Kingsmen Creatives Ltd added to my portfolio.

With the share prices of many of my investments (including those I recently blogged about) having risen by quite a bit, I decided to nibble at Kingsmen Creatives Ltd, paying 59.5c a share, as its share price remained in the doldrums.

The weakness in Kingsmen's share price today reflects Mr. Market's pessimism. Despite being a leader in the industry, Kingsmen was not insulated from a marked slowing down in the high end retail industry which led to a much lower demand for their services.

Now, 60c seems like the immediate support for its share price. Will the support hold? Of course, I don't know.

However, here are a couple of things I do know which give me some comfort:

1. Company did share buy back in 2015 and 2016, paying 62c to 65c a share. Could they have thought that it was undervalued back then?

2. Dividend per share (DPS) of 3c which means a dividend yield of 5% for me. Although if earnings should weaken, things could change, a net cash position suggests that a DPS of 3c could be maintained.

Some readers might point out that with NAV per share at 54c, I am paying a premium of 11%. 

It might be surprising to hear me say this but it doesn't matter. It would be nice to buy lower than NAV but not a must. Why?

Kingsmen is a services company and not a REIT or property developer which are asset heavy. Apart from cash and its equivalents, Kingsmen's value largely lies in the intangible (i.e. services) they provide.

The softer economy will challenge Kingsmen to bring home the bacon. However, a good track record gives me some confidence that the business would do reasonably well and that, over time, I would have another good income generator in my portfolio.

Finally, I should say that although Mr. Market is pessimistic, I am not being optimistic nor contrarian. I am staying pragmatic and, so, mine is a relatively small investment for now.