Ya Horng sold.

This is a stock that i purchased into my value-stock portfolio about 4 years ago. It was selected using Graham's net-working-capital criteria. (the post: Ya Horng Electronic (M) Bhd.)

According to its quarter-report 30-Apr-2012, Yahorng's financial status still strong, with a net-working-capital per share of RM1.49, and cash per share about RM0.79... so, I'm actually in the opinion that the current share price of RM0.87 is still very cheap, judging with Graham's method.

However, two years ago I had set a 4-year time limit for all the counters I purchased using Graham's NWC strategy (the post: A new framework for my Value-stock-Portfolio.)... Ya Horng was bought on Jul-2008, so it's time to let go.

My investment records for Yahorng:

• Jul-2008: bought 2000 unit at RM0.55,
• May-2009: sold 100 unit at RM0.72,
• Jul-2009: dividend payment, 5sen per share less 25% tax 
• Sep-2009: sold 100 unit at RM1.00, 
• Jul-2010: dividend payment, 10sen per share less 25% tax
• Jul-2011: dividend payment,  2 sen per share less 25% tax
• Jul-2012: dividend payment,  2 sen per share less 25% tax
• Aug-2012: sold 1800 unit at RM0.87.

The average return rate of this investment is about 17% p.a., quite satisfactory but still off from the target I had set for this portfolio (25% p.a.).

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Ya Horng Electronic (M) Bhd.

This is the new stock that I’ve added into my “value-stock portfolio”.

I bought it at a price of RM 0.550 two days ago. According to its latest quarterly report (April-2008), its net working capital per share is about RM 1.32, which is more than double of my buying price!

Other criteria found in this stock are:

• Zero debt. (no borrowings)
• Cash per share of about RM 0.65. (at Apr-2008)
• Low PE ratio (about 6, three year average)
• Consistent, uninterupted dividend payment for many years, and net DY > 5% in each of the past ten years (according to my buy price of 55 sen).

I bought the stock just few days after the execution date of its latest dividend (5 sen less 25% tax). So, I didn’t enjoy the latest dividend, and its cash per share should be around 61 sen now. However, my buy-price is still about 10% lower than its cash value.

There are also some negative sides of this stock:

• Its inventories and receivables is very high compare to its PAT. But they are still acceptable if compare to its revenue.
• Its profit margin is very low (about 2% in the past two years), and the margin show a decreasing trend in the past ten years. Some may say that it's in a "sun-set industry".
• The liquidity of its stock (trading volume) is very, very, very low.

The last point is the main reason why I didn’t buy it earlier though I’ve discovered it few months ago -- my quotation just couldn’t be matched.

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