Sixty-six dollar and fifty cents profit on C&O Pharma

As some of you may know, Shinogi has managed to acquire at least 90% of all ordinary shares in C&O. It will now acquire the remaining shares that have not been tender at the offer price.

I did a quick calculation and my cost of purchasing 9,000 C&O shares was $4,501, $67.50 dividends in between, while the offer will give me $4,500.

This means that during the same period I have been holding on to the shares, the STI lost about 15%, I made a 1.5% gain!

A 1.5% gain is nothing much, considering that there are opportunity costs that I did not factor in. Also, I am a bit sad to have to lose a drug-maker in my portfolio. Nonetheless, C&O's share price had been languishing for a very long time, and Shinogi looks like a white knight on hindsight.

I will have to email the company to find out when my shares will be acquired and when the money will be in the bank. Hunting season begins when I sort that out.

C&O Pharma Trading Halt

Did not realise that C&O issued a trading halt announcement. Based on the volume of shares trading up in recent weeks, I can only gather that the following may take place.

1. Privatisation. Sumitomo is trying to acquire as many shares as it can in the open market before taking the drug manufacturer public.

2. Share placement or rights issue. The share price is being ramped up so that C&O can raise enough money in the market without selling too many shares. However, this is a sell signal to me as it means that C&O is not a cash generating machine that I think it is.

We will know when Monday comes. Generally, when a company issues announcements over the weekend, it cannot mean good things. Fingers crossed.

I am not a value investor

If anybody asks, I am not a value investor. Although I tend to look for stocks with low liquidity, my record shows that I tend to put my money on growth or cyclical stocks. Of course, as long as the market is battered enough, any stock will be undervalued. But my purchase of C&O Pharma sometime ago, shows that I get easily excited by the sight of growth stocks.

What about Auric Pacific? Is not it a value stock, considering that it is trading at a steep discount to its book value and has a huge stash of cash? While the traits may point towards Auric Pacific being a value stock, the catalyst for my purchase, was the company going into real estate. If its core operations return to good health, particularly its Delifrance outlets, upside will still be limited. It was only when it made concrete steps towards establishing a real estate fund, that I took action.

Food for thought: if you find a stock that looks remotely undervalued, but buy it for growth prospects, are you still a value investor? My preliminary thoughts are that the dichotomy between growth and value is very blur, intention/rationale is more important that aesthetics of the stock.

Updates On GMG Global and C&O Pharma

GMG Global recently announced that it would acquire slightly more that a majority stake in Thai rubber producer Teck Bee Hang for a nominal fee of USD 909. However, GMG Global will make out significant loans to Teck Bee Hang amounting to at least SGD62 million for the purpose of working capital as well as to finance outstanding debt. GMG Global says the move fits its expansion strategy and intends to turnaround the Thai rubber producer by 2011.

Meanwhile, C&O Pharma Tech announced that Japanese conglomerate Sumitomo Corp will acquire a 29% from Executive Chairman Gao Bin for $96 million. This is about 50 cents per share and will make the Japanese conglomerate the second largest shareholder after the company's Executive Chairman himself. The announcement was made after the company was halted from trading for two days since Tuesday.

SGX Stockpicker Says...

C and O : Trading Halt. WTH!?

I think this is a bit too much for me. First it was GMG Global that declared a trading halt on a Monday morning. Now is it C&O Pharma turn to announce a trading halt in the evening. The company says it will make an announcement on Tuesday morning.

Given the lack of price-volume action but a substantial paring in stake in recent months by a Lee Chong Min who linked to a PE firm, I can only think of three possibilities what will happen tomorrow:

1. C&O is affected by some new regulation or price cuts.
2. Insignificant acquisition of a smaller company (Most likely)
3. Placement of shares.

Good luck to all those vested.

Edit

Removed profit warning.

Bought C and O

I bought 4 lots of C&O Pharma at $0.48. Could not make up my mind what other stocks to buy when the market fell badly on Wednesday.

C&O Pharmaceutical: 1QFY11 Results Review

While doing research on Sinotel, I chance upon an old post by MusicWhiz on C&O Pharma (link). I f I had read his bit first, I would probably not buy the stock at all. But since I suffer from confirmation bias, I will do a review of C&O Pharmaceutical's recently released first quarter results, for their financial year ending 30 June 2011. Take note that I bought 5 lots at $0.505 a few months back and its current price is $0.475 (slight ouch).

Bought C&O Pharm

Due to access problems in the office, I had to key the order well before the market opened. Got 5 lots of C&O Pharm at $0.505 each.

Rationale: Although it is not cheap in terms of valuations (12 times trailing earnings but 3 times book), the company has been steady in terms of revenue growth as well as dividend payout. my theory is that there is a possibility it will turnout to be a Sihuan Pharm - overlooked and will eventually de-list at a premium (fingers crossed).

Sidenote, I decided on the stock after only some research, which included just reading the income statement and prospects. C&O will not be included for the upcoming review.

FYI: I can be reached via email namely sgxstockpicker@gmail.com