Ocean Sky was first featured on this blog 6 months back as an undervalued stock (refer to article). Apparently, I am not the only one who thinks that Ocean Sky is undervalued, Ezion (a hot stock considered by many local investor) announced that they are proposing to inject its marine supply base asset into Ocean Sky at cost via a share swap. Post exercise, Ezion will hold 45.15% in Ocean Sky while the latter will have a 2% stake in Ezion. This is a strategic move to enable Ezion to tap into the growth potential of the marine supply base business in Australia without stretching its balance sheet and resources further, while allowing the company to stay focused on its core liftboat and service rigs business.
Ezion will issue 20.2m new shares @ S$2.351 per share in exchange for 440m new shares in Ocean Sky @
S$0.108 per share. In addition, Ezion will have the right to subscribe for an additional 165m shares @ S$0.108, which would raise its stake in Ocean Sky to c.50%.
Upon conclusion of the deal, the existing Chief Operating Officer (COO) of Ezion – Captain Larry Glenn Johnson - will join Ocean Sky as Chief Executive Officer (CEO) to spearhead the marine supply
base business.
Read more details of the deal by downloading report here
Showing posts with label Ocean Sky. Show all posts
Showing posts with label Ocean Sky. Show all posts
Saturday, October 5, 2013
Tuesday, April 23, 2013
Finding Undervalued Singapore Stock: Ocean Sky
This is a stock that I came across while reading a stock report recommendation from OSK-DMG. The stock is called Ocean Sky. Ocean Sky International Limited and its subsidiaries is a one-stop fully integrated apparel service provider with global end-to-end supply chain management capabilities from design to distribution. The Company’s divisions include Corporate Services, Apparel Agency and Apparel Production Services divisions. The Company's subsidiaries include Ocean Sky Marketing (HK) Ltd, Suntex Pte Ltd, Bright Sky Pte Ltd, Suntex Investment Co. Ltd, Bloom Time Embroidery Pte Ltd and Ocean Star Apparel (Guangzhou) Pte Ltd.
Why is Ocean Sky undervalued?
The stock is currently trading below cash and offers a dividend yield of more than 11%. The company recently sold off its core apparel business together with two properties in Hong Kong which left the company flush with cash. OSK-DMG estimated the cash to be 30-
40% higher than the entire market cap of the company. With the huge amount of cash on hand, management will be expected to be dishing out some SGD0.016 of special dividend. Together with the final dividend of SGD0.008, this would mean that the yield on the company comes up to just over 11%. OSK-DMG estimates the intrinsic value of the stock to be about SGD0.29, which represents an upside of close to 40%.
Valuation of Ocean Sky
Below is the valuation done by OSK-DMG.
Risk of investing in Ocean Sky
In value investing, we are always focused on the risk of losing money; the downside. The risk of investing in Ocean Sky is that management might not be able to find a good business to reinvest the excess cash.
An update was posted on Ocean Sky in October 2013. Check out the update here
Disclaimer: This is not a buy or sell stock tip. Please do your own research.
Why is Ocean Sky undervalued?
The stock is currently trading below cash and offers a dividend yield of more than 11%. The company recently sold off its core apparel business together with two properties in Hong Kong which left the company flush with cash. OSK-DMG estimated the cash to be 30-
40% higher than the entire market cap of the company. With the huge amount of cash on hand, management will be expected to be dishing out some SGD0.016 of special dividend. Together with the final dividend of SGD0.008, this would mean that the yield on the company comes up to just over 11%. OSK-DMG estimates the intrinsic value of the stock to be about SGD0.29, which represents an upside of close to 40%.
Valuation of Ocean Sky
Below is the valuation done by OSK-DMG.
Risk of investing in Ocean Sky
In value investing, we are always focused on the risk of losing money; the downside. The risk of investing in Ocean Sky is that management might not be able to find a good business to reinvest the excess cash.
An update was posted on Ocean Sky in October 2013. Check out the update here
Disclaimer: This is not a buy or sell stock tip. Please do your own research.
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