Goodbye YSP Sah & Hello Imaspro

Goodbye YSP Sah

& Hello Imaspro

What a big difference the price of a stock can move in a space of few months! Just on Dec 31, 2014, one of my stocks, Y.S.P. Southeast Asia Holdings (YSP Sah) was just trading at RM1.30.

But after it announced an impressive record 1st Qtr results 2015 on May 15, YSP Sah went on to post a gain of 34 sen to close at RM1.95 in heavy trading volume the very next day.

I still remembered vividly that morning on May 16, I was having my favourite breakfast with my spouse at Tesco (Udini), I showed the trading price to her from my phone. And we were discussing whether to take profits or not. We were looking at each other and there was no answer from neither one. Neither one seem to say yes, time to take profit.

See, when you don't make a decision when it comes to investment, it is actually making a decision already, i.e. you have decided NOT to take profit at that moment.

I believed the surge in the share price is due to the 1st Qtr impressive earning. I also convinced myself at that time that YSP Sah, trading around the RM2 level, the market has already priced in and there might just be, perhaps a bit of further rally. Perhaps a further rise of 10 or 20 sen more.

Also, there was this lingering thought of selling YSP Sah at that moment and using the entire proceeds to buy Focus Lumber shares. Luckily I did not execute that call to my remiser or else ......

Well, always expect the unexpected in the stock market. YSP Sah continued its ascend into new uncharted territory from weeks to weeks, rising more than the few times of occasional pullbacks (due to profit taking).

Whether there will be further rally for YSP Sah remains to be seen. Comes  August when YSP Sah announces its 2nd Qtr results will be keenly followed. Another strong results might push the price higher again while a poorer results could see the price trending opposite the other way.

At some point during the journey of our investment, one must be brave enough to take profits when there is an opportunity. Of course, one must not have too much sentimental for stocks. There is always opportunity to buy back again in the future. It is a question of buying at a higher or lower price when the time comes.

My decision to sell YSP Sah after holding more than three years has been more purely on taking profits. The fundamental strength of YSP Sah remains strong in my view.

Interestingly, the proceeds allowed me the opportunity to increase my cash holdings to scout for other undervalued stocks. And one that has been catching my eyes since early this year is Imaspro Corporation Berhad.

At that time, while my focus was on Focus Lumber Berhad, I had also taken a strong interest in Imaspro. But Imaspro experienced a very strong rally from March. It rallied from RM1 plus to a high of RM1.90. The reason is believed to be the emergence of Yu Neh Huat (famous for his tussling over Hong Leong Capital) who acquired a substantial stake.

But a few months down the road to this few days, the excitement evaporated. Fuelled further by the recent market sell-off and Imaspro's share price retraced to between RM1.40 - RM1.50. (My entry price target for Imaspro is anything below RM1.50).

Hence, the opportunity now to buy into Imaspro. There are several good points about Imaspro which I am comfortable with. It is cash rich and has zero debts. It cash per share is around 50 sen. It has been paying a consistent dividend of RM35 for the past nine years.

Since 2006, Imaspro has always recorded quarterly profit without a single  loss. That is remarkable feat for a small company. Does it sound like the making of another mini-YSP Sah?

Such consistent earnings (although not spectacular) over the past years allowed Imaspro to slowly build up its cash coffers. Its cash is somewhere around RM40 million at the moment.

Imaspro's first nine months' total earnings per share (eps) is 11 sen which is just one sen behind its total eps of 12 sen for Financial Year 2014. The end financial year of Imaspro is on every June. So when Imaspro announces its 4th Qtr results somewhere in August, it's eps is most likely to exceed its 2014s.

Selling 10,000 shares of

YSP Sah at RM2.95 on July 16, 2015.

After deducting the broker, stamp duty, clearing fee's charge & GST, the proceeds of YSP Sah is RM29,273.00.  (RM29,500.00 - RM227.00). Deducting my original capital RM10,567.09 (invested on June 5, 2012) gives me a profit of RM18,705.91. Added in the total three dividends of RM1900 received the last three years gives yours truly a profit of RM20,605.91.

This is good return of 195% for holding on to a period of three years and one month.

Buying 5,000 shares of Imaspro

at RM1.46 on July 16, 2015.

My target entry price to purchase Imaspro at anything below RM1.50 was triggered on July 16. Yours truly was delighted when there were Buying bids of RM1.45 vs Selling bids of RM1.46.

I did not want to wait anymore. I told my remiser to just buy at RM1.46. Should there will be further price weakness after my purchase, I would be most happy to buy more again. Until then, let us wait and see.

Oh, I almost forget again. Anyone dares to join me this time? I would understand if nobody dares (after the so-so performance of Focus Lumber). But you must understand that investment needs time to see the seed of your fruit grows.

And I am not talking about months. I am talking about few years down the road. If you don't believe, then you can refer back again to when I planted that YSP Sah seeds. 

Only time will tell if my decisions to bet on Focus Lumber and Imaspro are right or not.

Correction

I mentioned that I had 36,000 shares of Focus Lumber Berhad in my blog on June 19, 2015 : titled : What is wrong with Focus Lumber?

My apology to you dear readers in case you are confused because it should read as 31,000 shares and not 36,000 shares.