by winston » Mon May 25, 2015 9:56 am
vested
Demystifying its value
Global Investments Limited (GIL) is a mutual fund company with an objective to invest in a diversified porfolio of assets except for direct investments in properes and commodities.
GIL recently released its 1QFY15 results, reporng a total comprehensive income of S$9.0mil, 91.3% higher than the same quarter last year.
Currently trading at huge discount to actual NAV. Using GIL’s last price of S$0.149, GIL’s shares are currently trading at a huge discount of 30.0% to its latest Net Asset Value (NAV) of S$0.213.
We estimate the carrying value of quoted securities and cash under GIL to be S$209m (Figure 6), greater than the current market capitaliza2on of S$207m.
On a per share basis (using the enlarged capital base a9er accoun2ng for scrip dividends), the value of the quoted securities and cash on GIL’s balance sheet works out to be S$0.150 (slightly above its current price).
This implies that the market is pricing the company’s non-quoted investments at zero, which we believe is unjustified.
We estimate that GIL’s share price could lie in the range of S$0.171 to S$0.203 (Figure 6), assuming a 50% to 0% discount in the carrying amount of its non-quoted investments. This suggests a potential upside of 14.9% to 36.4% after netting off GIL’s liabilities.
NAV only half of the story. While NAV is used to measure a mutual fund’s performance, it cannot be viewed in isolation as we have to also consider the fund’s total return, which comprises of NAV growth and its dividends distributions. For instance, despite the slight decline in the reported NAV per share from S$0.215 in 1QFY14 to S$0.213 in 1QFY15, investors were rewarded with a total dividends of S$0.015 per share for FY14.
This translates to an estimated total return of 5.9%. From a share price’s perspective, total return for the same period was 12.2% (1QFY14 share price: S$0.139, 1QFY15 share price: S$0.141).
Attractive dividend yield of 10.1% on top of potential capital appreciation. Current dividend yield remains very attractive at 10.1%, with total dividends declared (S$0.015) constant for the last four years (Figure 10). The company has also issued an interim dividend guidance following the release of its 1QFY15 results, proposing an interim dividend of 0.75 Singapore cents for FY15. This translates to an interim dividend yield of 5.0% based on GIL’s last price. We expect total dividends for FY15 to be maintained at S$0.015.
Source: KGI
It's all about "how much you made when you were right" & "how little you lost when you were wrong"