July 27, 2009
This week, as part of our Investing Strategies Report, we spoke with analyst Sandy Mehta of Acumen Capital Managment. Acumen is a company that focuses specifically on investing in Asian companies. Here are some of the companies they’re looking at favorably now:
- Varitronix (710 HK)– “This is a maker of electronic components. They have leading market share in most of their business. They have a 6.5% dividend yield. The stock price today is $2 in Hong Kong, and they have $1.30 in net cash, so more than 60% of the value is net cash. The p/e on the stock is 3 times earnings. If you net out the cash, the p/e for the stock is 1 times earnings. There are good growth characteristics for this business and it’s just an unbelievably undervalued situation.”
- Golden Meditech (801 HK)–“It’s a Hong Kong listed Chinese healthcare company that we believe will grow 30% top line and bottom line going forward. It’s trading at 6 times earnings. We’ve owned this stock since 2004 when we launched our Fund. One major catalyst coming up is that Golden Meditech is planning to list one of their healthcare businesses, and we think that this will unlock value. They did a similar thing when they listed one of their subsidiaries on the New York Stock Exchange three years back, and that also was quite successful to unlock value. We think that there is a catalyst here in addition to a very undervalued situation.”
- Ascendas India Trust (AIT SP)- “This is a Singapore listed company but it’s a play on Indian real estate. This company has a 12% dividend yield. They just increased their dividend in May. Unlike so many companies in the world that are cutting their dividends, this company is actually increasing them. The stock trades right now at $0.67 in Singapore. The book value per share is $0.90. Our analysis suggests this book value per share will increase to $1 to $1.20 over the next one year. Currently the stock is trading at a 20% discount to its book value and we estimate, according to our model, that one year forward, it’s going to be trading at a 40% discount.”
For the complete Investing Strategies Report, including a full interview with Mr. Mehta and a variety of other portfolio managers, click here.
