BULLSEYE88 replied the topic: FALCON ENERGY - P/E :2.9 . TRADE AT 0.31x BV OF 47.86c
ShareInvestor, a financial media and technology company and subsidiary of Singapore Press Holdings, holds the annual event to enhance investors' education and raise the level of financial literacy.
Mr Lim, 34, won Invest Idol, a new feature of Invest Fair 2015, which ShareInvestor has been running since 2007 for retail investors and traders.
Participants had to submit a theoretical portfolio comprising at least two stocks and up to eight, not exceeding $50,000 in total value.
Only Singapore-listed stocks could be selected, while warrants, exchange-traded funds and indices were excluded. Submissions closed in mid-July.
The target returns of the portfolio would be a minimum projected gain of 8 per cent per year, based on the initial capital of $50,000, excluding trading commissions and fees. Short-selling was not permitted.
THE WINNER TOP STOCK PICKS :
Mr Lim' s stocks were construction firm Lum Chang (100,000 shares at 38.5 cents each, or $38,500) and Falcon Energy Group (50,000 shares at 22.5 cents each, or $11,250) for a total investment sum of $49,750. He allocated 77 per cent of his portfolio to Lum Chang and a smaller proportion to Falcon because the oil and gas sector is deemed riskier now.
Mr Lim told The Sunday Times he picked small-caps that were relatively cheap so a small price change would translate to higher percentage gains, and companies with sound fundamentals as reflected in the low price-earnings (PE) ratios, sustainable dividend policies and discounts to net asset value (NAV).
As for Falcon Energy, Mr Lim was a shareholder of CH Offshore, in which Falcon has an 86 per cent stake. At the buy-in share price of 22.5 cents, he was getting the counter at a 47.6 per cent discount to the NAV of 43 cents.
The earnings per share was 3.81 cents (excluding CH Offshore), the PE ratio was 5.832 and the dividend yield was 6.6 per cent. He projected a target price of 30 cents, which would translate to a potential 33 per cent upside.
" One key consideration was that Falcon' s market cap was $182 million versus CH Offshore' s market cap of $348 million. So I am paying $182 million for something that includes a $348 million subsidiary," he said.
Mr Lim' s research showed that the potential catalysts included the majority ownership stake in CH Offshore, which has zero borrowings and had been cash-flow positive for the past decade.
The strengthening United States dollar, the firm' s steady dividend policy of 1.5 cents a year for the past two years and its share buybacks early this year were also seen as positives.