Penguin International

[karlmarx]

Shipbuilding is definitely not a business for value investing. We do not have much competitive advantage in this area
Frankly, how do you sleep holding Penguin stocks? Come on guys, are you guys really heavily vested in this kind of stock?

Value, like beauty, is subjective in my opinion. Some see value in property stocks that has potential asset revaluations, some see value in penny stocks trading at low/distress valuations, some see value in high yield/dividend stocks, some see value in a stock simply because it has been beaten down so badly or it has exponential growth still despite seemingly absurd PE ratios. At the end of the day, the list goes on and on but I am of the view that value is subject to interpretation and I don't think we can simply write off a particular stock not qualifying as a value investing stock simply because of the industry it is in. 

In fact, you mentioned financial blue chips as a comparison and I'm sure there are many others that will beg to differ on whether they qualify as value investing stocks as well...

Notwithstanding that you mentioned deliberately writing this post in a nasty way to warn newbies, I don't actually see a need to as I highly doubt any newbie surfing through this forum will buy simply based on a few posts here. 

P.S This is my first post in this Penguin thread and I have never "promoted" this stock but at times, I can only wish that by posting here or in other platforms, I am able to rig the prices of some stocks I am holding 

Indeed. Any stock can be a 'value investment,' regardless of the type of business it is engaged in. 

Indeed. Newbies don't buy based on a few posts; they buy when they see a lot of positive discussion on it. 

The fact is that people buy shares with the hope of selling them at a higher price, at some later point in time. There are many ways for prices to rise. More profits and more dividends are the usual drivers. Where these are lacking, more positive analysts reports, articles, and discussion, can be just as powerful. 

Unfortunately, most of the people who follow these reports, articles, and discussions eventually discover that they are better off not trying to follow some smart guy(s), after all.

If you had the ability and resources to create hype around stocks that you own, thereby allowing you to offload at a nice premium, would you do it? Just something to ponder over.

[holymage]

Any stock can be a value investment.

A very simple hypothetical scenario: a shipbuilding company with $100 million in net cash, trading at $50 million. Theoretically, you can buy the 50 cents on the dollar. You can buy the company in its entirely, liquidate it and double your money.

How is this not value investing?

Regarding shipbuilding, it is a very cyclical industry. But there is still value in shipbuilding companies. Most retail investors frequently confuse cyclical companies with low quality companies. If there is really no value, why would private businesses enter into this industry sector? There must be sufficient economic incentive to entice private entrepreneurs to enter the shipbuilding industry. The key is to determine its intrinsic value by estimating the amount of free cash flow throughout its business cycle.

[chialc88]

(link to why I am a promoter for Penguin)


before I proceed, let me says that all my top holdings were net cash, stable and/or increasing dividend, extremely overvalue (PE & PB)
except Penguin.

Penguin is the only one that I think is not overvalue.

I know that my thinking might not be the same as you because we had different financial circumstance, investment experiences and ability to shoulder the daily up-and-down disturbance from Mr Market.

I mean, if you read thru entire Penguin thread, you'll noticed that this is really a solid company (granted thou in a cyclical industry).

The question is why do we read Penguin differently from others?
or what do we see in Penguin that make it different from other company in the same industry? (O&G by-the-way).

That, my friend, might be something that make Penguin stand out.

@k, you had already made a conclusion that Penguin will be around for the next 10 years.
That's good.

Regarding the question on how will Penguin stock price behave in the next 10 years, 
that's a difficult questions as I too, am searching for the crystal ball.

However, I think I got my answer and I am happily vested about one year ago.

10 years is a long time to wait and tell.

I'm not holding my breath.

BTW, CSG-CIMB Cezzane See wrote a better report than Paul Chew - I compared.

[weijian]

Thank you Karl for explaining the situation. I get what you mean.

I deliberately write it a nasty way, so that newbies will be more aware of what they are reading.
IMHO, Penguin is not investment grade. And smart people here shouldn't waste time on it. The company is too weak to form a significant portion of your portfolio.

Ship building is a bad business. Gov can support you, but for how long? There's no guarantee on consistent orders.
I am quite shocked that this type of company receive more attention than financial blue chips.

hi pencilin,
From Moderator's perspective, i would actually need you to rein in on your "strongly worded statement", even though you might have a point.

My posts on penguin in 2015/2016/2017:
2015: https://www.valuebuddies.com/thread-3645...#pid118620
2016: https://www.valuebuddies.com/thread-3645...#pid132337
2017: https://www.valuebuddies.com/thread-3645...#pid137552

Generally at VB.com, we don't believe in baby sitting (newbies or whatever). Anyway, one who takes out some money to invest is probably also eligible to vote in elections I believe (and hence is qualified as an adult). We all have to recognize investing is dangerous and end of the day, we have to be accountable to our own money, one way or another. Sometimes, lessons are painful but also necessary as part of the learning process - just like how I got burnt for playing with matches when i was 7 by hiding myself and doing it in a room by myself, despite the countless verbal/paper warnings.

This is a place where we talk about facts and figures and then we can have a healthy respectful discussion/debate on its merits.

Your original post has been moderated but the essence still remains.

Moderator

[chialc88]

@K,
I always say that I'm thankful of valuebuddies for all the excellent posts.

