So one of the short cuts I take when searching for stocks to purchase would be to scour the net (forums, magazines, bank investment articles and such) for some ideas. Two ways to work on this: one is to research on the recommendations, the second method is to avoid those recommendations as you would assume that all attention is being placed heavily on it and it is probably fully valued or the BBs are creating a hype to unload it to retailers. (comfort anyone?)
I saw a mention of Pan Hong Holdings some weeks back, being an undervalued counter (way below nav I think -50%?) and it pays out pretty high dividends of >5% I started to look into it. Normally I am skeptical of anything related to china , especially if these related to properties in less than ideal 3rd tiered cities. However the valuations and figures are so compelling, assuming it was slightly overvalued, there is still much meat left. I took the plunge with a small position and it all turned out well shortly after with the company announcing a div in specie to unlock shareholder value by distributing shares of Sino Harbour. Two weeks, 25% gain including div. Some hindsight as a lesson to myself:
1) always do enough groundwork- work caught up with me recently and I did minimal research which led to selling too soon (no confidence) and not averaging down (when it drop from 23c to 19c)
2) I forgot to look at float. At 74% (cant recall) privately held, PH is definitely something like FCL and Simlian where majority shareholder would feel the pain of a low share price. Its high dividend policy also suggest that like the aforementioned two companies, the "returns" are distributed via dividends. Simlian took themselves private due to the severe undervalue and in that year (2015?) they were slated to distribute around 10% yield. Why share the profit with a bunch of fools who doesn't not value your wonderful company? I would take myself private too. lol
3) always have a clear pre-buy list ready. You never know when you will be busy to the point where you are unable to make off the fly decisions. I missed out on Wilmar and CWT as I was unsure, but in end it was a clear free angbao by the BBs which many of my friend took advantage while I was out of the picture and was too late.
4) not keeping up with news. I didn't even realized NK shot some missiles till my colleagues told me.. oh man...
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