UMS Holdings

(12-06-2014, 09:47 AM)CityFarmer Wrote:

(11-06-2014, 11:22 PM)Nick Wrote: Many great points have been raised by fellow buddies in this thread especially recently with discussions on its business model, customer's intentions, macro outlook etc. Personally, I didn't find Andy's sale to be perplexing since I have seen him sell in great volume in the past while the business carried on steadily. But AMAT sale is different since it is unprecedented. I initially purchased UMS with the knowledge that with AMAT as a SSH, it implies that it has confidence in its subcontractor ability to deliver and the partnership is unlikely to be disrupted. With the stake sale, this premise no longer holds true - I am not saying that AMAT definitely has no more confidence in UMS but rather I cannot say that it definitely does. The fundamentals is no longer the same (to me) - there is an element of uncertainty as Specuvestor wisely wrote about. I did reduce my stake yesterday after contemplating about this. I am penning this now to avoid any hindsight bias but I do wonder will I regret parring down my stake when the dust settles (foresight bias ?) haha ! I hope the Board will issue a similar clarification like in 2012 to reduce this element of uncertainty.

(Vested)

IMO, the decision is rational, no matter the outcome. Buy base on a story, and reduce when story no longer fully valid.

I did read thru the previous posts, and preliminary research. I agree the fear on Andy disposal is unwarranted with his record. Mr. Market's fear should be mainly from AMAT disposal.

How bad is the (likely) damage from AMAT? Hm...

somehow UMS too depends on Andy and AMAT... we can assume may be 90% of revenue or profit generated under their stewardship.. Andy share sale when price is right, depress the stock a lot, thus giving a very good valuation for us who based on value investing.. for season investors it's nothing to be concerned but for those who bought based on growth and dividend yield may be very disappointed that their profit just wiped out like this.. a good play for us is we should sell on cum bonus and buy back now.. based on Graham strategy?


since Andy will continue selling in certain time, we can roughly buy when he sells, and sell when the price pop up until Andy finish selling all his stake.. :p

(12-06-2014, 06:43 AM)HitandRun Wrote:

(11-06-2014, 10:41 PM)CityFarmer Wrote: This stock isn't in my latest shopping list, but its quality deserve my attention...

Cityfarmer san

What do you reckon is a good bottom fishing level?

The things I am sure are
- This is a good company, with good management, and a viable business model. As specuvestor said, those fundamentals wouldn't change over short term
- Positive market outlook, both from sector perspective, and from CEO message
- Andy's disposal is overly concerned

What I am not sure is the likely impact on PnL with AMAT disposal.

What is the TP? I will post it once I have the answer, AND after I have bought enough

(12-06-2014, 10:00 AM)CityFarmer Wrote:

(12-06-2014, 06:43 AM)HitandRun Wrote:

(11-06-2014, 10:41 PM)CityFarmer Wrote: This stock isn't in my latest shopping list, but its quality deserve my attention...

Cityfarmer san

What do you reckon is a good bottom fishing level?

The things I am sure are
- This is a good company, with good management, and a viable business model. As specuvestor said, those fundamentals wouldn't change over short term
- Positive market outlook, both from sector perspective, and from CEO message
- Andy's disposal is overly concerned

What I am not sure is the likely impact on PnL with AMAT disposal.

What is the TP? I will post it once I have the answer, AND after I have bought enough

I too believe this is a good company with good management. However, if AMAT selling down their stake were to signify them not using UMS as a supplier as well, UMS would be affected quite badly since they only have this one client?

