to the shareholders!) So that the BOD can then just 'echo' what the IFA says and regurgitate everything back to the shareholders.

That's how things have always been done. A comedic song and dance routine costing possibly ten of thousands of dollars for ultimately a set of worthless recommendations.

I think IFA opinions are not worthless. Most of them can be used as case studies of bad practices in valuation haha (cherry-picking comparables, tweaking valuation inputs aggressively etc). I remember seeing some a few years ago that tried so hard to justify the offer, so much so that the whole document sounded really silly. When the going gets tough, they always resort to the usual reasons: low liquidity, opportunity for minority shareholders to exit, no visibility on future profits etc.

I do have my fair share of experiences of "low" offer, the most recent being Hopefluent. I am just sharing my lessons learnt and not meant to insinuate the merits / demerits of investing in Penguin.

I think if one invests in undervalued stks(e.g. low P/E, low P/B) in the hope to profit from better valuations, it is better to choose those stks with invested funds or parties with the resources to round up fellow retail investors to have the clout to make things count, e.g. reject the offer, etc.

In fact, I think the Private Equity way is a better approach to investing e.g. Novo Tellus(best example I know so I use here). Identify undervalued firms, take a stake enuff to get a board seat. From within, you can get in-depth knowledge of the firm, have the influence and can better realize the value from your investments. But I think it is more difficult to get into the PE firms(and the right ones) than identifying undervalued companies.

Otherwise, one can try to target "value-growth" stocks. Stocks that are trading at reasonable valuations but with growth potential(e.g. already successful brands going into China as a new mkt). These may not necessarily be super multi-baggers like Tesla but companies having a good chance to multiply their profits in the longer term. Of course, such stocks are much harder to uncover and I would think one must really have the real in-depth industry knowledge, i.e. know the company's competitors, know the company's mkts and customers well, etc and perhaps to the point of being able to stand up for an interview with the CEO for a company strategist position. However, such stocks may also be more susceptible to hit and miss, coz the future is always hard to predict and there are many uncertainties along the way.

(01-02-2021, 08:10 PM)dreamybear Wrote: I do have my fair share of experiences of "low" offer, the most recent being Hopefluent. I am just sharing my lessons learnt and not meant to insinuate the merits / demerits of investing in Penguin.

I think if one invests in undervalued stks(e.g. low P/E, low P/B) in the hope to profit from better valuations, it is better to choose those stks with invested funds or parties with the resources to round up fellow retail investors to have the clout to make things count, e.g. reject the offer, etc.

In fact, I think the Private Equity way is a better approach to investing e.g. Novo Tellus(best example I know so I use here). Identify undervalued firms, take a stake enuff to get a board seat. From within, you can get in-depth knowledge of the firm, have the influence and can better realize the value from your investments. But I think it is more difficult to get into the PE firms(and the right ones) than identifying undervalued companies.

Otherwise, one can try to target "value-growth" stocks. Stocks that are trading at reasonable valuations but with growth potential(e.g. already successful brands going into China as a new mkt). These may not necessarily be super multi-baggers like Tesla but companies having a good chance to multiply their profits in the longer term. Of course, such stocks are much harder to uncover and I would think one must really have the real in-depth industry knowledge, i.e. know the company's competitors, know the company's mkts and customers well, etc and perhaps to the point of being able to stand up for an interview with the CEO for a company strategist position. However, such stocks may also be more susceptible to hit and miss, coz the future is always hard to predict and there are many uncertainties along the way.

Private equity, on average, is a highly overrated asset class. PE firms often like to market themselves as creating value through strategic/operational intervention, but research has suggested otherwise. Empirical research has shown that private equity investors, on average, are no different from a public equity investor that buy cheap, small, and leveraged businesses. Once you account for these 3 factors, there's pretty much no excess return left for PE.

So basically, you can replicate PE returns by buying a basket of small-cap equities with low EV/EBITDA and some form of leverage. Note that I'm referring to the *average* PE firm: there's bound to be some superior PE firms that generate returns in excess of the 3 factors. Problem is, as you alluded to, it might be difficult to identify (ex-ante) who are the superior PE firms.

https://blogs.cfainstitute.org/investor/...o-clothes/

(01-02-2021, 07:48 PM)Corgitator Wrote: I think IFA opinions are not worthless. Most of them can be used as case studies of bad practices in valuation haha (cherry-picking comparables, tweaking valuation inputs aggressively etc). I remember seeing some a few years ago that tried so hard to justify the offer, so much so that the whole document sounded really silly. When the going gets tough, they always resort to the usual reasons: low liquidity, opportunity for minority shareholders to exit, no visibility on future profits etc.

My apologies. I probably should not be so harsh and quantify my statement a bit more eloquently. 

I agree that the IFA report is not worthless but it is mostly useless for shareholders.

But (like you), I always fascinated at the creativity employed in the report. A good reference for anyone looking into how to massage the data to present a more positive light or putting a positive spin into almost anything. 

It is a useful skill for those who need to write recommendation/justification papers and the like in their work.

PIL
22 Jan (Fri) 4,786.200 @65cents
25 Jan (Mon) 2,178,100 @65cents
26 Jan (Tue) 3,311,400 @65cents
27 Jan (Wed) 4,036,900 @65cents
28 Jan (Thu) 1,607,800 @65cents
29 Jan (Fri) 1,732,100 @65cents
1 Feb (Mon)  787,500 @65cents 30.07% *halted about 10.06AM
2 Feb (Tue) 3,144,900 @65cents 31.50%
https://links.sgx.com/FileOpen/Project%2...eID=647107



Stay home and stay healthy, everyone.

(02-02-2021, 08:50 AM)lonewolf Wrote: It is a useful skill for those who need to write recommendation/justification papers and the like in their work.

Thank you lonewolf for the nice recommendation.

Other than that, I have been throwing away those booklets since i don't need IFA when buying a stock so why do i need one when selling.