01 March 2010

IQ Group Holdings Bhd

This is the new company being bought into my value-stock portfolio today.

I bought it at 50sen, which is a discount of more than 40% from its net-working-capital per share (based on its Dec-2009 report).

Other good criteria of this company:

  • Plenty of cash (about 35 sen per share).
  • zero borrowings.
The stock is currently trading near its historical low price. The PE ratio is around 10, based on its three years average earning of FY2007~2009.

The company was listed on Bursa since 2005. Its profitability had been falling through these years, and suffered a small amount of lost in FY2009. It stopped paying dividend since 2008.

For the FY2010, a profit of 2.5 sen per share was recorded for the 9-month period ending Dec-2009. No dividend had been declared yet.

The investment decision today is kind of Walter Schloss' style. Walter likes to purchase companies when they were facing problem, i.e. when their profit and dividend fell, provided that the company had no debt. And he likes to bought companies at prices near their historical low.



THKOAY said...

This stock price drop to 46 cent after the 4th Quarter report showed loss of more than what a lot of investor expected. It was expected to turn in a small profit this year.

I think the management probably saved those earning for next year.

King said...

jesus... this stock has lost money 5 out of 8 quarters...

The recent loss was over 10 cents, how is this a value based approach?

Unknown said...

first, I will only evalute a strategy base on its performance on the whole portflio. Even the best strategies would fail in some case, that's why diversification come in.

And don't judge too early. I bought Yahorng above 50sen, it hit below 40sen before rebounch to the current price ~ 85sen.

For IQgroup, though its latest report shows a bad result on earning, its NWC seems had little change. This value-base approach is focus on assets, not earnings.

William Wang said...

Dear Friend,
I came across your blog while going through to get more information on this IQgroup. You see, I had one of my fingers burnt by this stock and I do not want to repeat my mistake and thus going through again, where I had gone wrong in my decision. I had ridded this stock between 38 to 50 sens, a loss of about 60%. I was attracted initially to this stock by some glorified analysis by so-called anaylists from local investment bank institutions. This stock is in its 5th year listing now. On reflection & going through its quarterly results, its results had not been consistent and practically on third year of listing onwards the results had been miserable. My conclusion, initial years results were pressure-cooked by creative accounting, while some of the directors & investment bankers cashed out. Kent Chen is left to slowly milk this dying cow to death. Given the type of management, there may be another chance where the MD will cook up this stock again and abandon it just like the other taiwanese in kenmark but it is not my cup of tea. Good luck to you and I am being sincere here.

Anonymous said...

Dear friend,

The stock price is now at 28.5 cent, that is the price Kent Chan paid for his 500K share purchased on Sept/2011.

In Nov 2011, the 2nd Qtr result is good at 4.93 cent EPS and 1st Qtr at 0.51 cents.

The price has been pretty steady since Nov2011 until recently. Somebody has been selling this stock from 35 cents to now 28 cents. Something is wrong with this stock.

The price movement is not jive with the fundamental or official earning announcement.

This stock is not for weak heart. I had written to the company to ask for more insight on recent stock price movement. Can it be their business recovery plan derail? Or some major unforseen event happen that trigger this sell down.

Hope to get some news soon

Anonymous said...

Confirmation obtained from IQ Group and that is fast.

The business recovery plan still on track. No major customer default or situation occur. Some foreign gain in Q2 may be reversed due to recent apppreciation of ringgit.

I stay put with my investment and wait for 3rd Qtr announcment as there is nothing that affect my original purpose of buying into this stock.

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