(vested)

(12-06-2014, 09:47 AM)CityFarmer Wrote:

(11-06-2014, 11:22 PM)Nick Wrote: Many great points have been raised by fellow buddies in this thread especially recently with discussions on its business model, customer's intentions, macro outlook etc. Personally, I didn't find Andy's sale to be perplexing since I have seen him sell in great volume in the past while the business carried on steadily. But AMAT sale is different since it is unprecedented. I initially purchased UMS with the knowledge that with AMAT as a SSH, it implies that it has confidence in its subcontractor ability to deliver and the partnership is unlikely to be disrupted. With the stake sale, this premise no longer holds true - I am not saying that AMAT definitely has no more confidence in UMS but rather I cannot say that it definitely does. The fundamentals is no longer the same (to me) - there is an element of uncertainty as Specuvestor wisely wrote about. I did reduce my stake yesterday after contemplating about this. I am penning this now to avoid any hindsight bias but I do wonder will I regret parring down my stake when the dust settles (foresight bias ?) haha ! I hope the Board will issue a similar clarification like in 2012 to reduce this element of uncertainty.

(Vested)

IMO, the decision is rational, no matter the outcome. Buy base on a story, and reduce when story no longer fully valid.

I did read thru the previous posts, and preliminary research. I agree the fear on Andy disposal is unwarranted with his record. Mr. Market's fear should be mainly from AMAT disposal.

How bad is the (likely) damage from AMAT? Hm...

Could this just a case of AMAT selling some shares to lock in the gain? With the bonus shares being issued, this may bring the ownership back to 5% again? If this can be calculated to be the case, it would ease a lot of fear and speculation.

(12-06-2014, 10:08 AM)eve Wrote:

(12-06-2014, 09:47 AM)CityFarmer Wrote:

(11-06-2014, 11:22 PM)Nick Wrote: Many great points have been raised by fellow buddies in this thread especially recently with discussions on its business model, customer's intentions, macro outlook etc. Personally, I didn't find Andy's sale to be perplexing since I have seen him sell in great volume in the past while the business carried on steadily. But AMAT sale is different since it is unprecedented. I initially purchased UMS with the knowledge that with AMAT as a SSH, it implies that it has confidence in its subcontractor ability to deliver and the partnership is unlikely to be disrupted. With the stake sale, this premise no longer holds true - I am not saying that AMAT definitely has no more confidence in UMS but rather I cannot say that it definitely does. The fundamentals is no longer the same (to me) - there is an element of uncertainty as Specuvestor wisely wrote about. I did reduce my stake yesterday after contemplating about this. I am penning this now to avoid any hindsight bias but I do wonder will I regret parring down my stake when the dust settles (foresight bias ?) haha ! I hope the Board will issue a similar clarification like in 2012 to reduce this element of uncertainty.

(Vested)

IMO, the decision is rational, no matter the outcome. Buy base on a story, and reduce when story no longer fully valid.

I did read thru the previous posts, and preliminary research. I agree the fear on Andy disposal is unwarranted with his record. Mr. Market's fear should be mainly from AMAT disposal.

How bad is the (likely) damage from AMAT? Hm...

Could this just a case of AMAT selling some shares to lock in the gain? With the bonus shares being issued, this may bring the ownership back to 5% again? If this can be calculated to be the case, it would ease a lot of fear and speculation.

I thought bonus shares will not affect the percentage, since all shareholders increase their holdings by the same amount.

I missed this share last year at 50 cents and I watched with amazement after the bonus issue when the price dropped from 70+ cents (adjusted after bonus) to 55 cents in 1 week time.

I want to invest in this company but am concerned on the insider's selling. Is it normal for the CEO to offload such a huge amount of shares?

Since there is nothing wrong fundamentally, will the share price goes up after he stops selling?

(12-06-2014, 10:08 AM)eve Wrote:

(12-06-2014, 09:47 AM)CityFarmer Wrote:

(11-06-2014, 11:22 PM)Nick Wrote: Many great points have been raised by fellow buddies in this thread especially recently with discussions on its business model, customer's intentions, macro outlook etc. Personally, I didn't find Andy's sale to be perplexing since I have seen him sell in great volume in the past while the business carried on steadily. But AMAT sale is different since it is unprecedented. I initially purchased UMS with the knowledge that with AMAT as a SSH, it implies that it has confidence in its subcontractor ability to deliver and the partnership is unlikely to be disrupted. With the stake sale, this premise no longer holds true - I am not saying that AMAT definitely has no more confidence in UMS but rather I cannot say that it definitely does. The fundamentals is no longer the same (to me) - there is an element of uncertainty as Specuvestor wisely wrote about. I did reduce my stake yesterday after contemplating about this. I am penning this now to avoid any hindsight bias but I do wonder will I regret parring down my stake when the dust settles (foresight bias ?) haha ! I hope the Board will issue a similar clarification like in 2012 to reduce this element of uncertainty.

