I have decided to divest my position in Valuetronics as my initial investment thesis of a turnaround made in April (here) has been realized.
|All divestments made in 2017 by Author, price includes transaction costs|
As the table shows, the divestment of Valuetronics represent my largest realized gain till date.
1) Turnaround is Complete
The key investment rationale was that Valuetronics’ twin engines of Consumer Electronics (CE) and Industrial and Commercial Electronics (ICE) were finally both firing concurrently. This had indeed played out perfectly with the firm recording between 7%-10% q-o-q growth in revenue for both segments in the 2 quarterly results since my investment.
However, every party must come to an end and the latest Q2’18 results indicate that momentum for Valuetronics’ ICE segment might be stuttering. Revenue from the ICE segment fell q-o-q for the first time since Q4’16.
|Source: Valuetronics’ Financial Statements|