Posted on September 27, 2009 - by kevinscully

Changes to my stock pick / portfolio stocks….following a company visit yesterday

I visited AEI Corporation yesterday.  The meeting confirmed that the stock is clearly undervalued with its current market capitalisation almost totally backed by cash.  FY2009 half year profit of S$3.2mn means its back on the profit trail after a S$5.7mn loss in FY2008.  The latter from a write-off of one of its investments and also a marking to fair value of its aluminium stock to market.  Its not a strong growth play but you can expect annual organic growth of 10% per year until they do some acquisition.  The historic dividend yield of 1 cent is likely to be restored (they paid 0.75 cent in FY2008 when they made a loss) which gives a running yield of 7.7% at 13 cents.  The only problem is its small size and low liquidity.  But the current discount to NTA which is mainly cash is not reasonable.  For more on the reasons and my price target check my stock pick section.

Because I am adding AEI Corp, I am also removing ST Engineering from the stock-pick list today.

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2. Am tentatively adding China Animal Healthcare to my stock pick portfolio today
3. A review of entry levels for the ten stocks in my “stock pick” list…….as this correction continues