Excelpoint

[efreet]

This promising stock is now 12.5ct. Hurray to those of us who have the patience to wait it out

[beau]

P/B: 0.404, PE: 5.62 with a dividend yield of 7.83%. They have consistently given out a dividend every single year since they were listed in 04/05.


This is a net-net trading at 0.43x Net Current Asset value.

[beau]

Slightly late but

http://infopub.sgx.com/FileOpen/ETL_NEWS...eID=402853

EXCELPOINT POSTS STRONG NET PROFITS IN Q1

 Revenue rose 15.7% to US$205.7 million
 Net profit after tax rose 23.5% to US$0.8 million
 The Group optimistic about its prospects in the second quarter

Excelpoint is still ridiculously cheap, being increasingly profitable while trading at a huge discount to liquidation value.

[TUBInvesting]

Slightly late but

http://infopub.sgx.com/FileOpen/ETL_NEWS...eID=402853

EXCELPOINT POSTS STRONG NET PROFITS IN Q1

 Revenue rose 15.7% to US$205.7 million
 Net profit after tax rose 23.5% to US$0.8 million
 The Group optimistic about its prospects in the second quarter

Excelpoint is still ridiculously cheap, being increasingly profitable while trading at a huge discount to liquidation value.

Hi Beau,

Just to debate a bit...

Why do you say it is a Net-Net?

Furthermore, it has a high debt amount while having low liquidity?

http://tubinvesting.blogspot.sg/

[CY09]

The idea of liquidation value is to liquidate a company based on a going concern, based on its balance sheet now and applying the appropriate discounts (trade debtors at 0%, and stocks aka as inventories at 30%, intangibles at 100%) and the recent 2.5 cents dividend, Excelpoint's liquidation value is 31.4 cents. So its market value of 31.5 cents is the same as its liquidation value, not a discount. It is worth noting, if we are forced to sell liquidate stocks (aka inventories) at one go, it is unlikely to fetch its worth on balance sheet.

This is why Ben Graham adds a discount to inventories on assumption of a company as a going concern.

[beau]

The idea of liquidation value is to liquidate a company based on a going concern, based on its balance sheet now and applying the appropriate discounts (trade debtors at 0%, and stocks aka as inventories at 30%, intangibles at 100%) and the recent 2.5 cents dividend, Excelpoint's liquidation value is 31.4 cents. So its market value of 31.5 cents is the same as its liquidation value, not a discount. It is worth noting, if we are forced to sell liquidate stocks (aka inventories) at one go, it is unlikely to fetch its worth on balance sheet.

This is why Ben Graham adds a discount to inventories on assumption of a company as a going concern.

Hi CY09, how exactly do you arrive at 31.4 cents? Do you apply your own discounts on inventories, receivables, etc?

NCAV = Current Assets - Total Liabilities

Based on Current Assets less Total Liabilities alone, the figure is roughly 72m, while market cap is now about 32m.

TubInvesting, liquidity is indeed low, and such is the case of most net-nets mainly because of their micro market caps. But I believe liquidity is a function of change in price. When these net-nets get discovered by the broader investing public and price shoots up, liquidity shoots up as well. This happens to a lot of net-nets I have invested in; a couple examples being TSH Corp and HTL International.

[BlueKelah]

IMHO they need to do something about their debt level, makes me uncomfortable. Despite the seemingly undervaluation to NAV, the huge net debt position is concerning. It is after all not in the business of property development.

The stock price had previously been downtrend since sep 2014 till end of dec 2015 with a rebound then. Looks like business is good now, but business for small caps can be very fickle.

YMMV

-n v-

[CY09]

Trade receivables I didn't apply any discount, intangibles 100% discount, stocks (aka inventory) 30%

[beau]

Trade receivables I didn't apply any discount, intangibles 100% discount, stocks (aka inventory) 30%

Where do you get these discounts from? Are they arbitrary?

Seems like it would be extremely/overly conservative to apply these discounts to the individual components of Current Assets, get a figure for liquidation value, then apply another margin of safety of 33% (as recommended by Graham). In other words, you would be discounting twice.

The formula for Net Net Working Capital (NNWC) is (Cash and short term receivable + 0.75x Accounts Receivable + 0.5x Inventories - Total Liabilities). Should you decide to use NNWC instead of NCAV, you need not apply a 33% discount or second margin of safety.

[CY09]

Hi beau,

In my calculation I only discounted rates once; applying arbitrary discounts to each item. I didn't discount a mos of 33%

It is worth noting if we were to follow a strict rule of applying mos of 33%, it's 0.52*0.66 which gives us 34 cents. It isn't far off.

It is interesting you mention about nnwc, using that metrics, excel point numbers become weak