PIL@66cents
Last Friday, PIL closed @ 66 cents, PE 11, PB 0.8, NIL dividend declared (vs previous dividend payout of 1.75cents)
Looking at my trading record, my entry for first batch of market operations started on Aug 2018 and ended on Nov 2019.
All PIL collected at 31-32cents with one small batch sold on week Apr 2019 at 41cents and the rest sold later at 69.5cents.
Why PIL?
1) PIL was actually a valuebuddies favorite stock. If you bother to read the posts from beginning, you'll realised that this is a must have stock for valuebuddies.
2) PIL has strong balance sheet and due to O&G cyclical movement, it's share price had fluctuated between undervalue and near valuation.
3) PIL's niche vs it's competitors is quite evident and its management team had started to show their capabilities (thou it's share price is positively correlated to oil price aka demand for oil production).
Why start collecting PIL from Aug 2018?
1) PIL share price hit lowest 21cents in Sep 2016 due to cyclical downturn of the O&G industry. After that, its share price slowly recovered, obviously due to the recovery of oil price. As what
BlueKelah mentioned a few times, PIL tracked oil price movement. So, with oil price going up, PIL share price goes up too.
https://valuebuddies.com/thread-3645-pos...#pid149756
2) PIL released it's 1HFY18 result on 10th Aug 2018 after market closed. Although not fantastic, I couldn't help noticing the result turning up positive slowly (again tracking oil price - exactly like what
BlueKelah mentioned). So, based on 1HFY18, there are sufficient data points for me to visualise what is going to happen to PIL's result in the coming years.
https://links.sgx.com/FileOpen/Penguin_1...eID=521023
3) Nothing, nobody in vb.com is talking about PIL (any more).
With the silence in vb.com, it gives me a signal that nobody is going to snatch PIL with me. I could just slowly accumulate the stocks without triggering a tsunami of buy orders. That gives me the confident to initiate a sufficiently large position - which is my preferred mode of operation.
The following 3 posts, first 2 was prior to my collection:
24/2/2018
Dosser A lot of cash, slow revival of boat building activities, but compressed margins. Given the financial devastation of many other companies in the sector, Penguin have come through the storm well.
14/4/2018
dydx I find the very motivated joint letter (pg 12/13) by Chairman Jeffrey Hing and MD James Tham most invigorating! Quite clearly, Penguin's business and finances have turned around, and fortunes are slowly coming back!
2/10/2018
Elty Penguin has a good management. It does not borrow to build but draws on its cash reserves to build vessels for stock. It has moved into new markets like fireboats.
I read through the thread and this Penguin was first spotted around 9 cents. The stock went through a share consolidation of 1:3. So it is equivalent to 27 cents.
Does Penguin still has a sufficient margin of safety now?
Elty brings out an excellent point on the effect of share consolidation 1:3 which again gives me the confident to collect in huge quantity.
Basically, a lot of valuebuddies had been vested in PIL (long time ago aka likely before the share consolidation). Given my target price of 31-32 cents, it's equivalent of buying PIL at slightly more than 10cents per share before the consolidation. At 10cents, I would imagine that this would be a to-die-for entry price for many
vested valuebuddies.
Why sold PIL at 41cents on Apr 2019?
Before I explain, among many reasons, one of the main reason valuebuddies don't like about PIL is its low and/or no dividend declared especially when it's balance sheet looks pristine. Basically, PIL is not consistent in paying out dividend. So, when a dividend of 1.25cents was declared, I sense that this could be a turning point and it's time to harvest as the long wait for low or no dividend is over.
https://links.sgx.com/1.0.0/corporate-an...2050e0d2c2
I executed my trade and something strange happened. Quite a few valuebuddies take note of PIL result and there are more posts on vb.com. That completely U-turn my decision to sell and I told myself there is no need to rush.
Why sold PIL in Nov 2019?
This was a last minute decision. Prior to my selling decision, I was really an advocate of PIL. I know that PIL strong management team had demonstrated their exceptional business acumen.
The selling question was posted and a few valuebuddies like
karlmax and
BlueKelah chipped in.
All the while, I was not convinced... until suddenly, I realised that everyone was buying PIL with lots of optimism baked in.
It was a sudden realisation and I know that I'm part of everyone too.
I re-read both of their posts carefully (especially the few by
karlmax) and decided to
"sell now and wait...", which I executed swiftly at 69.5 cents.
Why brought PIL again?
My second market operation on PIL started on Nov 2020 and ended abruptly in Mar 2021.
Why I brought PIL again at 42cents?
Basically, I'm convinced that PIL is a good company. It has 2 revenue streams, the first one is proven to be successful in it's standard build products and the second one is up-and-coming green shoots in custom build products. A financially prudent company with smart management constantly searching and closing opportunities everywhere.
Respect!
Oh, why start buying again?
Covid 19 saw PIL share price drop till 39 cents.
When I take a look again at PIL share price, it was going up and down between 42-44cents for a few months. I thought it had found it's floor and so slowly accumulating again. This is obviously thanks to BlueKelah's previous post/advise to "sell now and wait..."
As I start buying, the price keep going up and I decided to chase until it reached 48.5 and then I stopped chasing.
Short time later, the offer came and I am forced to sold out at 65cents in Mar 2021.
Moving forward - if I may, I would like to practice
BlueKelah's advise one more time:
"sell now and
wait..."
<not vested>
Gratitude.
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