David Webb

[winston]

Instant profit for Christmas stock king
BenjaminScent

Shareholder-rights advocate David Webb yesterday named electronics manufacturer Alco Holdings (0328) as his annual Christmas stock pick, sending the small-cap firm's shares rocketing 23 percent and racking up at least HK$7.83 million in paper profits for Webb.

Shares of Alco, which makes DVD players, flat-panel televisions and audio systems, jumped the most in five years to close at HK$1.49, up 28 HK cents.

Webb first disclosed his interest in the stock on July 17, when his shareholding increased to 5.01 percent, or 27.97 million shares.

Webb also gave an "honorable mention" to two other small-cap stocks: Fujikon Industrial Holdings (0927), which was his Christmas 2005 pick, and optical frames maker Sun Hing Vision Group (0125).

Fujikon surged 11.8 percent yesterday, earning Webb one-day paper gains of HK$3.36 million, while Sun Hing Vision surged 14.4 percent and gave him one-day paper gains of HK$2.37 million.

Webb usually holds onto his Christmas picks long-term, so he is unlikely to take profits yet.

For several of his stock picks, including last year's choice of speaker maker Shinhint Acoustic Link Holdings (2728), Webb increased his shareholding further in the months after his pick was unveiled.

Webb warned people not rush to buy his Christmas pick, saying it is intended for a one-year - not one-day - investment horizon.

[winston]

From Dr. Check, The Standard HK

Independent stock commentator and investor David Webb has made a reputation picking one undervalued small-cap stock each year as his Christmas gift.

Since 1999, his picks outperformed the Hang Seng Index the following year. These have included Kingmaker (1170), Tungtex (0518), Arts Optical (1120), Karrie (1050) and Fujikon (0927). Last year it was Alco (0328).

After the subprime crisis, many investors began to query whether they should still use traditional methods to select undervalued growth stocks based on their price- earnings ratio, price-to- book ratio, dividend yield and the company's cash position.

Webb's 2003 pick, Allan International (0684) - a household electrical appliance maker - offers some clues. The stock was trading around HK$1.70 the day after the recommendation.

Since then it has underperformed and kept falling for two years despite the HSI surging.

At the end of 2008, Allan International dropped to as low as 53 HK cents.

This month, however, it finally reflected its true value and at one point climbed to a 10-year high of HK$2 after the firm's net profit for the financial year ended in March soared 64 percent to HK$106 million.

Allan International closed at HK$1.54 yesterday, 4.8 times its historical PE and with a dividend yield of 9 percent. It still appears cheap.

[winston]

Not vested. From Dr. Check, The Standard HK

For his "Christmas gifts" in 2006 and 2007, Webb chose Sino Golf (0361) and Shinhint (2728), respectively. Although they have not performed well, will Webb eventually be proven right again?

Sino Golf manufactures golf equipment and accessories. Those who followed Webb probably bought the stock at HK$1.19. Sino Golf closed at 39 HK cents yesterday.

The financial crisis has affected the golf business. As a result, the firm's net profit last year dived 68 percent to HK$13 million.

Sino Golf sells most of its products in the United States and Japan. The North American market contributes approximately 67.7 percent of the company's turnover. This is Dr Check's biggest worry because of the state of the US economy.

Golf is gaining popularity in Asia, but it will take time for Sino Golf to recover.

Even though its shares are trading at 8.6 times its price-earnings ratio and with a 3.9 percent dividend yield, I wouldn't recommend them.

[winston]

From Dr. Check, The Standard HK:-

Music to investors' ears

In the last two days, I focused on stock commentator David Webb's Christmas picks.

Since 1999 his choices have outperformed the Hang Seng Index except for Sino Golf (0361), which I discussed yesterday, and Shinhint Acoustic Link Holdings (2728).

Webb recommended Shinhint in December 2007 when the stock was trading around HK$1.18. It closed at 63 HK cents yesterday.

Shinhint sells communication, multi-media, entertainment and audio products. Its net profit rose steadily from HK$40 million in 2004 to HK$57 million in 2007, but fell last year to HK$31 million because of the global financial crisis.

Shinhint's top multi-media products include portable speakers equipped with amplifiers used in portable personal multi-media players, MP3 speaker systems and speaker systems for US third- generation smartphones.

In the entertainment sector it offers MP3 devices, gaming consoles and desktop computers among other items. Shinhint's products in the communication segment include audio accessories for mobile handsets and telephony, bluetooth wireless headsets and wireless headset devices for motorists.

The management has correctly forecast consumption trends and quickly delivered products to the market, enabling the firm to do well.

More innovative electro- acoustic peripheral products will be developed to take advantage of the popularity of 3G smartphones, LCD television and netbooks as well as the growing interest in outdoor activities.

Shinhint is trading at an historical price-earnings ratio of 6.6, with an 8.7 percent dividend yield and a 40 percent discount to net asset value. I would say its valuation is very attractive.

[winston]

Not vested. From Dr. Check, The Standard HK

Headphone maker sounds a good buy

In recent days this column has focused on stock commentator David Webb's Christmas picks, most of which have done well.

One of those stocks, Shinhint (2728) - which I discussed yesterday - closed the day 19 percent higher.
( What has changed in one day ? )

Today let's focus on another of Webb's selections, Fujikon (0927) which makes electro-acoustic products.

For the fiscal year ended March, the group maintained a gross margin above 20 percent.

Net profit fell by 34 percent to HK$91.3 million. The audio products segment accounted for 30.8 percent of total revenue with sales of HK$389.7 million.

Communication products and multimedia products accounted for 21.5 percent and 15.4 percent of total revenue, respectively.

Fujikon is focusing on the high-end wireless headphone market by using in its products the latest technology including infrared, Bluetooth, and 2.4GHz digital audio capability.

In a bid to corner a niche market, the group aims to develop armature headphones.

Dr Check believes Fujikon can keep adjusting its product mix to cope with the changing multimedia environment.

Fujikon's shares closed yesterday at HK$1.64, or an historical price- earnings ratio of 7.1.

Its dividend yield of 9.1 percent is attractive.

The firm has no long-term debt and its share price is trading at a 10percent discount to its net asset value. Fujikon's valuation still looks attractive and should be included in a long-term buy list.

[winston]

David made $245m picking stocks - now he wants to give away his advantage

By Sam Mamudi, Benjamin Robertson & Kana Nishizawa

After earning about 20 per cent a year from his personal investments in Hong Kong shares since 1995 – more than double the gains in the city's benchmark index - he seems happy to have amassed a fortune of at least $US170 million ($245 million).

Here's how Webb describes the basics of his investment strategy:
1. Owns about 35 stocks at a time, with an average holding period of "five-plus'' years
2. Long only, never short
3. Prefers large stakes in small companies and isn't afraid to take an activist role: "If you are going to be a minority shareholder, it's better to be a big one''
4. Doesn't use leverage
5. Looks for businesses that are well-governed and undervalued
6. Reads the regulatory filings –- almost all of them
7. Avoids large caps
8. Refuses to manage outside money: "It's a lot of hassle''

Source: SMH

https://www.smh.com.au/business/markets ... 50pc4.html