When the drum stops beating for Keck Seng

 

When the drum stops beating

for Keck Seng

Towards the beginning of Sep 2, 2013, the beating sound of the drum was getting louder and louder for the shareholders of "then" hot stock Keck Seng (M) Bhd. The much eagerly awaited news of a bumper dividend of 95sen plus minus was like a powerful tsunami wave for investors to chase madly for the shares.

Keck Seng's share price of RM5.37 on Sep 2 shot up to a peak of RM7.97 on Nov 4. A rise of  RM2.60 or a whopping 48.4% gain in just a matter of two months showed how powerful those tsunami waves were! Nothing was going to stand in its way.

It was abnormal not to see Keck Seng in the top ten gainers' list during those period. If one has been reading the online comments in the i3investor.com blogspot, one would have felt the thunderous drumming sound from all those bullish investors. Nothing was going to stop Keck Seng from scaling another new Mount Everest again! The non-stop online comments from one Superdaddy was something like endless great wars going on and on the verge of a big victory after another! You should have read them. Creativity was at its best!

Alas, all good things must come to an end (or shall we say just a temporary end?), the share price declined gradually all the way from that peak price to the current price of RM6.94 at the time of posting on Dec 20. At one stage, Keck Seng fell down to as low as RM6.65 on Dec 17.

Even after the release of its 3rd Qtr results on Nov 27, which was an impressive one did not help to stop the sliding share price. Keck Seng reported an eps of 11.82sen which was 6.53sen more than the corresponding period. Similarly, its total 9 months' eps was 30.85sen which was 14.28sen more than the corresponding period. Cash and cash equivalents stood at a high RM936 Million.

Still time for bumper dividends payout?

So what will happen to this much anticipated bumper dividend? Is there still time for the management to declare it? I really don't know because I am just an ordinary layman like most of you. I really don't know much about the Bursa Malaysia's regulations regarding what will happens to its cash hoard should Keck Seng decides not to declare the dividend payout.

What will happen to the cash hoard then? I read from the online comments that the Inland Revenue Department will benefit from it should Keck Seng does not declare the dividend? I am at a total loss. Perhaps someone familiar with those regulations will share with me and others. I am more than 100% sure that there are many Keck Seng shareholders waiting very anxious to know about this situation.

Should there be a confirmed answer from the management of Keck Seng that there would not be no bumper dividend payout, it is a sure bet that there would be a lot of unpleasant comments for the "kiam siap" directors of Keck Seng. Yes, I have seen them all. Some of the comments were so extremely critical that I would not dare to reprint them here. You need to go to some of the online websites and have a jolly good time reading them.

Personally as a long time shareholder (on behalf of my spouse) of Keck Seng since Nov 2, 1999,  I must admit that I only have good praises for the directors. They have been very cautious (or perhaps too over cautious) in managing the company. They did not simply expand the business or acquire other companies hastily.  Several years back, I remembered reading the usual statement in one of the annual reports that the company was always looking for opportunities to scout for business expansion when the time is ripe. Guess it did not happen until today.

Good in securities investments

But Keck Seng is good in securities investments. See how much they generated from their investment in Parkway shares for a profit of RM260 million just a few years back. How many company can do that? Did any shareholder give the management a good pat for it?

Is the management of Keck Seng "kiam siap?"

(Stingy in Chinese Hokkien dialect)

Since the first year I invested in this company, I have never fail to receive an average of 10sen plus dividend per 1000 shares until today. Even after the post bonus of one for two, the dividend was still 10sen plus for every 1000 shares. Again, how many company has been able to maintain this kind of consistent dividend payment for more than a decade? Remember that there were also major crisis happening during that time. The ability to pay consistent dividends must be due to the cautious management to ensure the company remained profitable all the time. Yes, profitable all those years. I can't recall any single year that Keck Seng reported a loss since my first day of investing in it.

Share price rising several folds

Early birds "investors" would have been very pleased to see their investment in any company increasing several folds. The management must be doing something very right to be able to see the share price rising so massively by the chasing investors all these years. Ask yourself, how many company that you have invested in the last ten years and hold until today is able to generated this kind of returns for you?

Meantime, for those who bought the shares at its peak and near peak and now must be suffering some small or large paper loss  (depending on how much you bought), they can only hope for the best. Definitely I don think they have the strength to beat the drum anymore.

What about those who bought it around RM7 or below? (Mind you, my spouse still owned 1,500 shares bought more than a decade ago). I believe they are equally disappointed with the absence of that bumper dividend payout. But at least, they are still sitting on some paper gain.

So it looked like no bumper dividends after all as time is running out, but surely those late comers are experiencing a bumper shock to see the declining share price. Although Christmas is just days away, it looks like Santa Claus is not going to say "Ho Ho Ho" to the shareholders of Keck Seng afterall.

Could you let us know what are the stocks

you still holding?

That was this question from alwayswin111 who posted this on Dec 11, 2013.

There is also another popular question we all like to know. For example, if we know of a famous fund manager of a top performing unit trust fund, I am again 100% sure we all like to know what stocks he is buying and holding.

Again, if our "guru" Mr Tan Teng Boo is to tell you that of his personal holdings of stocks, that would also interest you.

Actually all stocks investors should be keeping some shares  (due to whatever reasons) from time to time. Maybe some would keep them for decades, some for few years, some for just some time, some would sell them for a small or big profit depending on situation and some would sell even at a loss when fear become too fearful for them.

Some were forced to become long term shareholders especially those who has bought Keck Seng at more than RM7. Another stock, Daiman Development Berhad must have attracted a big number of new long term investors recently. Regular readers would have read about it in The Edge Weekly, on Issue No. 990 dated Nov 25 - Dec 1 2013. There was this article titled: Daiman - A stock for your children. (Incidentally, I have been keeping shares of Daiman since 2004!).

Personally whatever stocks one holds (for how long that doesn't matter), it is actuallyt the  difference of the entry price and the current price right now. Any stock that shows a POSITIVE return is already a winner. And it is actually the good winners that we want to keep for as long as possible.

Some of my holdings are nearly ten years ago. A few of them are actually FREE because of the total amount of dividends received being more than the original capital sum invested. I only wish at that time, I had bought more instead of just 1000 or 2000 shares. (See, human is always very greedy). It is only during the last few years that I started to buy more quantities in one stock rather than just 1000 shares.

So dear alwayswin111,

From time to time, I will be sharing those stocks that I have been holding for the last ten years.  But I can tell you that most of my stocks are cash-rich companies that pay reasonable good dividends. But I also have a few (luckily few counters and in small quantities only) rotten shares. That I will also be sharing in my future blogs.

For those who have been reading my blog all this while, I say "thank you" to you very much. I really hope you find my blog entertaining and useful and fruitful when it comes to investing. I look forward to share with you more interesting articles in my future blogs in 2014.

Have a very wonderful Merry Christmas

and let us all cheer to a very Happy New Year 2014!