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Mr. Lee Wan Tang, Chairman of Marco Polo Marine, purchased 1,000,000 shares at a price of 42c per share yesterday. This was disclosed in an announcement today.
Mr. Lee's direct and deemed interest in Marco Polo Marine increased to 59.52% (202,811,374 shares) with this latest purchase. He has, in slightly more than a year, since December 2011, increased his interest in the company by about 9,000,000 shares.
Conventional wisdom tells us that a high level of insider ownership suggests that the management's interests are aligned with shareholders'. When there is a meaningful increase in insider buying activity, shareholders should be more than just interested.
Insider buying at 42c a share could explain why those of us who have been waiting to collect at 41.5c or lower have not been able to get our orders filled. Technically, immediate resistance is at 43c, the last high.
Nobody wants to buy at resistance and this is probably why volume has reduced which suggests an overall picture of caution.
Insiders probably don't care much for technicals and using insider buying activities as a guide for short term share price performance is probably not a good idea. However, using the same in our longer term investment decisions could prove to be more fruitful and for those of us who bought some at 42c a piece, we could take comfort from knowing that Mr. Lee did so too.
Conservatively, I value Marco Polo Marine at 50.5c a share which is 8x PER based on the EPS of last year. They are likely to see higher earnings this year. So, keeping 8x PER as a guide to a fair valuation, 50.5c could turn out to be an understatement.
See announcement: here.
Related posts:
1. Marco Polo Marine: Indonesian Cabotage Law (Part 2).
2. Marco Polo Marine: Still cheap.
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30 comments:
Hi AK71,
I am one of those who got it at 0.42. But compared to Lee Wang Tang's shares (mockingly sounds like the noodle soup), I am just a micro cell. :/
Hi INVS 2.0,
Long time no hear. :)
A very rich noodle soup! ;)
Hello AK & friends,
Hmmmm.... healthy meal! Hope to eat more ..... cheaper meal soon!
Enjoy all!
ya no wonder my order at 42 never filled today. cos big boss taken all the scrips.
must try again tmrw!!
Hi JJ,
A retracement to support is looking less likely with each passing day. In fact, the rising 20d MA (which is the short term support) has almost caught up with share price.
Of course, there is still a chance of a retracement to test the 50d MA for support and this approximates 39.5c in the next session. If that should happen, I would be buying aggressively. ;)
Hi seefei,
I didn't bother to queue at 42c today. I simply bought some at 42.5c.
I figured that the difference is only $100 for 20 lots anyway.
Bought some since it is still cheap fundamentally and just in case it flies away tomorrow. ;p
I everyday trying my luck q at 41 cent.
But not able to get. Hahah
Hi yeh,
No harm trying. Haha.. ;)
AK71,
Please leave some for me if it falls to 0.395.
Leave some for me to nibble
Hi Jimmy,
I would also be nibbling but a bit more aggressively. ;p
"Conventional wisdom tells us that a high level of insider ownership suggests that the management's interests are aligned with shareholders'"
i dont know much about SGX as far as privatising a company is concerned...and general offers.
With that, i would have a concern with Mr Tan's holdings of 59% and rising....my suspicion is that he may be gather enough shares to privatise the company?
When that happens, its almost never in the minor shareholders interest.
What are SGX's rules about the % holdings before a mandatory general offer to other shareholders?
Hi JCK,
Crossing the 30% mark will automatically trigger a full take over offer but it would not apply in this case since Mr. Lee's stake has always been more than 30% since IPO.
If Mr. Lee's stake should one day cross 90%, then, he could privatise the company.
If we value the stock for 50cents or sixty cents, why bother whether it is now traded at 42cents or 42.5cents? Swallow it and wait for the fruitful results. This is what I did and I have to thank AK for his very good observation on this counter. Thanks a lot!
CS
Hi CS,
Although I am confident of Marco Polo Marine's prospects in the next few years, it is difficult to account for price movements in the shorter term.
So, I guess there is always a chance of a retracement and it would be nice to be able to buy at lower prices. No harm queueing for some a couple of bids lower. ;)
Of course, with any decision comes consequences and as long as we can live with these, we are OK.
Good luck to all of us. :)
Haha.
Today I start to Q at 42 cent.
But too late, still not able to get it.
Anyway I have mine at 40.5 cent.
Just wish to add more:)
Hi yeh,
Did you think that 40.5c was too high a price once upon a time? ;p
Anyway, you could still be right based on technicals alone. Based on fundamentals, I think 40.5c is inexpensive. :)
Market is soften, maybe can get at lower price
Hi yeh,
There is always a chance, of course. :)
Chairman raises stake to 59.52% at highest price in three years. With the 1m additional shares purchased at SGD0.42 yesterday, Mr. Lee now owns 202.8m shares of MPM or 59.52%.
The critical point is the purchase price – this is the highest that he has been willing to pay in the last three years.
Prior purchases were made between SGD0.33 and SGD0.35, with the exception being the SGD0.395 purchase around the IPO period of its Indonesian associate PT BBR.
Maintain conviction BUY, likely to double in 2-3 years. We value MPM at 9x FY13F EPS, yielding a TP of SGD0.61 which is 43.5% above yesterday’s close.
Looking further ahead, the earnings forecast of SGD30.3m translates into an EPS of 8.91¢, which at the same 9x multiple would yield a TP of SGD0.80.
The stock is currently trading at extremely attractive levels – 6.2x FY13F EPS and 1.0x P/B. Peers in the oil & gas industry are trading at 8x to 20x P/E.
At the very least, we expect the stock to revert to book value every year, which at 15% ROE implies at least a decent 15% return annually.
OSK Research, 21 Feb 13.
Hi AK71, sorry to hijack this post. Do you think you can share about the new IPO (REIT) coming? Tanks
Hi Caleb,
I received more than 10 emails asking me about it. :)
WB is probably right in saying that we cannot get a good deal at IPOs. So, I am going to ignore it.
Drizzt did a detailed write up on it at Investment Moats. I don't think I can do better.
You might want to visit his blog since you are interested in the IPO. Good luck. :)
Today I am Qing at 43 cent
Haha
Hi yeh,
As long as you know you would be buying closer to or at resistance and are OK with the possibility of a short term pull back, I hope you get what you want. Good luck. :)
i have monitoring these few days,
new support seem forming at 42-43 cent :)
Hi yeh,
That sounds reassuring. Thanks for sharing this. :)
MPM had run up nicely today to 45cts. its seems like 42cts is a jolly good entry point for late comers and accumulators.
i like the steady pace of increase instead of breakout and breakdown cycle common with other offshore and marine counters like sembawang marine which gapped down last week.
MPM is sure better for the heart, if not the pocket :)
Hi seefei,
MPM could form a step like chart pattern over time if it should continue doing corrections using time as its share price climbs higher. :)
On ASL Marine:
We roll forward our valuation to blended FY13/14F earnings, still based on an unchanged PER of 10x. As such, our fair value estimate rises from S$0.82 to S$0.86. Maintain BUY.
OCBC Research, 7 Feb 2013.
Interesting.
10x PER would value Marco Polo Marine at 62.5c per share based on last FY's EPS. Based on 2013 estimated EPS, 10x PER would translate to 70c per share.
Mr Lee does it again...
Hi letissier07,
Indeed, 500 lots bought at 43c just yesterday. :)
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