09-04-2014, 08:08 AM
Out of the 3 counters only Ezion is liquidity. Sarin and Talkmed are both illiquid and Talkmed was listed via introduction with literally no free float in the hands of retail public...
HOCK LOCK SIEW
Talkmed, Sarin & Ezion: putting to rest the myth of non-performance
BY R SIVANITHY
sivan@sph.com.sg
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Japannekkeijsx0904
The stock did dip to 68 cents a few days later, and then on Feb 11 jumped to 85 cents, a gain of almost 20 per cent in one day that drew a query from the Singapore Exchange - PHOTO: REUTERS
application/pdf iconEasy on the eye
ONE of the criticisms commonly heard of the local stock market is that it is a perennial underperformer.
Though classified as a developed market within the MSCI Asia ex-Japan index, it tends to be lumped together with emerging markets in Asia, and this has adversely affected the market's liquidity and performance. So conventional wisdom is that it is almost impossible to find massive outperformers here, or "ten-baggers", as brokers like to call those that are the holy grail of investing.
Maybe so. For some investors, Singapore might not be as exciting as other markets, but as the saying goes, "look and ye shall find". There are actually many "ten-baggers" available if one looks hard enough.
Today, we present three of the local market's most stunning performers in recent times - one that has managed to more than quadruple in about 10 weeks since listing with no analyst coverage; another which has risen 30 times in five years with only three local houses covering it; and a third, whose gain of over 25 times, also over five years, has come with plenty of analyst coverage.
The first is medical oncology group Talkmed Group, which listed on Catalist at the end of January and offered 105.1 million shares all via placement at 20 cents each. Those shares now trade for 95 cents - an astounding 375 per cent gain in about nine weeks, making it possibly the best performing initial public offering in the history of the local market.
Also, Talkmed's first-day performance on Jan 31 was perhaps the most impressive we've ever seen - it closed at 82 cents, a 310 per cent debut premium. (Clearly, the book-building process the company referred to in its announcement under the Plan of Distribution section to determine a suitable offer price didn't really yield useful market intelligence, but that's a separate discussion).
The stock did dip to 68 cents a few days later, and then on Feb 11 jumped to 85 cents, a gain of almost 20 per cent in one day that drew a query from the Singapore Exchange. After replying that it did not know of reasons for the rise, the stock has headed north since.
Talkmed is profitable - for the year ended Dec 31, 2013, it reported $28.2 million in after-tax profit, which gives it a historic earnings per share of 4.3 cents, or a price-earnings multiple of 22. Unfortunately, there is no analyst coverage, according to Bloomberg, so forecasts are not available.
An earnings multiple of 22 might be considered rich by some; on the other hand, the demand for good quality medical services cannot be underestimated. With such outperformance and potential on offer, broking houses should perhaps take a closer look at the company with a view to initiating coverage.
Three houses here do cover our next featured stock, Israeli diamond firm Sarine Technology, which sank to just 8 cents five years ago in the wake of the US subprime crisis but has since risen a staggering 32 times to $2.57. The three brokers are Maybank Kim Eng, Macquarie and CIMB, all with "buy" recommendations with target prices of $3.09, $2.78 and $2.59, respectively.
This year alone, Sarine's shares have gained almost 40 per cent; in the past 12 months, the rise has been almost 90 per cent. At present levels, Bloomberg gives Sarine's historic PE as 28 and prospective as 22 - slightly stretched but there's not too much cause for concern yet.
Before proceeding to our third feature though, a word of caution is warranted. Talkmed and Sarine are not very liquid counters, with trades averaging a few hundred thousand shares per day. (In yesterday's session, Sarine traded 1.05 million shares but 750,000 came from two married deals.)
If for any reason there is forced selling of shares pledged as collateral, prices could plunge as it does not take a lot of selling (or buying for that matter) to effect large price changes. So, even though both companies appear well-supported by earnings, traders should bear this in mind.
Our third stock isn't afflicted by poor liquidity. Oil and gas play Ezion Holdings' shares are always actively traded. Its performance over the past five years is just behind Sarine's - the stock has slowly crept up from 8 cents in early 2009 to $2.10 today. It has been an active player in the local corporate scene. Barely a few months after its takeover bid for Ocean Sky failed to materialise, Ezion is now proposing to buy a controlling stake in Catalist's JK Tech that may eventually lead to a full-fledged takeover bid.
Although the news has helped JK Tech's shares to treble, it hasn't really had much of an impact on Ezion's shares, which have fallen slightly since the announcement. Still, with 11 houses covering the company and target prices as high as $3.26 (from DBS Vickers) and with several above $2.50, Ezion's outperformance could well continue.
Sceptics might argue that three swallows do not a summer make, but rest assured that there are many more to be found. For now, these three will have to suffice to make the point that when it comes to the local stock market, large outperformance is highly possible.
