2nd Chance Properties

(28-09-2012, 11:09 AM)CityFarmer Wrote: I should be kicking myself for selling too early for 2017 warrants

The 2017 warrant's value lies with its mother share. The warrant is only exercise-able in 2015.

IMO, Mr Market has valued it @ 7 cts now which is obviously over-valued

dont need to kick yourself la, i sold it at 3.3 cents or something, i m the biggest loser...

(28-09-2012, 11:09 AM)CityFarmer Wrote: I should be kicking myself for selling too early for 2017 warrants

The 2017 warrant's value lies with its mother share. The warrant is only exercise-able in 2015.

IMO, Mr Market has valued it @ 7 cts now which is obviously over-valued

Its not overvalued because the warrants has a long expiry date.

(28-09-2012, 12:56 PM)propertyinvestor Wrote:

(28-09-2012, 11:09 AM)CityFarmer Wrote: ...
IMO, Mr Market has valued it @ 7 cts now which is obviously over-valued

Its not overvalued because the warrants has a long expiry date.

yeah, you are probably right, i should have discussed with you first before selling my warrants

(28-09-2012, 12:56 PM)propertyinvestor Wrote:

(28-09-2012, 11:09 AM)CityFarmer Wrote: I should be kicking myself for selling too early for 2017 warrants

The 2017 warrant's value lies with its mother share. The warrant is only exercise-able in 2015.

IMO, Mr Market has valued it @ 7 cts now which is obviously over-valued

Its not overvalued because the warrants has a long expiry date.

long expiry date = larger value?

no offend, just don't get the logic

If the warrants expire in 2017, then I think you should hold them till about 2016 before selling. I read somewhere that if you adopt a buy-and-hold strategy, the chances of you making money is signficantly higher than buy-fast-sell-fast.

The same might work for warrants too.

I love 2nd Chance properties. Bought heavily into this counter in 2006. I collected my capital back this year just solely on dividends and selling off the warrants. I think I am one of the few investors who opt for cash dividends.

(28-09-2012, 02:30 PM)CityFarmer Wrote:

(28-09-2012, 12:56 PM)propertyinvestor Wrote:

(28-09-2012, 11:09 AM)CityFarmer Wrote: I should be kicking myself for selling too early for 2017 warrants

The 2017 warrant's value lies with its mother share. The warrant is only exercise-able in 2015.

IMO, Mr Market has valued it @ 7 cts now which is obviously over-valued

Its not overvalued because the warrants has a long expiry date.

long expiry date = larger value?

no offend, just don't get the logic

For Warrants, there's a term known as Time Value ie. the Longer time to Expiry, the larger the Time Value. From my limited knowledge, I know there're valuation methods that can be used and the most common one is using Black-Scholes Model or it's variant. Can read more in investopedia.

(29-09-2012, 09:29 AM)KopiKat Wrote:

(28-09-2012, 02:30 PM)CityFarmer Wrote:

(28-09-2012, 12:56 PM)propertyinvestor Wrote:

(28-09-2012, 11:09 AM)CityFarmer Wrote: I should be kicking myself for selling too early for 2017 warrants

The 2017 warrant's value lies with its mother share. The warrant is only exercise-able in 2015.

IMO, Mr Market has valued it @ 7 cts now which is obviously over-valued

Its not overvalued because the warrants has a long expiry date.

long expiry date = larger value?

no offend, just don't get the logic

For Warrants, there's a term known as Time Value ie. the Longer time to Expiry, the larger the Time Value. From my limited knowledge, I know there're valuation methods that can be used and the most common one is using Black-Scholes Model or it's variant. Can read more in investopedia.

Back to the 2013 warrants, I am sure the exercise rate will be very high. With the money from exercise, company could be debt free.

A good or bad idea to be debt free? Company seems wary of retail properties recently judging by the putting of some units on sale.
How will the lower rental base coupled with larger shareholders base (from the conversion of 2013 warrants) affect the dividend payout in future?

hmmmm...

Vested

(29-09-2012, 09:29 AM)KopiKat Wrote:

(28-09-2012, 02:30 PM)CityFarmer Wrote:

(28-09-2012, 12:56 PM)propertyinvestor Wrote:

(28-09-2012, 11:09 AM)CityFarmer Wrote: I should be kicking myself for selling too early for 2017 warrants

The 2017 warrant's value lies with its mother share. The warrant is only exercise-able in 2015.

IMO, Mr Market has valued it @ 7 cts now which is obviously over-valued

Its not overvalued because the warrants has a long expiry date.

long expiry date = larger value?

no offend, just don't get the logic

For Warrants, there's a term known as Time Value ie. the Longer time to Expiry, the larger the Time Value. From my limited knowledge, I know there're valuation methods that can be used and the most common one is using Black-Scholes Model or it's variant. Can read more in investopedia.

Thanks for the info.

I am not in warrants since day 1 in investment, should be helpful to learn more on it.

Instead of plug-in all numbers into Black-Scholes Model's formula, and crunch out a number which i have no confidence on, i will rather try the following "non-academic" model.

I will not use the Black-Scholes Model's formula, but its concepts are well-accepted.

The value of the warrant lies with market price of the company share. The share price within the maturity period lies on few factors
- Outstanding share growth by remaining 147 millions 2013 warrants and scrip dividend scheme annually
- Equity growth by dividend re-invested annually, retained profit and new fund from exercising of warrants

For simplicity, assume the following
- Earning yield flat throughout the maturity period, with dividend yield flat on 8%, and 6% are re-invested via scrip dividend annually
- The remaining 147 millions 2013 warrants are exercised by end of FY2012, thus bring in $47 millions into the equity
- PB ratio remain flat @ 1.2 throughout the maturity period
- Equity grows @ 10% throughout the maturity period, due to re-invested dividend and retained profit

So at end of FY2012, with new fund from 2013 warrants, the equity is $203 millions with 701 millions share outstanding, thus priced @ $0.39 with PB of 1.2

By the end of maturity period i.e. FY2017, the equity grows to $370 millions. The outstanding share grows to 938 millions share due to script dividend. Thus bring the market price of $0.47 with PB 1.2

2017 warrant's strike price $0.4, with current warrant priced at 7 cents, effectively need market price above $0.47 to be in the money.

I admitted that the model is over-simplified, but should be realistic.

IMO the value of the warrant should be within 5-6 cents to be reasonable

Any comments welcome.

3.8 cents dividends declared !

http://info.sgx.com/webcoranncatth.nsf/V...B003B9CD9/$file/SCPL_FullYearFinancialResultsForThe14MonthsEnded31Aug2012.pdf?openelement [SGX Announcement]

http://info.sgx.com/webcoranncatth.nsf/V...B003BEBE8/$file/SCPL_PressRelease_18_October_2012.pdf?openelement [Press Release & FAQ]

(Not Vested)