WHEN COMPANIES buy back shares in interesting quantities, that could signal that the stocks are undervalued.

BohTuangPoh3.16aBoh Tuang Poh, executive chairman of AsiaTravel.com, at a recent EGM. NextInsight file photo.Among those are Courts Asia, GSH Corporation and Centurion Corporation which, though being small-caps, have bought more than $1 million's worth of shares in the past three months.

Asiatravel.com is also an interesting case, though its purchases totalled less than $1 million. Last month (June) was the first time in four years that the online travel company has bought back its shares.  

One striking thing all four companies have in common is their share prices are trading at close to rock bottom, or just off recent multi-year lows.

In other words, they have been neglected by the market -- and that's largely because of their less-than-inspiring business performance.  The question then is, have their stock prices overshot on the downside? And will the stock re-rate anytime soon?

                                     $ spent on share buyback  
Year 2016 June May April Mar Total ($)
Courts Asia 1,082,385 50,432 99,360 518,256  1,750,433
GSH Corp 442,038 1,093,691 -- --  1,535,729
Asiatravel.com 646,334 -- -- --  646,334
Centurion 229,602 2,577,736 -- 935,668  3,743,006
Source: SGX          

 

  Courts GSH Asiatravel.com Centurion
Recent stock price  39 cents 26 cents 17.4 cents 36 cents
52-week range 30.5 – 40.5 cents 19.8 – 33.0 cents 14.2 – 28.0 cents 32.5 – 50.5 cents
PE (ttm) 10.5 25.9 -- 7.98
Market cap $207.6 million $512.4 million $67.6 million $266.4 million
Dividend yield
(trailing)
3.27% 0.19% -- 5.56%
Source: Bloomberg        


Some notes: 

» Courts Asia is held up as a potential privatisation play by DBS Vickers. Businesswise, Courts has been facing a retail environment that everyone knows is struggling.

» GSH's executive chairman, Sam Goi, owns nearly 50% of the company and he too has been buying GSH shares in recent times.

» Asiatravel.com has received part of the promised S$100 million cash injection by Zhong Hong, a Chinese hospitality play. (See:   ). To appreciate how tough business is, consider that Asiatravel.com has been suffering losses for the past five years.


Westlite Mandai Facade 14.4Westlite Mandai: A 6,300-bed workers' dormitory 55% owned by Lian Beng Group and 45% owned by Centurion. NextInsight file photo » Centurion has a decent trailing dividend yield of 5.6% and rising revenue and profitability over the past three years. Puzzling why the market does not accord more respect to it?

RHB Research reckons that Centurion is facing headwinds from a growing supply of dormitory beds in Singapore, and a slowdown in demand for dormitories in Malaysia where its manufacturing sector has weakened.  


Share Prices

Counter NameLastChange
AEM Holdings3.6600.090
AusGroup0.023-0.001
Avi-Tech Electronics0.445-
Best World Int.1.360-
CEI0.855-
China Sunsine0.320-0.015
CNMC GoldMine0.320-0.015
CSE Global0.5100.030
Food Empire0.510-0.010
Golden Energy0.155-
GSS Energy0.061-0.002
ISDN Holdings0.2900.025
ISOTeam0.142-0.002
IX Biopharma0.2800.010
JB Foods0.595-
KSH Holdings0.330-0.015
Medtecs Intl1.0100.110
Moya Asia0.0720.013
Nordic Group0.210-
Oxley Holdings0.210-0.005
Procurri0.295-0.005
REX International0.181-0.001
Riverstone3.9900.230
Roxy-Pacific0.3250.005
Sing Holdings0.370-
SingMedical0.2600.005
Straco Corp.0.470-
Sunningdale Tech1.0400.030
Sunpower Group0.4600.015
The Trendlines0.1050.001
Tiong Seng0.160-
Uni-Asia Group0.470-0.020
Yangzijiang Shipbldg0.895-0.020

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