(21-03-2022, 07:57 AM)dydx Wrote: [ -> ] (20-03-2022, 09:34 PM)BlueKelah Wrote: [ -> ]This stock has proven itself to be a value trap
Not counting the coming (in May) 0.03/share final dividend for FY21, LHT's shareholders had received a total of $0.19/share in dividends for the previous 5 FYs (FY16 to FY20), averaging $0.038/share a year. For shareholders who bought into LHT in 2016 mostly at sub-$0.55 level as a long-term hold, just on dividend alone the average annual return is close to 7%. Including the $0.15 appreciation in share price (by simply using $0.55 as reference) since end-2016, total return in last 5 years would be easily $0.34/share, or a little over 12% a year without considering compounding. This is not bad at all!
So it is a matter of different perspectives!
As it stands now, LHT's current market cap at only $37.5m appears still grossly underpriced against its latest 31Dec21 NAV at $56.5m (including a $36.3m cash reserve). I suppose that's why the counter remains illiquid, and MD Yap Mui Kee continues to patiently add more shares for her own benefit.
55cents? haha go and see the daily volume and sell queue please, its been dead stock since 2016, last week i saw only a few lots at 705 and 710, but like 32lots plus at 700, very obvious boss is collecting at that level.. If i wanna vested $50k it will push the price up to 80c or maybe even $1 liao. the low share price with good yield is just for you to see.
Look at Captii, also lotsa net cash, trading near cash value. How many decades its been ding dong at 40c to 60cent.
Also previously I had vested in CDW holdings was also near cash value many years ago. But all gone in bad investments and business losses as their product became less relevant.
So dont be blinded by high net cash, like hupsteel and AEH all high net cash, where are they now? Some companies like LHT may also utilise a huge chunk of cash to buy land and build factory etc.. so they dont use debt, but there goes your hope for a big payday. And as RMB said, they could do another PRC like value eroding foray. (what some companies do is to "invest" the cash overseas business, then after that the cash is gone and they close down the overseas subsidiary after write downs and losses. But the money ultimately has been redirected back to insiders. (look at the toilet paper fiasco in New Toyo in Vietnam, is it a coincidence wife of boss is Vietnamese?)
LHT You can tell its very obvious the boss and friends have no intention of doing anything about the share price. THey will just try to collect until they can privatise it on the cheap. Business wise how much growth do you expect?
I compare this to my other double and triple baggers winners like Powermatic, Spindex, Multichem and recently Riverstone, and a few other delisted ones like PCI.
Wanna know what the secret sauce? its getting high cash flow businesses that have some growth potential with management that are happy to reward shareholders. And in sectors that are in the upcycle and will remain there for a while.
As you mention, so much cash can afford 5c dividend plus some extra big bonus but why keep at 3c? just like captii can afford to double their dividend back to precovid as business has recovered. why do they need OPMI to complain? cant management automatic a bit? Simple answer is they are not there to help you make money...
While there is always a potential for privatisation and a share price rerating, its a very slim chance. And for 7% yields theres other small caps like hotung etc.. that offer similar sustainable yields.
Not saying LHT is bad investment, just that for me the management behaviour and capital management speaks volumes on their intentions so I dont think it will end up as a GREAT investment.
Remember your good friends at S*****?
i told you guys many years ago it was a very very obvious value trap, look at whats happening now with the rights issue and admin even have to shutdown the thread.
By the way have a look at REX Int. story, its all the hype now, but look at their maturation into oil production, debt reduction and the massive cash flows that will come in over next 20years if oil just averages above $60USD vs $30USD costs. Plus very easy growth into adding additional wells.
IMO big inflation is coming, for stocks the good places to hide are in commodities and precious metals....