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Post by psolhawk on May 28, 2014 9:20:48 GMT 7
I see that oldman has been emphasizing a fair bit on investing in top entrepreneurs so I was thinking of using this as an example.
Fuji Offset Plates (FOP) is helmed by David Teo, the founder of Super group, and David's family members. FOP is now involved in the trading of printing plates which is a sunset industry with nothing to look forward to. FOP has tried to diversify its income, by investing in membrane research and a printing company but both did not bear any fruit. I got a foothold in FOP at 0.3X RNAV but have stop short of accumulating more as I am awaiting indications that the management is going to actively turn FOP around for the better. Since FOP divested the ice-skating rink business long time ago, the Super group has gotten more successful. Am hoping that Super group receives a takeover offer so that management has more time for FOP.
Cash per share $0.212
Investment property per share $0.121 @ book value less depreciation, $0.293 @ market value
No debt NAV $0.4493
Current price $0.275 Price to RNTA ~0.61 Price to RNAV ~0.45
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Post by oldman on May 28, 2014 10:13:50 GMT 7
I took a quick look at the FY 2013 annual report. At 27.5cts, its market cap is just $13.75 mil. It has $10.6 mil of cash with minimum debt. It owns industrial properties mainly in Johor. Its business generates only $7.2 mil of revenues and a profit of $347K. The founder of the company is also the founder of the listed Super Group. Yes, I like the company but there are 2 issues: 1. It has very low liquidity. The 3 directors own 63% and there are only 809 shareholders. The 14 year chart shows that there were very few transactions over the last 4 years. Hence, even if one wants to collect, I doubt he can collect enough shares to make it worth his while. 2. The founders are probably very busy with the very successful Super Group. Hence, they are unlikely to want to rush to build this company up. Nowadays, I rather wait until I see some action before investing. Also, I prefer to invest in a company where the main shareholders are likely to put increasing focus in the business. Agree though that it is a matter of time before this company transforms. Also agree that one may be better waiting for them to sort out the Super Group first. I see that oldman has been emphasizing a fair bit on investing in top entrepreneurs so I was thinking of using this as an example. Fuji Offset Plates (FOP) is helmed by David Teo, the founder of Super group, and David's family members. FOP is now involved in the trading of printing plates which is a sunset industry with nothing to look forward to. FOP has tried to diversify its income, by investing in membrane research and a printing company but both did not bear any fruit. I got a foothold in FOP at 0.3X RNAV but have stop short of accumulating more as I am awaiting indications that the management is going to actively turn FOP around for the better. Since FOP divested the ice-skating rink business long time ago, the Super group has gotten more successful. Am hoping that Super group receives a takeover offer so that management has more time for FOP. Cash per share $0.212 Investment property per share $0.121 @ book value less depreciation, $0.293 @ market value No debt NAV $0.4493 Current price $0.275 Price to RNTA ~0.61 Price to RNAV ~0.45
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Post by earnestlearner on May 28, 2014 16:34:22 GMT 7
Hi Old Man, Yes, big fan of your book and the old approach (ridiculous NTA approach). Made perfect sense. Since it used to work so well for you in the past, can you share with us your rationale for changing? E.g. your capital based has gotten so large that you can no longer fish in that pool? Perhaps your book has popularised the concept so well that more people are fighting with you to accumulate those shares? Or other dangers and pitfalls of the approach? To me, the new approach of investing in top entrepreneurs have a much bigger risks. As you pointed out in your book, CEO are the best sales man. It's more an art to judge human character and in many cases, we hardly know the top entrepreneurs enough to make a judgement. How do you go about ensuring margin of safety with this approach? What are some of your approach to mitigate such risks? Look forward to a great discussion in this topic and of course learn from this great forum!
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Post by oldman on May 28, 2014 19:43:24 GMT 7
Earnestlearner, I answered your question here: pertama.freeforums.net/post/5493/threadHi Old Man, Yes, big fan of your book and the old approach (ridiculous NTA approach). Made perfect sense. Since it used to work so well for you in the past, can you share with us your rationale for changing? E.g. your capital based has gotten so large that you can no longer fish in that pool? Perhaps your book has popularised the concept so well that more people are fighting with you to accumulate those shares? Or other dangers and pitfalls of the approach? To me, the new approach of investing in top entrepreneurs have a much bigger risks. As you pointed out in your book, CEO are the best sales man. It's more an art to judge human character and in many cases, we hardly know the top entrepreneurs enough to make a judgement. How do you go about ensuring margin of safety with this approach? What are some of your approach to mitigate such risks? Look forward to a great discussion in this topic and of course learn from this great forum!
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