Simple case study of an asset play

[hyom]

Tuan Sing rose 23.4% on very high volume today.

The catalyst for this undervalued asset play? An article on Business Times commenting that it is undervalued. Quite unexpected.

[Nick]

Congrats Hyom

[hyom]

Congrats Hyom

Thanks. I would say investors were quite lucky to get a catalyst in the form of a Business Times news article. This is totally unexpected and no amount of analysis could have foreseen it.

The criticism that Tuan Sing's management is shareholder-unfriendly is a valid concern. An undervalued asset play without a catalyst plus shareholder-unfriendly management can remain undervalued for a long time. With little or no dividends (a bad characteristic of Tuan Sing), there is little reason to buy and hold such a stock.

Investors who stayed away from Tuan Sing for the above reasons were right. Investors who bought Tuan Sing because it is an undervalued asset play were also right. However, the latter was lucky because they got a catalyst from a totally unexpected source. They should not mislead themselves into thinking they are geniuses. Lucky? Yes. Smart? No.