Bought back Cacola at $0.30 on 8 Aug 2008. I believe value has emerged for this PRC consumer play. It has the lowest PE, highest ROE and profit margin among all the furniture plays. Forecasted dividend yield is also attarctive at more than 5%.
For the benefit of those who track my portfolio movement, i do trade regularly within the portfolio of stocks that i own. For instance, i sold a substantial portion of Noble when it was trading around $2.10-$2.20 and bought back half at $1.83. Swiber, i sold off 90% of the holding at $3.05 just before this round of falling. My target re-entry price is around $1.20.
For counters who base their revenue on project completion recognition, their earnings tend to flutuate dramatically on a quarter to quarter basis. Need not look far, Ausgroup and Sino Environment are perhaps victims of the quarterly reporting. To meet market expectation, these Companies ought to try to smooth out their earnings fluatuation. As an accountant, i know this is not an easy task because it requires perfect coordination between the financial people and the operational teams. Nowadays market dont give chance, poor performance in one quarter will see the share price battered like no tomorrow. Matter usually get worse with some analysts writing some negative reports adjusting their numbers based on those quarterly figures.
The other devil is the high level of gearing Swiber has. It is very challenging to maintain current growth rate without aggressive borrowing or share issues. Either case will only make situation worse. This is similar to many construction companies, good paper profit but where is the money?? Shareholders here are not like US, where people can easily be convinced of "reinvesting earnings".
With oil prices falling, investors tend to believe that its future order book will shrink. The lack of new order announcement also doesnt help halt the fall in price.
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