It's with the benefit of hindsight that we can say why ride up and down a stock.... At the point of its soaring climb, it's a question of is the stock undervalued or no? Unfortunately, that is only 1 factor in determining the stock price, altho it is a very imprtant factor. The market has its moods, and has its manipulators, so a stock can crash just as fast as it rises, or it can do nothing because of under-promotion or because of illiquidity.
As for Saizen, looks like it was no bad news behind its trading halt - just a cautious move by the reit manager in order to clarify lots of inaccuracies in BT report. Saizen shld make an upward move tomorrow, IMHO.....
Market will not forgive those who fell in love with their counter and blinded by their own ego. This is not value investment, this is stupidity and foolish. Yes, it will come back, but just ask yourself honestly, when? 6months? how long? This nuclear accident is no financial crises where Ben can always inject money into the system and CB can intervene. If you will to check, it take average 2 to 3years if not serious, and if it is serious, contamination, it will take years. The whole city will not be habitable. Do you think people want to rent Saizen just outside highly contaminated with radiation Sendai? Even if it is not serious, the damage is still done. If it is serious, this stock got lot more to go down. Nobody in their right sense of mind would want to stay near a place with high radiation.
Not long ago, there was one David Yee, he posted abt Saizen wisely, at that point of time, he was right, but that is not now. As value invester you should sell when fundamental of a counter have changed.And to said that major invester have bought the counter recently is self comforting, how many have they bought? very little. I believe they are doing a little buying to suport their vested counter.
Prephap David Yee who is reading my post can make some comment. I thank you (David) in advance. Cause, I am a former Saizen invester only just days ago. I have sold all. Thank all and David in advance.
Hi cheongwee,
Following is my own personal view and should not be taken as advice. My thought is that the market has over-reacted to the japan earthquake and nuclear crisis for Saizen.
Few factors for your consideration;
1. Insider continue to buy both for 2 days despite knowing about the earthquake and nuclear crisis.
15th March - 1,942,000
14th March - 1,400,000
2. Most property affected are in Sendai, meanwhile note the comment that 11 is from YK Shintoku. As at the date hereof, Saizen REIT has 22 properties, 3 properties and 3 properties respectively in Sendai, Koriyama and Morioka. The valuations as at 30 June 2010 of these properties are JPY 4.26 billion (S$65.38 million), JPY 1.09 billion (S$16.73 million) and JPY 0.53 billion (S$8.12 million) respectively. Amount total to $90.90 which is roughly 15.5% of its asset.
It should be noted that 11 out these 22 properties (with annual rental income of approximately JPY 152.8 million (S$2.4 million)) belong to the YK Shintoku portfolio. Revenues from YK Shintoku’s properties currently do not contribute to distributions.
3. Risk relating to nuclear power plant None of Saizen REIT’s properties are within the current evacuation zone surrounding the nuclear power plant at risk in Fukushima. This will create demand for housing and increase rental in the short term as many houses has been destroyed.
4. Value for Saizen NTA Saizen was at $0.38. Assuming that all the 22 properties was totally destroyed which we know it is NOT as it only suffer minor damage. $0.38 - 15.5% = $0.32. This compare to the current market price of $0.13. It give us close to 60% discount to NTA which i think is an attractive long term buy. However take note that this we assume that all 22 properties has been destroyed.Short term wise it is likely to be drag down by uncertainty but longer term value wise, i think it is still a long term buy.
Hi cheongwee,
I went into the market to buy Saizen Warrant which expired in 2012 June. Exercise price is $0.09. Hope should be enough time for the market to realise how undervalue this counter is.
Regards
David Yee
Hi David
I would like to thank you for your generousity in sharing with us your view. I know that thing will get better in the long run, but Saizen will definitely have to suffer over the next few quaters for sure.
As to your view of ppl over reacting to this nuclear leak is a little off beat. Radiation take a long time to recover. Even till this day, there are still ppl suffering from nuclear radiation related death in Hiroshima and Nagasaki, some 60 over years ago!!! And back to Fukushima, they are still battleling it out, show this event is not small matter.
I make little for Saizen sold at 15.5c and becos many counter have since been radiated and shaken more or less to the core by the earthquake to more decent value, there are many for me to choose from. I am still of the view mkt got more to go down in the days ahead.
Honestly, since nobody know how serious this thing is going to turn out and for how long, the best decision for me in such situation of not sure is to sell out and stay out.
But as again 15% is not serious, but why stay here to wait it out, when there are so many delicious counter out there for us to cherry pick.
I admire your investment decision to buy it warrant for capital gain.
I wish the sun will once again rise on Japan and Saizen. Thanks again for sharing
cheongwee
David you are in good company. Starich bought 1 m warrants yesterday, as announced this evening.
To Cheongwee, diff investors have different risk appetites and diff time horizons. At the end of the day, none of us can be 100% certain of our investment outcome since there are many events that will unfold that can surprise us on the positive upside or negative, and the sequence can be pretty haphazard.
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