I am not referring to talking up of stocks and sell at a profits;
neither referring to buying stocks due to stock tips given here.

I am thankful, actually for a opposite reason. 

---

Case #1. Best world (5ER.SI) 
I always know that bwl is a company with a good heart.
It's no brainer for me to buy bwl.

The trigger point comes when valuebuddies shared that bwl is having problem in Indonesia,
specifically taxation issues.

This and the subsequent posts created lots of uncertainty on the future of bwl.

I must admit that I'm not a good analyst (numbers, ratio, etc).
However, I just do a back of envelope calculation and I am able to derive how much impact it's to bwl.
Of course, in term of financial numbers (eg. cash, NPM going down).

With the -ve news going on, the quiet market and sentiment had turning down.
VB.com is also very very quiet.

BWL price did not go down much (as it's already dirt cheap),
but rather, there are more seller.

I just mob up everything below 20cents (before bonus) until Sam started to buy.
With this good news, I stopped buying as it's getting difficult and it's no joke Q everyday with nothing brought.

---

Case #2 Penguin International Limited (BTM.SGX)
I studies all the posts in Penguin in details and yes, it tooks me a few days.
Again, I have a feeling that Penguin is a good stock and it's just a matter of right entry point (not price).

The silence in VB.com after everyone given up is a good signal.
With valuebuddies questioning (I toned down the emotion lar) decision of MPM, VB.com goes into complete silent.

That is the period I started accumulating Penguin.

---

I know and fully aware of the pump and sell game.
It's not important to me.
I love it when nobody is talking about a stock.
This is the best period for me to buy.

Now, both MM and Penguin threads are full of noises, I don't think anyone will be buying.
Am I right?

And, if I'm right, will you be selling?

Enjoy:

[karlmarx]

@K,
I always say that I'm thankful of valuebuddies for all the excellent posts.

I am not referring to talking up of stocks and sell at a profits;
neither referring to buying stocks due to stock tips given here.

I am thankful, actually for a opposite reason. 

Hi chialc,

I apologise if you feel that my posts have in some way offended you, such that you offered to clarify your position.

I must be clear that with regards to whatever I posted, I was not making any reference to anyone, or any stock, in particular. There are promoters everywhere on the internet, promoting all kinds of stocks.

I think it is great that this platform has been of benefit to you, and that you have made plenty of money. 

---

Though, for the 'newbies,' I will caution that not all stocks hit with bad news, or appear to be in lack of market/internet interest, are buying signals.

[dydx]

Shipbuilding is generally looked upon as a cyclical business, but when a shipbuilder has a whole range of its own models that serve a multitude of end customers/industries, there could well be an overall stability in the business. From a different angle, a shipbuilder which focuses on building smaller (up to 50 metres) aluminium vessels in volume and is capable of turning around a new build in approx. 6 months, would likely have lesser/smaller operating risks in the business than say a shipbuilder producing bigger steel vessels which take say 2 years to build, including credit exposure to customers in the event of a payment default or contract cancellation.

Penguin has its own range of proven crew boats - having already built and sold over 100 of them - which primarily serve the nearer-shore offshore O&G exploration/production activities by the oil majors and their contractors, by providing a reliable and cost-effective solution in regular crew transfer, supply of provisions (water, food, fuel, etc.), and as a standby and fire-fighting vessel. In territories where there are pirates or trouble (e.g. Nigeria), Penguin's steel-plated crew boats double up as security/patrol vessels. Penguin now also has its own range of passenger ferries and fire-fighting boats. It is quite clear that having its own range of proven boat models - which are being updated on an on-going basis - has made Penguin's business stronger and survive much better than its competition until now.

We must not forget that Penguin is also pushing hard to build a profitable boat chartering business, targeting the oil majors as their direct customers. A profitable chartering business which is conservatively financed can become a valuable long term business delivering very attractive positive free cash flow. If a particular crew boat model is loved by an oil major who has chartered a few of them on a term basis, it is conceivable that buyers/boat owners from other territories would likely also consider investing in such a boat for their own chartering business.

[pencilin]

dydx, thanks for the explanation

Mind to share?

1. Why do customer choose Penguin over Chinese or Korean builders?
2. What moat does Penguin has?
3. How many % of your portfolio would you invest in Penguin? So you can sleep soundly

[Squirrel]

You people are really nice. Bothering to reply to a freeloader who in his glorious 1 month of participation in the forum has only bashed people's investment thesis without substantiation, raised questions without a hint of research and contributed zero inputs/insights/analysis in his posts.

What can I say, really great and accepting contributors here who, on finding leeches stuck on their skin would gladly leave them to suck on the blood to their fill. And no pun or sarcasm intended here, I really find the response so far amazingly patient and in the spirit of sharing.

Salutes.

[pencilin]

Squirel, thanks for slandering me. Sorry to make you feel upset.

I am a noob, and I am here to learn.
I post my views because I strongly disagree with having Penguin being classified at "value" investment

Could you kindly share your views on my 3 simple question?
I wont take you more than 5 minutes.

Appreciate:
1. Why do customer choose Penguin over Chinese or Korean builders?
2. What moat does Penguin has?
3. How many % of your portfolio would you invest in Penguin? So you can sleep soundly