Reporting season begins – Nagacorp & Cellnet

I’d like to go into further details about all the individual companies I hold like other blogs when they release their profit numbers but logistically it’s hard for me to find the time. I will endeavour to at least write a few sentences in situations especially where a holding may have surprised either positively or negatively and note if I continue to hold, sell or maybe even accumulate more.

So that I don’t have too much of a backlog I’ll now mention Nagacorp that reported recently on the Hong Kong exchange, and locally CLT. If my other holdings report like these two I will be quite happy, I very much doubt it and reporting season can often be stressful. As I write I am reminded about RNY last time and in fact they were one of the earlier companies to already report. At this stage reading their numbers I am somewhat relieved I was able to sell since the last half year at an average of 15.5 cents and no longer hold. Currently they look quite weak at around 10.5 cents and wasn’t too impressed by what they reported.

Nagacorp – 3918:HK Although I purchased them above $5 last year I wrote about them for the first time earlier in the year when they were out of favour under $3.90 and suggested others could do nicely buying at that stage. Perhaps I needed more courage to buy more myself but I didn’t. Yet the numbers they produced were very good and the slow down some companies have experienced in Macau does not apply with Nagacorp for various reasons. The shares seem firm at $5.90 and also have paid a large dividend since I last wrote about them.  If one wants to dig a bit further the CEO often appears on CNBC after each set of results to discuss which you can dig up on google. I don’t plan on selling for quite a while.

I’ll try to get in the habit of linking previous comments on a stock to make things better organised. With regards to Nagacorp though clicking on the February archives on this blog you don’t have to scroll too far down to see what I first wrote.

CLT – the easiest way to link about Cellnet is I happened to write a short summary of them for an interesting website in shareidea that is under the useful web links category on the blog.

EPS is up 10% for the financial year which included a half leading up to Christmas and some headwinds from the issues with Dick Smith. The dividend was boosted 25% to 1.25 cents. I purchased earlier this year at 20 cents and shortly after when I got around to writing on shareidea there was some stock around for a couple of weeks offered at 18 cents. It is not a very liquid stock at all. So on my buy price of 20 cents they are yielding 6.25% fully franked and on a P/E of 6 times for a year in which as I said experienced some headwinds. That tells me the brand they started up internally may have some decent prospects that can increase their potential rather than be seen as merely a smart distributor and marketer of needed products.

I don’t think I need to worry about selling my CLT for a while now either. As I write they are looking firm at 25 cents.

REF was another I mentioned on shareidea and just wanted to quickly mention their update late Friday on their recent acquisition.

The add on to the existing oz contacts site they run was called and delivering revenue of $1.3 mill and EBITDA of $250k, making their purchase costs of $750k only 3 times EBITDA. Although the new brand will operate in parallel to oz contacts I would assume the ability to cut costs and improve efficiency overall represent a great opportunity, especially acquiring at such low multiples. Some more disciplined and patient acquisitions like this one and the share price might even be cheap even if you do not include any of the 1800 reverse operations in our valuations.


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