K1 Ventures

[KopiKat]

Will there be a repeat of what happened to the price of Neratel, after the buyout by STE failed, here?

Price is holding up...unfortunate for the opportunists.

I used to be vested, so I did take a closer relook over the weekends to see if there're any Neratel-like opportunities...

Looking just at their Financial statements, a very big difference.

For Neratel, the key attraction (to me) was High Cash (~15ct/share), negligible debts plus the past 5 years' track record of paying 3-4cts dividend ie. Yield = 7.5% to 10% @ 40ct. Biz-wise, definitely not a growth stock, but some potential for short term growth due to their new MENA customer rights.

Looks like a rather safe bet for an opportunist when prices plunged to 39.5ct to 40ct after the Scheme Offer failed. In the worst case, just hold for longer term for the yield.

As for K1, for FY12, I see Debts more than 3x Cash. Div = 0.5ct ; EPS = 0.55ct. The Yield of <4% is not very attractive. Neither does it look like a Growth Stock, since they're paying almost the entire EPS out as DPS ie. not retaining for Growth. By nature of their biz ie. Ventures (fm their name), it makes sense not to hold too much cash (unless looking for new assets / biz to acquire) + use of Debts (to max. returns), I'd guess the key attraction would be on the discount to NAV (or RNAV).

Although Discount to NAV was ~20% and could be a lot more if they could find interested buyers (which will take time) to their assets, I decided to KIV 1st as I didn't get excited enough to do more research....