Spindex Industries

[wj1984]

Whilst valuations are important, i think you have to factor in long term holding factors such as at a price above $1 how much further upside?(note spindex is not a high growth stock) How much dividend yield are you getting at that price?

A simple method I use to overcome emotion is to just sell out enough to cover your costs plus some gains and leave the profits to run on so to speak. That way you dont have to worry or think about the stock anymore.

At 30c+ many years ago it was a fantastic value gem. Now still making money but problem is how much are you getting back in dividends since stock price will just go sideways and drops are likely from highs.

No vested as sold out during the last offer. and redeployed into stocks like multichem /PNE which were better value. About to exit Multichem as well but their high +cash flow and IT security business seems to be doing very very well as we get more tech heavy so just trimming allocation a bit here and there.

True on the upside issue - could be due to little coverage on the media. It may be a good stock but if you are holding for say 5 years with only 30% price increase its not a fantastic investment.

I just quickly went through the AR, 2013 - 92m rev, 2014 - 98m rev (6%), 2015 - 114m rev (16%), 2016 - 124m (8%), 2017 - 141m etc. Its growth has been respectable. Not super high growth but definitely can be categorize as a growth coy.

At 30cent back then its revenue is not the same as today so it could also be fully valued based on the numbers then.

Lastly i'm holding out because i think they other big minority SHs (SELECT grp de-listing) would want a fat premium for their shares if the Tans want to privatize.

If tans REALLY want to privatise they would have done so long ago, especially during the last offer. at best now you can get is usually NAV plus maybe 10-20%, that is if they even want to privatise. 

THey are already listed so many years, they can just play the long game and do share buybacks and other tricks to increase their stockholding more until its easy to delist. I think the son has taken over from dad too, so no impetus for older generation to sell out and retire.

By holding at high price, you also run the risk of the share crashing lets say 30%-40% during bear market, and then the offer suddenly appear at way below current prices. 

Business is cyclical as well, Spindex does not have a monopoly / moat on its business sector, its still a small cap with the 100m+ revenue, anytime downcycle , boom we are back to 60c or less. plus concentration risk to a couple main customers making up a lot of revenue.

Revenue growth has been respectable but i wouldnt say its a typical growth stock type. CAGR for revenue i think past 10 years around 7%+ and might be flattening out.

As what weijian mentioned earlier it could happen to 99% of companies but Spindex maybe that 1%. My view is that if you do a quick look through of the AR on minority shareholders you would notice that the TANS own 75% of the company and the rest of the SH hold the remaining 20%. Only 5% (115m stock x 5% - roughly 5.75m shares) is truly floating on the market.

Next if we dive deeper in the SH list, a particular family owns about 10% of spindex (of which it used to be visible on the list but since hidden under nominees). So in order for them to give up their stake they would probably need a fat premium else i'm sure they would be happy to hold on and share the good & bad times with the TANS.

Of course the TANS could in theory not pay / increase dividends during the good times but they have shown to be relatively SH friendly (judging from previous years where they increase dividends).

No doubt the share price could crash during a bear market which it did during march 2020 (from 0.9 - 1 to 0.68) but it also depends on your entry point.

Lastly cagr at 7% is respectable. I remember during one of my corp finance class a cagr over inflation is counted as a growth coy. But many of us are used to the super growth companies in the US.