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Showing posts from August, 2020

UOA – will it continue to create shareholders’ value? (Part 3 of 3)

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Case Study 03-3:  Continuation of the analysis and valuation of UOA Group. This post focuses on valuation and risks.  At AUD 0.63 per share (as at 30 Jul 2020) UOA Ltd is trading below its intrinsic value that I estimated to range from AUD 1.06 per share to AUD 2.20 per share.  At the current price, there is an ample margin of safety.With most of its activities in Malaysia, is the market saying the there is no future for the Group in the country?UOA has shareholders in Australia, Singapore and Malaysia.  Are all the 3 markets behaving like lemmings or are there wisdom in the crowd? Join me in the 3-parts post as I lay out my case on why this time it is not the wisdom of the crowd.Part 1, published on 2 Aug, showed how the Group got to where it is today. Part 2 published on 16 Aug focused on the future and the performance of top management. Part 3 presented here will cover valuation and risk mitigation. I will show you that there is definitely mispricing.  Hence an investment opportunit…

UOA Ltd – it is a bargain or value trap? (Part 2 of 3)

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Case Study 03-2:  Continuation of the analysis and valuation of UOA Group. This post focuses on the prospects of the Group and the performance of top management. Value traps and bargains are opposite sides of the value investing coin.  Which side of the coin you are on depends on the company analysis. UOA Ltd is currently trading at AUD 0.63 (as of 30 Jul 2020)  per share compared to its Book Value of AUD 1.06 (based on 31 Dec 2019) per share.Is this a bargain or a value trap?This is a property group where the cash, land and buildings accounted for about 88% of the total assets in the books. Surely the market is not expecting these assets to be impaired. We all know that the property sector is cyclical and we are experiencing a long trough of the cycle. But strong property companies like UOA Group can withstand the down period of the cycle. Join me in the 3-parts series as I lay out my case on why the market is wrong.  Part 1, published on 2 Aug, showed how the Group got to where it is…

In Malaysia, which has better returns; Stock market or Property?

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Case Notes 03:  Comparing the returns from investing in residential properties in Malaysia with those from investing in Bursa Malaysia
We are always looking for better assets to invest in.  One frequent question is which is a better investment - property or the stock market.
In researching the web to find the answer, I have found that the responses generally fall into 2 categories Analyses that give the pros and cons of each type. Those that focus on the comparative returns between stocks and property
Furthermore, the answers will also differ depending on the type of investors A layman may be interested to compare residential properties with the stock marketAn institutional investor is more likely to compare the stock market with commercial properties. 
In this post, I will take the view of the layman.  I will compare the returns from the Malaysia stock market with those from residential properties.
What have I found out?
For Malaysia, the return analyses suggest that if you don’t have a 30 y…

Is UOA Ltd a Value Trap? (Part 1 of 3)

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Case Study 03-1:  An analysis and valuation of UOA Ltd. This post focuses on the business analysis part.

UOA Ltd is currently trading at AUD 0.63 (as of 30 Jul 2020) per share compared to its NTA of AUD 1.06 (based on 31 Dec 2019). 
The UOA Group has significant assets tied up in properties.  Is the market suggesting that these are going to be impaired?
It this a value trap or is there a buying opportunity?
The Group also has a track record of compounding its shareholders’ value at 18% per annum over the past decade. 
Is the market ignoring these and giving you a fantastic buying opportunity? 
Join me in the 3-parts analysis as I lay out my case on why the market is wrong.  This is not a value trap.  
There is definitely an investment opportunity given the mispricing.  Does it mean that you should go and buy it? Read my Disclaimer.
Part 1 of 3 is presented here
Part 2 of 3 was published on 16 Aug 2020. 
Part 3 of 3 was published on 30 Aug 2020.