Trying to help out a fellow regarding his investment into this firm, Datapulse. From the books that I read, either this or Datacraft was one of the hotly punted stocks way back in the dot com era. I started browsing through the statements with a skeptical eye, knowing that Datapulse was dealing with those computer, gadgety stuff (they are actually providers of total solution to CD/DVD for content distributors in Asia Pac region). How good can they be. I think I'm wrong.
I only looked at their FY08 results released in 2008, Sept.
Net profit margins: 18.2%
ROE: 16.6%
Current assets/current liabilities: 4.0x
Total assets/Total equities: 1.25
Diluted EPS: 2.25 cents
PE (based on today's price of 0.135): 6x
Dividend yield : 14.8%
Here's my thoughts:
1. They must be doing something right. I thought the kind of business they are doing are so easily replicable and with not much of a competitive edge of others. But take a good look at their impressive net profit margins of 18.2%. This could be one off of course. ROE of 16.6% is pretty impressive too, especially for the kind of business they are doing. Usually for business geared towards manufacturing, I expect to see a rather lower ROE because of the high fixed cost perhaps coupled with high borrowings too. How wrong. Their ROE is hampered somewhat by the high cash/cash equivalents they are holding, but in these times, perhaps this is what prevents them from collapsing.
2. Looking at the current ratio and gearing, it's quite hard for me to see them needing any emergency cash to tide over current liquidity issues. Their current assets (of which 74.5% consists of cash/cash equivalents) can cover their current liabilities for 4 times. They have no problems with longer term debts too, with non-current liabilities consisting only of 24% of total liabilities. If they have no problems with short term liabilities, they wouldn't even have to blink for non-current liabilities.
In fact, their cash/cash equivalents of 45 mil can more than cover total liabilities of 20 mil PLUS dividend of 2 cents to every shares they own (around 11.9 mil) and still have 13.1 mil left over. Hey, do not belittle this penny share ok? Read more... Trying to help out a fellow regarding his investment into this firm, Datapulse. From the books that I read, either this or Datacraft was one of the hotly punted stocks way back in the dot com era. I started browsing through the statements with a skeptical eye, knowing that Datapulse was dealing with those computer, gadgety stuff (they are actually providers of total solution to CD/DVD for content distributors in Asia Pac region). How good can they be. I think I'm wrong.
I only looked at their FY08 results released in 2008, Sept.
Net profit margins: 18.2%
ROE: 16.6%
Current assets/current liabilities: 4.0x
Total assets/Total equities: 1.25
Diluted EPS: 2.25 cents
PE (based on today's price of 0.135): 6x
Dividend yield : 14.8%
Here's my thoughts:
1. They must be doing something right. I thought the kind of business they are doing are so easily replicable and with not much of a competitive edge of others. But take a good look at their impressive net profit margins of 18.2%. This could be one off of course. ROE of 16.6% is pretty impressive too, especially for the kind of business they are doing. Usually for business geared towards manufacturing, I expect to see a rather lower ROE because of the high fixed cost perhaps coupled with high borrowings too. How wrong. Their ROE is hampered somewhat by the high cash/cash equivalents they are holding, but in these times, perhaps this is what prevents them from collapsing.
2. Looking at the current ratio and gearing, it's quite hard for me to see them needing any emergency cash to tide over current liquidity issues. Their current assets (of which 74.5% consists of cash/cash equivalents) can cover their current liabilities for 4 times. They have no problems with longer term debts too, with non-current liabilities consisting only of 24% of total liabilities. If they have no problems with short term liabilities, they wouldn't even have to blink for non-current liabilities.
In fact, their cash/cash equivalents of 45 mil can more than cover total liabilities of 20 mil PLUS dividend of 2 cents to every shares they own (around 11.9 mil) and still have 13.1 mil left over. Hey, do not belittle this penny share ok? Read more...
