Global Special Situations & Strategy, SR Services Ltd

David Lepper

Global Special Situations & Strategy

SR Services Ltd

SR Services provides Strategic Knowledge and Solutions services for Family Offices and Corporate Business. 

We deliver this via advisory services, strategic planning, opportunity analysis/sourcing, as well as solution implementation. 

Whilst, we create intellectual discipline and operational leverage for your projects or daily activities, our ultimate objective is to empower whilst enhancing your decision making. 

Strategic Knowledge and Solutions

Thematic (Sector/Industry)

■ Our Q3 2018 screen (in July <a href="https://www.smartkarma.com/insights/screening-the-silk-road-small-mid-cap-names-to-avoid" target="_blank" data-smartkarma-citation="insights:22376">Screening the Silk Road: Small-Mid Cap Names To Avoid</a>) presented with 45 stocks: Since this list was issued, 31 stocks have posted an average share price decline of 16.5%, with this group posting an average stock rank deterioration almost 12 points. 12-stocks rose on average 9.5% and 2 remained unchanged. The market cap weighted average decline was 8.2%, compared to the MSCI Asia Pacific index of 9% over the same period. Of the 45 stocks, the stock which saw its share price decline the most was Pan Jit International from Taiwan, down 49%, whilst the stock which presented with the highest appreciation at 28.6% was Noritsu Koki from Japan.
■ Of the 42-stocks identified in Q4 2018’s list, 26 were contained in our Q3 2018 list, leaving 16 entrants. All have an average daily traded value of US$0.5m/day and derive from constituents within Australia, New Zealand, Korea, Japan, Hong Kong, Taiwan, Singapore and India markets. Our market cap criteria greater than US$250m and less than US$10bn.
■ Japan, Korea Taiwan and Hong Kong are the countries with the most representation, with New Zealand offering one name and Singapore absent of candidates for this quarter. The Altman Z ratio has declined to 1.16 in Q4 from 1.38 in Q3, suggesting a higher level of risk. This is consistent with our value trap classification increasing its representation to 5-stocks in Q4 2018 from 1 in Q3 2018. 
■ Our screen looks for high valuation multiples presented by candidates, with significant earnings growth forecasts, as well as financial indicators suggesting balance sheet distress. 
■ The risks to this screen: The Financial and Utility sectors are not covered in this screen. Moreover, some stocks may appear on the screen, yet due to their business model being in the midst of repositioning they may also appear on some of our positive value or quality screens.
<h2>Our screening styles</h2>
For those that follow us, you will know our Stock Ranking system from our <a href="https://www.smartkarma.com/insights/notes-from-the-silk-road-setting-out-our-small-mid-cap-lemonade-stand" target="_blank" data-smartkarma-citation="insights:16803">Notes from the Silk Road: Setting Out Our Small-Mid Cap Lemonade Stand</a>.  For newcomers to our notes, it is merely a tool for identifying favourable and unfavourable stocks. In addition, to add more depth to our selection process we also monitor a series of “style categories” namely:  Growth, Value, Quality, Momentum, Deep Value, Income, and Underperformance. Within these style categories, we drill down further through a series of alpha momentum screens allowing us to differentiate and identify stock picks.

■ Our Q3 2018 screen (in July Screening the Silk Road: Small-Mid Cap Names To Avoid) presented with 45 stocks: Since this list was issued, 31 stocks have posted an average share price decline of 16.5%, with this group posting an average stock rank deterioration almost 12 points. 12-stocks rose on average 9.5% and 2 remained unchanged. The market cap weighted average decline was 8.2%, compared to the MSCI Asia Pacific index of 9% over the same period. Of the 45 stocks, the stock which saw its share price decline the most was Pan Jit International from Taiwan, down 49%, whilst the stock which presented with the highest appreciation at 28.6% was Noritsu Koki from Japan.
■  Of the 42-stocks identified in Q4 2018’s list, 26 were contained in our Q3 2018 list, leaving 16 entrants. All have an average daily traded value of US$0.5m/day and derive from constituents within Australia, New Zealand, Korea, Japan, Hong Kong, Taiwan, Singapore and India markets. Our market cap criteria greater than US$250m and less than US$10bn.
■ Japan, Korea Taiwan and Hong Kong are the countries with the most representation, with New Zealand offering one name and Singapore absent of candidates for this quarter. The Altman Z ratio has declined to 1.16 in Q4 from 1.38 in Q3, suggesting a higher level of risk. This is consistent with our value trap classification increasing its representation to 5-stocks in Q4 2018 from 1 in Q3 2018. 
■ Our screen looks for high valuation multiples presented by candidates, with significant earnings growth forecasts, as well as financial indicators suggesting balance sheet distress. 
■ The risks to this screen: The Financial and Utility sectors are not covered in this screen. Moreover, some stocks may appear on the screen, yet due to their business model being in the midst of repositioning they may also appear on some of our positive value or quality screens.
Our screening styles
For those that follow us, you will know our Stock Ranking system from our Notes from the Silk Road: Setting Out Our Small-Mid Cap Lemonade Stand.  For newcomers to our notes, it is merely a tool for identifying favourable and unfavourable stocks. In addition, to add more depth to our selection process we also monitor a series of “style categories” namely:  Growth, Value, Quality, Momentum, Deep Value, Income, and Underperformance. Within these style categories, we drill down further through a series of alpha momentum screens allowing us to differentiate and identify stock picks.

Screening the Silkroad: Small-Mid Cap - High-Risk Names To Avoid Q4 2018

Taiwan

Unitech Printed Circuit Board Corp. manufactures and markets multi-layered and double-sided printed circuit boards.

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Unitech Printed Circuit (2367 TT)

Screening the Silkroad: Small-Mid Cap - High-Risk Names To Avoid Q4 2018

■ Our Q3 2018 screen (in July Screening the Silk Road: Small-Mid Cap Names To Avoid) presented with 45 stocks: Since this list was issued, 31...

David Lepper

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