Sell @ $0.295
Continue to reduce my holdings as price has reached close to my original dream price of $0.30. The story has also changed substantially since 1 year back when I started accumulating,
1. Growth due to Malaysia operations + Properties -> Decline due to much higher expenses + No / Little Properties. Still nothing heard about sales of 8Raja and with the 7th cooling measures, prospects doesn't look very bright. Can still be a joker in the pack.
2. Huge Cash 17.35ct peaked in Q4 (Apr12) but has since dropped to 14.14ct. Will likely rebound to >15ct in coming Q3 (Jan) but will likely drop again due to purchase of $27M Industrial Building in Mar.
3. PE = 5.54 @ $0.205 vs 7.97 @ $0.295 using FY12 (Apr) EPS but will increase further due to lower earnings in FY13. Using latest 4Qs of EPS, Forward PE = 9.87.
4. Yield = 6.341% @ $0.205 vs 2.712% @ $0.295. The drastic drop is not due to just increasing share price but the sudden cut in Interim Div of 0.5ct.
Note that I'm not doing a quick divestment as the market continues to be bullish and there's a very high chance of further price appreciation. In addition, these are my thoughts on the possibilities on the recent rise in price and volume,
a) Insiders – The coming Q3 (Jan) results are going to be a lot better than my projection, perhaps due to cost control + higher revenues. Properties either contribute positively or they have inked some deals. There's also still a remote possibility of a G.O. finally coming from Mr Chou.
b) Traders – Pumping operation in place. Read in VB forum how HupSteel was pumped up before being dumped. Many mid caps also hitting high valuations closer to 20 eg. BreadTalk. For Popular, Forward PE <10, may have more legs to run if this scenario is true.
c) Institutions – Sudden interest by institutional investor who's trying to build up a meaningful amount eg. 5% ie >40Mil shares. Quite remote as they're usually not keen on mid caps stocks but pattern looks consistent with those I'd seen in some REITs.
d) Mkt re-rating – Many stocks are hitting 52-weeks high with higher PE and lower Yield as as result. It may be a case of a rising tide lifting all boats.
Whatever the case may be, I'll stick to my valuation based on my projection, which is telling me to sell at the moment. Q3 (15-Mar) results will be important as it'll allow me to review my projections and adjust my decision accordingly. In the meantime, will continue to slowly sell with every 0.5ct to 1ct increase in share price. 😀