Independent Research, Turtles all the way down

Turtles all the way down

Independent Research

Writing short articles about mis-priced boring stocks around the world.

Equity Bottom-Up

<ul>
<li>I think most (value) investors go through four stages: Stage 0: Buy stuff that goes up. Especially when a lot of people around you get rich from doing it.</li>
<li>Stage 1: Invest in the future! Buy into some fancy exciting new technology that will become big some day! The Cathie Wood stage. Usually stage 1 and stage 0 go hand in hand.</li>
<li>Stage 2: Buy at low PE multiples. Some are smart and skip the first two. This stage is not bad, it should lead to slight outperformance. Can be dangerous without wide diversification as a lot of them are value traps.</li>
</ul>


I think most (value) investors go through four stages: Stage 0: Buy stuff that goes up. Especially when a lot of people around you get rich from doing it.
Stage 1: Invest in the future! Buy into some fancy exciting new technology that will become big some day! The Cathie Wood stage. Usually stage 1 and stage 0 go hand in hand.
Stage 2: Buy at low PE multiples. Some are smart and skip the first two. This stage is not bad, it should lead to slight outperformance. Can be dangerous without wide diversification as a lot of them are value traps.


Portfolio Analyst, River Capital Growth Fund, River Capital

Vishal Hargovan

Portfolio Analyst, River Capital Growth Fund

River Capital

<p>Luks Group is a long forgotten small cap currently available at a significant discount to estimates of intrinsic value. Broker coverage of this company last ceased in 2008 after the financial crisis took hold. However, given that this name is ignored by both the sell side and buy side, Luks now trades at close to 50% of its Book Value and just at 5.6X EV / FCF (2013). This presents an attractive opportunity especially as the Vietnam economy recovers. With cash of HK$304mn and a declining debt position of only HK$68mn, net cash of HK$236 makes up 20% of Luks’ market cap (HK$1213mn). Investment Properties in Hong Kong, China and Vietnam underpin the remaining NAV.</p>

Luks Group is a long forgotten small cap currently available at a significant discount to estimates of intrinsic value. Broker coverage of this company last ceased in 2008 after the financial crisis took hold. However, given that this name is ignored by both the sell side and buy side, Luks now trades at close to 50% of its Book Value and just at 5.6X EV / FCF (2013). This presents an attractive opportunity especially as the Vietnam economy recovers. With cash of HK$304mn and a declining debt position of only HK$68mn, net cash of HK$236 makes up 20% of Luks’ market cap (HK$1213mn). Investment Properties in Hong Kong, China and Vietnam underpin the remaining NAV.

Luks Group (0366 HK) available at half price into an improving Vietnamese economy

Hong Kong

Luks Group (Vietnam Holdings) Company Limited, through its subsidiaries, manufactures and sells cement, health care products, electronic products, plywood and other wood products. The Company also invests in properties.

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Luks Group Vietnam (366 HK)

Investing in HK Stocks

If you invest in Western markets this would be enough, but not in Asian markets where the trust factor is a lot lower, and where ownership is more...

Turtles all the way down

Luks Group (0366 HK) available at half price into an improving Vietnamese economy

Luks Group is a long forgotten small cap currently available at a significant discount to estimates of intrinsic value. Broker coverage of this...

Vishal Hargovan

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52-week Range

Market Cap (USDm)

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