HOCK LOCK SIEW
Talkmed, Sarin & Ezion: putting to rest the myth of non-performance
BY R SIVANITHY
sivan@sph.com.sg
PRINT |EMAIL THIS ARTICLE
Japannekkeijsx0904
The stock did dip to 68 cents a few days later, and then on Feb 11 jumped to 85 cents, a gain of almost 20 per cent in one day that drew a query from the Singapore Exchange - PHOTO: REUTERS
application/pdf iconEasy on the eye
ONE of the criticisms commonly heard of the local stock market is that it is a perennial underperformer.
Though classified as a developed market within the MSCI Asia ex-Japan index, it tends to be lumped together with emerging markets in Asia, and this has adversely affected the market's liquidity and performance. So conventional wisdom is that it is almost impossible to find massive outperformers here, or "ten-baggers", as brokers like to call those that are the holy grail of investing.
Maybe so. For some investors, Singapore might not be as exciting as other markets, but as the saying goes, "look and ye shall find". There are actually many "ten-baggers" available if one looks hard enough.
Today, we present three of the local market's most stunning performers in recent times - one that has managed to more than quadruple in about 10 weeks since listing with no analyst coverage; another which has risen 30 times in five years with only three local houses covering it; and a third, whose gain of over 25 times, also over five years, has come with plenty of analyst coverage.
The first is medical oncology group Talkmed Group, which listed on Catalist at the end of January and offered 105.1 million shares all via placement at 20 cents each. Those shares now trade for 95 cents - an astounding 375 per cent gain in about nine weeks, making it possibly the best performing initial public offering in the history of the local market.
Also, Talkmed's first-day performance on Jan 31 was perhaps the most impressive we've ever seen - it closed at 82 cents, a 310 per cent debut premium. (Clearly, the book-building process the company referred to in its announcement under the Plan of Distribution section to determine a suitable offer price didn't really yield useful market intelligence, but that's a separate discussion).
The stock did dip to 68 cents a few days later, and then on Feb 11 jumped to 85 cents, a gain of almost 20 per cent in one day that drew a query from the Singapore Exchange. After replying that it did not know of reasons for the rise, the stock has headed north since.
Talkmed is profitable - for the year ended Dec 31, 2013, it reported $28.2 million in after-tax profit, which gives it a historic earnings per share of 4.3 cents, or a price-earnings multiple of 22. Unfortunately, there is no analyst coverage, according to Bloomberg, so forecasts are not available.
An earnings multiple of 22 might be considered rich by some; on the other hand, the demand for good quality medical services cannot be underestimated. With such outperformance and potential on offer, broking houses should perhaps take a closer look at the company with a view to initiating coverage.
Three houses here do cover our next featured stock, Israeli diamond firm Sarine Technology, which sank to just 8 cents five years ago in the wake of the US subprime crisis but has since risen a staggering 32 times to $2.57. The three brokers are Maybank Kim Eng, Macquarie and CIMB, all with "buy" recommendations with target prices of $3.09, $2.78 and $2.59, respectively.
This year alone, Sarine's shares have gained almost 40 per cent; in the past 12 months, the rise has been almost 90 per cent. At present levels, Bloomberg gives Sarine's historic PE as 28 and prospective as 22 - slightly stretched but there's not too much cause for concern yet.
Before proceeding to our third feature though, a word of caution is warranted. Talkmed and Sarine are not very liquid counters, with trades averaging a few hundred thousand shares per day. (In yesterday's session, Sarine traded 1.05 million shares but 750,000 came from two married deals.)
If for any reason there is forced selling of shares pledged as collateral, prices could plunge as it does not take a lot of selling (or buying for that matter) to effect large price changes. So, even though both companies appear well-supported by earnings, traders should bear this in mind.
Our third stock isn't afflicted by poor liquidity. Oil and gas play Ezion Holdings' shares are always actively traded. Its performance over the past five years is just behind Sarine's - the stock has slowly crept up from 8 cents in early 2009 to $2.10 today. It has been an active player in the local corporate scene. Barely a few months after its takeover bid for Ocean Sky failed to materialise, Ezion is now proposing to buy a controlling stake in Catalist's JK Tech that may eventually lead to a full-fledged takeover bid.
Although the news has helped JK Tech's shares to treble, it hasn't really had much of an impact on Ezion's shares, which have fallen slightly since the announcement. Still, with 11 houses covering the company and target prices as high as $3.26 (from DBS Vickers) and with several above $2.50, Ezion's outperformance could well continue.
Sceptics might argue that three swallows do not a summer make, but rest assured that there are many more to be found. For now, these three will have to suffice to make the point that when it comes to the local stock market, large outperformance is highly possible.