(Vested)

IMO, the decision is rational, no matter the outcome. Buy base on a story, and reduce when story no longer fully valid.

I did read thru the previous posts, and preliminary research. I agree the fear on Andy disposal is unwarranted with his record. Mr. Market's fear should be mainly from AMAT disposal.

How bad is the (likely) damage from AMAT? Hm...

Could this just a case of AMAT selling some shares to lock in the gain? With the bonus shares being issued, this may bring the ownership back to 5% again? If this can be calculated to be the case, it would ease a lot of fear and speculation.

I assume AMAT investment into UMS is a strategic move, which make profit talking less likely. Unless it is no longer strategic importance, which is the source of Mr. Market fear...

if you don't know why the mgmt sell, stay clear and wait. Not as if there is only one counter worth investing at this point in time. Why risk your money.

😇天堂与地狱😈就在当下

I have some thoughts about AMAT selling their shares to below 5%.

In a previous company which I had worked in, there is a need to declare any purchase to be made if I have a shareholding is above 5%, or have say within the company.

In AMAT case, they may need to be judgmental when they want to assess other possible suppliers in the future, and not seen biased with a big stake in UMS. Especially so now that 1) their contract with UMS is coming to an end soon; 2) their merger with Tokyo Electron.

If UMS still able to offer value to AMAT after 2017, I see no reason for them to change vendor. UMS current's "extreme indecent" margin could be due to the contract previously signed. Coming 2017, they maybe need to negotiate with AMAT (without favor or biased) a new contract with AMAT. The margin will likely to be squeezed, and profit will drop. Andy could be selling due to this.

Of coz, above may not be true.

(12-06-2014, 10:39 AM)NTL Wrote: I have some thoughts about AMAT selling their shares to below 5%.

In a previous company which I had worked in, there is a need to declare any purchase to be made if I have a shareholding is above 5%, or have say within the company.

In AMAT case, they may need to be judgmental when they want to assess other possible suppliers in the future, and not seen biased with a big stake in UMS. Especially so now that 1) their contract with UMS is coming to an end soon; 2) their merger with Tokyo Electron.

If UMS still able to offer value to AMAT after 2017, I see no reason for them to change vendor. UMS current's "extreme indecent" margin could be due to the contract previously signed. Coming 2017, they maybe need to negotiate with AMAT (without favor or biased) a new contract with AMAT. The margin will likely to be squeezed, and profit will drop. Andy could be selling due to this.

Of coz, above may not be true.

I am listening to all inputs. I will said this is a good input, even it might not be true eventually. Thanks

(11-06-2014, 11:46 AM)orangetea Wrote:

(11-06-2014, 10:02 AM)valuebuddies Wrote: All newbies buying!! What about the sifus and laojiaos? I tempted to add also but think the sell down might not end yet.

EDIT: I mean forum newbies who might be already very familiar with value investing

Sorry, to play devil's advocate here...

So far the posts i read are trying to justify the character of the CEO and the relationship betwen UMS & their only customer - Fair enough
(But no release of info by company despite the price plunge is not very investor friendly - though they have 2 working days to mandatory disclosure - and why is SGX not asking too is another "?")

I think what is missing here is what is the price this company is valued at.

An analysis is only as good as its underlying assumptions !

Due to the nature of its single customer dependency - the accuracy of any valuation made on UMS would be extremely sensitive and highly dependent on the forward looking assumption one has to make in the valuation model - whether manufacturing contract would be renewed (or not renewed) at expiry in 2017.

The difference in values derived at with these two different assumption inputs would be significant – a reflection of high customer concentration risk.

Hence, the crux of the issue still critically centered on – whether manufacturing contract would be renewed at expiry in 2017 ?

(vested)