Fusion Investor Chatbox

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Monday, May 21, 2007

OSKVI Comments

For some unknown technical reason, it seems one cannot post comments on the following topics:
- http://fusioninvestor.blogspot.com/2007/05/gpacket-and-oskvi.html
- http://fusioninvestor.blogspot.com/2007/05/oskvi-earnings.html

So, if you have comments on either posts, please feel free to post it here. I have also received a comment on "GPACKET and OSKVI", and will post it here in the comments.



Seng said...

Received From: Maxforce
Date: May 19, 2007
Extracted From: Email to fusion.investor@gmail.com


Dear Seng,

Noticed your OSKVI and Gpacket post but somehow could not make a comment post - not sure why.

And since I think your style is more of long term investing, I d suggest you explore into Moving Averages (MA) for TA supplement to your FA.

If you look into these two charts, with a simple tool of MA, you d been warned about the impending downtrend with the earlier emergence of "dead cross". So even with a bullish candle later, it may not be a bullish indicatoras it did not manage to break the MA with the closing price.

Just a suggestion to use MA :)


Yew Khim said...

OSKVI reminds me of another venture capitalist stock listed on the SGX. it is called Hotung Investment.

Such stock perenially trade at a discount unless there is a catalyst for it to move. It's NTA is USD$0.21 and current mkt price is only USD$0.14. It's denominated in USD dollar and biz is in Taiwan, hence explain why investors are not keen on it even though it is undervalued

Anyway I like your analysis of OSKVI and will consider investing a bit of my money in it.

Seng said...

Dear Yew Khim,

I would say that's generally true for most stock investments. If there is no catalyst (e.g. news, prospects of earnings increase, prospects of NAV increasing, higher dividend possibilities, growth possibilities, etc.), then, the stock is unlikely to move much ... Therefore, it's generally a good thing to own a stock with several catalysts, just in case one or two of them don't work out the way one thinks they would.

But besides catalyst, the ideal investment is one that has low downside risk, and much higher upside potential gain. To me, OSKVI is such a stock, since the downside gain seems limited to a patient long-term investor (you get prospects of higher dividends, at least 6% p.a. net of tax while waiting, also, the parent owns 2/3rd and is still accumulating).

The potential upside gain is naturally high. GPACKET in the last 3 days has risen strongly, and this doesn't hurt OSKVI's NAV a little bit. It improves the prospect (although no guarantees) of OSKVI realizing more gains at even more attractive price going forward.

I think in any industry groups (whether it is venture capitalist, closed end funds, airlines, transportation stocks, etc.), there are bound to be industry leaders and laggards. Careful selection is a must.


Yew Khim said...

Hi Seng

Thank you for your reply.

There is a factual error in the NTA of hotung investment. It's NTA is worth USD$0.24 (i mention USD$0.21). Like OSKVI , Hotung is trding at hugh discount (USD$0.14 vs USD$0.25). Hotung has been buying back it's own share too.

Between Hotung and OSKVI, it is better to invest in the latter due to it's better track record. Hotung track record isn't good. It has been loss making for the past few year and only recently turn around.

Investors are not keen with venture capitalist. I think it's best to invest in it when no one else is keen. I will consider keeping some OSKVI stock.

Seng said...

Hi Yew Khim,

I don't follow Hotung, but actually, OSKVI is trading above its reported NTA (Net tangible asset - book value/historical cost) of $2.22.

In OSKVI's case, the problem with NTA is that the assets are recorded at historical cost, which doesn't reflect the higher current market values.

In Q1/07 report released last night, the paper gains is now close to $290M, or nearly $2 per share.

So, OSKVI is trading at large discount to its NAV (Net Asset Value, marked to market).

OSKVI is similar to a Closed End Fund. Both don't produce tangible products that people can see and touch. Both don't provide a typical service that the public can use on a daily basis. Instead, both own diversified list of stocks in stock exchanges, and both should be valued on NAV basis. Closed end funds like ICAP and AMANMFB are not traded at NTA, but NAV basis.

Yew Khim said...

finally load up some OSKVI at $2.40 today. (low $2.40 and high 2.44).

last week queue at $2.34 but didn't manage to get it (low was $2.36).

Will consider increasing my stake if price drop further

Xerofy said...

Hi Seng,

Can you post an update to this OSKVI blog?

Its price has declined considerably since your post, is it still undervalued or fundamental deteriorating?


Seng said...

Hi xerofy,

Thanks for your enquiry.

For your info, I no longer have any position in any of the stocks mentioned in this blog, due to a fundamental change in my personal trading style. As a result, I do not intend to do a fundamental update to any of the stocks mentioned here.

Nevertheless, do feel free to discuss the stock in the chatbox above. My general impression of OSKVI as of today is that 1. The business has failed to meet the 2 overseas listing time-frames previously announced (which is supposed to be this year), which is a great dissappointment. 2. The NAV has reduced significantly, as a result of the large decline in Mesdaq, and 3. For some reason perculiar to KLSE, the market doesn't seem to want to pay full value for this counter, notwitstanding the fact that the bulk of its assets are liquid assets. I think we saw some of the reasons why, such as OSKVI's reluctance (or inability?) to sell its strategic holdings such as GPACKET when they were trading at high prices, but instead are left holding them at current depressed prices. One of the basic tenets of investing is to never to argue with the market. And since the market doesn't seem to want to pay full value for this stock since its IPO, it's wiser not to fight against this trend, unless you can see a very strong pending catalyst.

Like all investment commments, the business and markets changes constantly, so, it is important to remain updated, although I regret to advise that I have no intention as of this moment to update them here.

Kind regards,